Onshore outsourcing is the process of hiring service providers within your country to handle one or more aspects of your business. Also known as domestic outsourcing, this business process often involves hiring outsourcing companies and outsourcing services to handle core business services.
Business process outsourcing (BPO) can include any of the following business tasks:
Business leadership and executives typically choose to engage in domestic outsourcing as a business process because it’s cost-effective, especially when the service being outsourced doesn’t require someone to work at it full-time. With a full-time employee in the United States, the company is responsible for taxes, benefits, and more—but outsourcing to the service eliminates that issue.
By having customer support from outsourcing companies, a business can provide support to customers around the clock, making sure time zone differences and working hours are not issues. Not only is this useful for phone support, but also SMS support (phone texts) as well as the always-available chat features on websites that customers have come to expect as part of quality customer service online. By participating in onshore outsourcing, the business can also hire outsourced individuals who do not have cultural differences with the customers—a common issue with offshore outsourcing (and sometimes also nearshore outsourcing).
In a business climate that includes serious customer frustration over outsourced customer service, customer support, and other business services conducted over the phone and in chat, onshore outsourcing can assuage customer concerns and lessen cultural differences.
In today’s business world, startup CEOs, small business executives, and entrepreneurs who decided to strike out on their own in the wake of the COVID-19 pandemic have come to rely on outsourcing services to grow their businesses.
While a business can find an individual service provider on LinkedIn or on platforms specifically created for the purposes of finding providers, the business process of finding the best service provider will go more smoothly if the business owner considers outsourcing companies. Much like temp agencies, outsourcing companies will provide the ideal candidate for the job, based on working hours, labor costs, domestic location, and more.
Let’s take a look at outsourcing in more detail so you can decide which TDS Global Solutions type of outsourcing service will work best for your needs.
Some businesses use one type of outsourcing for all business needs, while others choose to retain domestic outsourcing practices for certain types of services but not others. For example, a company might retain a domestic outsourcing situation for customer service, but have their manufacturing conducted via offshore outsourcing or nearshore outsourcing. This allows them to provide ideal customer support while producing products in a cost-effective way that also pleases the customer.
The COVID-19 pandemic was a major catalyst for global outsourced work. Everything shifted: more people were working at home, confined to their homes, and the pandemic hit different countries and locations at different times, meaning supply chains were affected and certain regions shut down entirely while others remained operational or came back online.
In addition, work-from-home arrangements became necessary for most roles during the pandemic, and experts say that work-from-home is here to stay: it’s more cost-effective than having the overhead of offices, it enables broader working hours, and distributed teams are more open to the labor costs saved due to the benefits of onshore outsourcing and working with outsourcing service providers. Managers can round out their teams with outsourcing partners that provide outsourced employees with the right competencies. Combined with automation and seamless sales processes, the pandemic has forced outsourcing opportunities and has allowed businesses to embrace new ways of working that include outsourced employees.
Each of the three types of outsourcing has benefits and drawbacks. Again, a combination may be best for you, or you may wish to engage a combination of onshore outsourcing, nearshore outsourcing, and offshore outsourcing.
Onshore outsourcing involves outsourcing business processes to a talent pool based in the same country as the business. This provides many advantages to the business, including time zone consistency, lack of cultural differences, and key cultural context and understanding (Learn more about onshore vs offshore outsourcing).
Onshore outsourcing enables businesses to retain a business entirely in their own country if they wish, but without some of the overhead of running a business with full-time employees (FTEs). The cost savings in this type of onshore outsourcing process include not having to hire W-2 employees, which come with a bunch of costs including healthcare, 401(k) contributions, and more.
You can learn everything you need to know about domestic outsourcing in our Complete Guide to Onshore Outsourcing.
Nearshore outsourcing is a business process involving service providers in a country near to the business’ own. Commonly, businesses in the United States will consider Mexican, Canadian, Caribbean, and Central American-based companies when looking for a nearshore outsourcing partner.
Benefits of working with a nearby country when outsourcing include a stronger cultural understanding of American customers and their needs; English-speaking ability; and flexibility to work in similar time zones for American customers as needed.
Nearshore outsourcing can be cost-effective, but limiting the offshore outsourcing options that include talent pools from the other side of the globe can cost money.
Offshore outsourcing occurs when businesses based in the United States send core business processes to workers in far-away countries. For example, US businesses that are considering offshore outsourcing might look into partnering with businesses in the Philippines, India, or China.
Although offshore outsourcing means your partners will be half a world away, there are significant benefits. For instance, your business will have the potential for round-the-clock business processes and customer care, with in-house teams in your home country working standard business hours, while outsourced agents work your “evening and midnight” shifts—which occurs during the daytime in their country, of course.
Significant cost savings are part of the benefits discussion as well. Depending on your company’s goals and needs, you can usually find incredibly talented offshore partners to work with at a fraction of the cost of hiring someone local.
Consider a small business startup in Austin, TX. Their central US location allows them to consider outsourcing work to onshore talent in New York, Boston, or Silicon Valley, all with minimal time zone differences and the ability to match the startup’s working hours. Hiring outsourced talent, like graphic designers, allows the business to focus on their own products and services without having to bring on a creative position, buying the software and hardware needed to do that job, if that’s not the primary focus of the company.
Another onshore outsourcing example showcases the benefits of working with partners that have lower costs of living. For instance, an office operating in Washington, DC, where the cost of living is high, might choose to outsource digital work to a service provider in Kentucky, where the cost of living is much lower. This creates two instances of cost savings for the business—not only do they avoid paying benefits and office overhead for this outsourced worker; they’re also tapping into a labor market in an area with significantly lower wage requirements. In this instance, both the employer and outsourced contractor win.
As mentioned, there are significant benefits to outsourcing that are specific to working with an onshore partner. Let’s review some of the most well-beloved benefits of onshore outsourcing:
Language barriers are surefire ways of creating miscommunications between vendors, companies, and customers, and miscommunications are made even worse when they occur between different physical locations and across large time zones.
By using a local outsourcing partner in or nearby your community, you can vastly decrease these communication troubles. And using a partner anywhere within your country all but removes any instances of language-based miscommunications, such as troubles that might occur when dealing with different accents.
As mentioned in the earlier example, it’s cost-effective to outsource, especially to a domestic location with a lower cost of living.
Any type of outsourcing allows you to save on office overhead, FTE employee expenses, the cost of supplying required hardware and software, and more.
Flexibility also ties in with this cost effectiveness, as you can hire an offshore service provider to handle things on an hourly basis, only as needed.
When utilizing onshore outsourcing services, you retain operations in your own country. This bolsters local communities and our national economy, instead of sending jobs overseas. Maintaining your entire workforce within your own country is a point of pride for many companies, and a selling point for many consumers.
While, for the most part, any nearshore or offshore outsourcing partner worth it’s salt wouldn’t let cultural differences get in the way of customer or coworker interactions, sometimes differences do occur.
For instance, imagine hearing that one of your offshore workers left the office in a hurry upon hearing about a cousin’s pet’s death. While this would be pretty unheard of in the U.S., family units in other countries can be incredibly close-knit, and workers would rather quit working for an unsympathetic employer than not be present to comfort their family.
Working with offshore partners can present innumerable similar cultural scenarios, none of which are bad or unacceptable—just different from how you operate your business at home. Working with an onshore partner means you don’t have to learn how to navigate such cultural differences.
Onboarding processes lay the foundation for your success with an outsourcing partner, and onboarding with an onshore partner is often just easier than when working with a partner overseas.
From legal agreements to tax forms, onboarding paperwork is easy to understand. And as a benefit, your outsourcing partner will handle all employment paperwork and expenses on their own.
Meanwhile, brand introductions, trainings, and shadowing all become easier as well, with recurring training visits easy to schedule since travel from your HQ to your partner’s office doesn’t require a visa, passport, or significant advanced planning.
When looking for an onshore company for outsourcing, consider the following points for evaluation:
TDS Global Solutions is your solution for finding a partner that checks all the boxes. Contact us today to discuss how outsourcing work to onshore team members can help your business—and bottom line—grow.