11 Aug 2022
Global corporations will always require assistance, particularly when it comes to hiring personnel. Good for them; offshore staffing is now more reliable and well-known than ever before. Global firms no longer need to be concerned about labor shortages because offshore recruitment is here to save the (working) day.
In developed countries, the low unemployment rate and high costs make it difficult to expand and maximize the potential growth of their businesses.
Businesses should expect stiff competition in their local employment market, in addition to the ongoing skill gap that exists in several countries.
Fortunately, offshoring recruitment processes give them a competitive advantage.
Offshore recruitment refers to the process by which businesses hire local talent for operations in another country. To better understand it, consider why and how businesses offshore.
The abundance of skilled and affordable labor is the most compelling reason for a company to choose an offshore location. They may also take into account political stability, favorable trade laws, and tax structures, as well as the business climate.
When they have decided on an offshore location, they typically have two options:
Delegate work to a local third-party outsourcing firm (also known as offshore outsourcing). In this approach, the third-party firm handles the majority of the tasks, including talent acquisition, while the parent company retains less control over business functions and human capital.
Establish a captive center and assemble an in-house team. A captive center is a business unit that is fully controlled by the parent company and operates in an offshore location. The company may choose to hire an in-house team directly or through a recruitment agency in this approach.
Offshore recruitment allows a company to outsource some or all of its recruitment processes to third-party service providers.
They can delegate a few tasks, such as job posting, screening, and exam preparation, to an offshore team, or they can delegate the entire department. The offshore recruitment team will be in charge of finding, screening, and hiring the best candidates for each position. The offshore team usually works on the extra aspects after the employees are hired. This includes their pay, benefits, training, and job requirements. For a good return aim for top recruitment process outsourcing companies.
4 Major Advantages of Offshore Recruitment
Here are four ways offshore recruitment can help your company grow:
1. Cost-cutting measures
Popular offshore destinations, such as India, China, Mexico, and the Philippines, all have one thing in common: their average wages and cost of living are lower than in developed economies.
Average salaries in India and the Philippines, for example, are around USD 428 and USD 854, respectively. In comparison, the average salary in the United States and the United Kingdom (United Kingdom) is significantly higher, at USD 7,900 and USD 7,732, respectively.
Companies can also save significantly by taking advantage of tax breaks and other financial incentives provided by the local government.
2. Availability of Skilled Workers
Skilled labor is typically abundant in major offshore locations. They also have a large number of professionals who are fluent in English and other in-demand skills.
Ukraine, for example, has a large talent pool of over 280,000 IT specialists. Similarly, Taiwan's thriving semiconductor manufacturing sector will employ over 290,000 people in 2022.
Because of the low labor costs, companies typically bulk-hire in these areas, which strengthens the local job market and education system.
Furthermore, the outsourcing-centric business ecosystem ensures that businesses have access to specialized services and infrastructure.
This makes offshoring a viable option for companies in developed economies where achieving this price/quantity/quality ratio is difficult.
3. Continuity of Operations
Offshore recruitment allows businesses to operate in different time zones, allowing for continuous operations.
An American company, for example, can have its onshore employees hand over work to its offshore team in Asia after a 12-hour shift, ensuring 24-hour operations.
This is especially useful for customer service businesses looking to provide a better experience. It can also help them expand their customer base beyond their home country.
Many multinational corporations, including CISCO and Microsoft, outsource their technical support and customer service operations to India. The time difference between India and America (Pacific Time) allows US-based businesses to operate around the clock.
Similarly, an IT firm can delegate maintenance and administrative tasks to its overseas team after its onshore team has signed off for the day
4. Financial Incentives and Beneficial Laws
To entice foreign investment, governments in popular offshoring locations typically offer financial incentives. Among these incentives are:
Tax exemptions.
Financial grants and operational assistance are provided through flagship schemes.
Access to specialized zones with cutting-edge infrastructure at reasonable costs.
For example, the Philippine government provides a 4- to 7-year income tax holiday to foreign companies registered with PEZA (Philippine Economic Zone Authority).
Furthermore, these offshore locations typically have more liberal employment laws, giving businesses more flexibility and control over how they hire and manage their employees.
To sum up
In general, outsourcing a service allows businesses to enter a new market. They can conduct market research on what services they can provide in a specific location using their outsourced employees.
As in the case of large corporations such as Google and Amazon. Offshore recruitment not only allows them to expand their workforce, but it also allows them to reach a new market. They have control over how they hire and manage their employees.
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