Buttons that show the letters A, B, and C. A hand points to C. It reads "What outsourcing is right for my business?"

Choosing the right outsourcing type for your business

If you are thinking about outsourcing as part of your business recovery strategy, it is important to choose the right outsourcing type that aligns with your business needs. Expectations vary when it comes to outsourcing and an individual organization’s management style needs to be considered when choosing the right outsourcing solution.

Our customers share many of their success stories about their outsourcing experience with us. While an organization’s primary motivation for outsourcing varies, most reported that they were able to cut costs, increase their productivity, improve their efficiency, and benefit from the extremely low staff turnover. In the last year, outsourcing has allowed global businesses to remain fully operational despite the effects brought by the COVID-19 pandemic.

If you are new to outsourcing, the experience can be quite overwhelming. As you try to navigate through the processes, you might wonder whether or not it will work. However, outsourcing offers tremendous value when you understand how it works and what model is best suited to your business. 

Determining the right type of outsourcing

There are several types of outsourcing and it’s important to select the right option to be able to fully maximize its benefits. 

Essentially, this will depend on your business objectives. Ask yourself these questions to help you work your way through finding the right model for your organization.

  • Are you trying to reduce overhead costs such as office space, supplies, software, computers, and other corporate expenses? 
  • Do you want to have access to world-class talent and hire the very best staff at a fraction of the cost of hiring locally? 
  • Do you need a 24/7 workforce to extend your hours of operation? 
  • Are you looking to maintain business continuity and security?
  • Do you need additional resources and expertise in some areas of your business? 
  • Do you want to maintain full control over your business operations?

The different types of outsourcing

Once you have identified your goals, it’s time to look at the different types of outsourcing. 

Onshore Outsourcing

Some businesses prefer working in close proximity to their outsourcing partners. This setup, which is also known as local outsourcing, is done within the geographical borders where your business is located. It provides you with prompt or just-in-time services.

Some entrepreneurs choose to outsource locally because coordination and communication are more flexible and efficient. They can also spend time with their staff on occasion without worrying about language or cultural barriers. 

This type of outsourcing is quite expensive (in fact, it can be more expensive than hiring locally) and since they are within the same time zone, you do not get the benefit of time-shifting or having access to an extended talent pool. 

Nearshore Outsourcing

In nearshoring, companies outsource in a nearby country. When business owners evaluate their processes, they often realize that this business model fits their needs. There might be little cultural differences but this is considered trivial since companies get the opportunity to enter neighboring markets. 

When it comes to time zones, choosing a place that is a couple of hours ahead can help you extend your hours of operation. The cost is also a little lower compared to hiring or outsourcing locally. 

Offshore Outsourcing 

Outsourcing to a remote country can be the best approach for businesses, especially when they want to lower their operating costs significantly. It’s easy to gain access to skilled professionals and the latest technology. 

When business owners look at their pain points, redundancies and inefficiencies, they often see huge advantages in offshoring. They have more time to focus on their core business, reducing pressure on their local team and gaining a competitive advantage.

Looking for other outsourcing tips and strategies?

Cloudstaff’s outsourcing experts are always available to help. We’ve been setting up teams of outsourced staff in the Philippines for over 10 years for companies of all sizes. From helping you get started to fine-tuning high-performance teams, we are always happy to share our experience with you. Speak with us today.