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Offshoring vs Outsourcing: What’s the Difference?

Let’s say you run a company, and you need some extra help. Maybe you’re kicking off a new design project for a big client, or perhaps your law firm needs assistance in conducting administrative tasks. Whatever the circumstances may be, hiring one or more full-time employees to come to the office every day may not fit in your budget or make sense in the long-term. At this point, you might be considering outsourcing or offshoring, but aren’t sure which one is better. You may not have been aware that there even is a difference between the two. That’s okay! In this blog, we’ll explore the key differences between these processes. Continue reading to learn even more about Remote Team Solutions can help your company!

What is Outsourcing?

With outsourcing, a client gets some of their work done by subcontracting it to a third party. Now, this third party could be anywhere, really — across the world, on the other side of the country, or down the street—but it’s another entity entirely.

 

For Example
A U.S. company hires an independently-operated call center in India to field customer service calls. While it has a reputation for being cheap alternative labor, outsourcing takes away some of the clients’ power. They don’t have control over crucial elements such as choosing their staff and who is directly managing it.

 

What is Offshoring?

Offshoring is similar to outsourcing, and you can think of it as “outsourcing” all HR functions of your staff and office functions, giving you more control over the process. With offshoring, companies gain access to specialized talent at a lower cost. Unlike outsourcing, offshoring gives the client full control over the hiring process, management, and team flexibility. Offshoring is the more recent recruitment option of the two, but has quickly been embraced as a valuable addition to business management strategies.

For Example
A U.S. engineering firm builds a team in Mexico to design certain components. Since all operations are still happening within the same company, this is considered offshoring.

 

For more information on offshoring with Remote Team Solutions, contact us today!

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