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Offshoring rides the next wave of remote work

Global economic forecasts indicate a rough road ahead for businesses to stay healthy and profitable in the second half of 2023. Rising inflation, interest rates and labour costs continue to threaten growth, with leaders being asked to do more with less.

At the same time, the workplace pendulum that has swung firmly in favour of employees for the past two years appears to be on a course correction. Employers in every country are asking their teams to return to the office and workers aren’t happy about it.

Earlier this year, employees slammed JP Morgan’s US return-to-office mandate as “tone deaf” and “divisive”.  In July, Australia’s largest bank faced a staff revolt over its WFH edict. Many workers are saying they’re considering whether to resign and seek other more flexible working arrangements.

The backlash has brought offshoring strategies into sharp focus for leaders, as they face pressure to find efficiencies and increase productivity. A recent US survey found that 7.3% of executive leaders are planning to move more jobs offshore as the next step from remote work.

Latest data shows a marked change from the start of the year, when businesses of all sizes were willing to pay well above market rate to secure local resources for vacant roles – along with benefits like “WFH forever”.

While COVID’s great workplace experiment shone a spotlight on just how much of our days are wasted on commuting, meetings that should be emails and admin tasks, it also blew up outdated perceptions of remote work. For two years, employees have been encouraged – and lauded – for dialling into meetings from their cars, kitchen tables and local dog park.

It’s clear the tide has turned.

Richard Baldwin, an economics professor at the Graduate Institute in Geneva who studied the “offshoreability” of teleworking jobs, recently gave a warning at the European-based Center for Economic Policy Research, “If you can do your job from home, be scared. Be very scared because somebody in India or wherever is willing to do it for much less.”

Cut costs and redirect high-value skills

In much the same way AI is threatening jobs in every industry, modern offshoring models are offering businesses a powerful way to tackle economic and labour uncertainty. Highly industrialised countries, like Australia, the UK, US and Canada offshore to countries like the Philippines to curtail operational costs and boost productivity.

Gone are the days of “out of sight, out of mind” outsourcing practices. Today, businesses are hiring offshore resources to augment onshore teams, freeing up core talent to spend more time on strategic work.

Nicholas Bloom, an economist at Stanford University and an expert in workplace matters, told the Wall Street Journal, “About 10% to 20% of US service support jobs, like software developers, HR professionals and payroll administrators could move overseas in the next decade.”

In the US alone, around 300,000 US jobs are outsourced yearly, and 66% of businesses outsource at least one department. According to Zippia research, roughly 30 million jobs in the US are vulnerable to outsourcing. Information technology is the most outsourced industry and business division. The average IT department allocates over 13% of its budget to offshored roles, and roughly 37% of IT tasks are outsourced.

Globally, software programmers are the highest in-demand resource – a trend that will only tick upwards as AI expands into every industry. For Australian, New Zealand and UK companies, finance, accounting and administrative resources – including Virtual Personal Assistants – are also in demand, as are roles in travel, recruitment and real estate.

Offshoring, but not as you know it

Leading offshore providers like ConnectOS are spearheading the shift. ConnectOS’ Integrated Resourcing model allows employers to hire and manage offshore staff in the same way as their other employees. Offshore employees work over Zoom and Teams, so they become a seamless extension of core teams. They often join their colleagues in-person for annual team-building events.  Meanwhile, ConnectOS takes care of all HR, IT security, legal and workplace requirements.

Integrated Resourcing is a partnership built on trust, transparency and an abundance of highly-educated talent ready to put their skills to work.  Amidst growing workforce resistance, labour shortages and cost-cutting imperatives, it’s a compelling strategy to future-proof your business.

ConnectOS is a leading offshore provider for large enterprises and small businesses. Reach out to find out more about how we’re helping companies around the world reduce costs and find efficiencies with Integrated Resourcing strategies.