What is offshoring, outsourcing, nearshoring, onshoring?

Lydia Gan
Lydia Gan
February 23, 2021

So you’ve decided to look beyond the local talent pool to hire for your company. Maybe there is a particular shortage of the role in your local region, or there is a hike in the salary expectations, the point is you want to look at the other options available. 

There are certainly a variety of overseas hiring opportunities. But when terms like “offshoring”, “nearshoring”, “outsourcing” and “onshoring” all come in at once, they seem interchangeable and may even be confusing. 

This article will help to break down each term so that you can decide which of the options best suits your business needs. 

1. Offshoring

Typically, offshoring refers to a work model where the work is done by employees in different regions and countries. It is a geographical activity, not only relating to the production of physical goods, but also services. For example, look at the IT industry in India which has been powered by technology companies in the West choosing to offshore. 

An offshore team functions independently, and all offshore employees are full-time employees of the company. 

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2. Nearshoring

Straightforwardly, nearshoring is like offshoring, but in places closer to your local region or country. In Singapore, this could mean hiring talents from Batam, Indonesia, which is just a ferry ride away. 

3. Onshoring

Simply put, onshoring is the opposite of offshoring. It is the relocation of your business processes to a location inside national borders, but in a lower-cost area. Typically this occurs from a metropolitan, developed area in the country to a non-metropolitan one. 

4. Outsourcing

Lastly, outsourcing is when you engage a third-party vendor by contract. They are set to deliver specific objectives and results. This could mean working with freelancers, or organizations who work with freelancers. 

Another way to look at outsourcing is as a transfer of operational activities, of value-based suppliers. Sometimes, businesses will aim to shorten their supply chain, reducing services supplied internally. 

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So, which option is the best for you? If you are ready to boost your business by exploring offshoring, Glints is here for you. 

Glints TalentHub lets you hire risk-free with our 90-day guarantee on our recommended candidates. Find a wide range of qualified talents who can perform the tasks that you need to scale, drive and upgrade your business, anywhere and anytime. Choose from our 1M+ fresh profiles, alongside Glints’ tech-enabled recruiters. 

Contact us here: it only takes 5 seconds. 

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