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