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Why Businesses Choose to Outsource In Spite Of Trump

April 26, 2017 Claire Ponsaran
Why Businesses Choose to Outsource In Spite Of Trump

Contrary to expectations, small to medium-sized businesses are not putting their plans to outsource on hold any time soon. Offshore outsourcing of labor and services, as compared to insourcing or building an in-house team, provides greater leverage for businesses to catapult their growth in a year or two.

This desire to expand one’s market reach and base of operations seems to be stronger than worrying about what Trump and his posse would do in retaliation against companies that outsource. Here are three reasons why businesses continue to leverage the benefits of business process outsourcing in spite of Trump.

#1 Businesses outsource because they save a lot on general and administrative overhead costs.

Companies that outsource some of their business processes rarely need to pay for office space, utilities, accounting, legal fees, research and development, administrative salaries, and other related expenses. They don’t need to hire people from other countries to work as migrant workers on H-1B visas in the United States.

Contrary to popular belief, companies that outsource pay for the TALENT and HARD WORK provided by foreign workers. They are not sending a lot of money abroad, so much so that the U.S. GDP is affected.

You can’t even categorize this as exploitation of low-cost labor since workers in the outsourcing industry are paid higher-than-average rates in their respective countries. It’s wrong to compare wages earned by workers in the United States with those earned by workers in another country. The costs of living in the Philippines, for example, are more than 90% lower compared to the costs of living in the United States.

There’s no capital outlay either. Outsourcing providers take care of the facilities and equipment that their employees need to do their jobs. Their clients only pay for the services rendered. In general, small businesses can save between 30% and 50% when they outsource rather than insource or hire in-house staff.

#2 Most businesses want to take advantage of the benefits of global collaboration.

Many businesses think of outsourcing as a global collaboration. It’s a great opportunity for them to take advantage of the benefits of having a diverse talent pool and a cross-cultural work environment.

Workers in the Philippines and the United States, for example, have different cultural and academic backgrounds. When you have a diverse team, you have people with different ideas, experiences, and skill sets working on the same project. This kind of diversity can lead to innovation and reinvention.

Some may argue that the United States already has a variegated workforce. Why else should businesses look for workers in other countries? The answer is not in the much-maligned idea of paying for low-cost labor. It’s in the QUALITY of workers that companies would rather hire.

Compared to workers in the United States, outsourcing workers in the Philippines grew up with a dream of getting a well-paying job to help their families. They value their jobs more and show pride in their work. They have a strong work ethic. They arrive at work on time and they’re willing to stay behind when necessary. Few outsourcing workers complain about working on their rest day or on a holiday unless they’re really needed at home or they’re sick.

#3 Many businesses have a desire to help those who needed it most.

Of course, regular employment is not the be-all and end-all for many Filipino workers. Some of them dream of climbing up the ranks, and earning more as they go. Others dream of earning enough money to finish a higher degree or to start a small business of their own.

The desire to help among business owners and executives can’t be easily quenched by the act of donating to charity. Charities are good, but there’s greater satisfaction in seeing your staff learn new skills, grow to their full potential, and develop a sense of agency over their lives.

Based on what has been happening in the United States, most of those on the receiving end of Trump’s contemptuous pout are mostly big corporations that moved their manufacturing operations to other countries. In the services sector, you’re not shipping out your operations. You’re not even sending work that’s fundamental to your business. Only you and your core management team can perform those jobs.

Most outsourcing companies operate in a managed services model wherein the provider has on-site managers to oversee the work that your remote staff is doing. You’re assured of quality control and efficient resources management, but you’re the one who makes the pivotal decisions in implementing your outsourcing strategy.

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