Offshoring IT: Should You Send Tech Jobs Overseas?


January, 2024

Offshoring IT: Should You Send Tech Jobs Overseas?

topic Offshore IT recruitment visibility794 views

Have you been grappling with whether or not to send some of your tech jobs overseas? The promise of lower costs and access to skilled talent is enticing, but you know offshoring IT isn't without risks. As the head of an IT recruitment firm, you want to make the smartest choice for your company and your clients. Before you make a decision you regret, consider what offshoring really means and whether the rewards outweigh the risks. The impact to your business, your employees, and your clients could be huge. While offshoring may seem like an easy answer to cost and talent problems, look before you leap. The choice isn't always as straightforward as it seems.

The Pros of Offshoring IT

Offshoring IT jobs to cheaper overseas markets can save your company a ton of money. Labor costs are often 50-70% lower for example in Eastern Europe compared to the US and Canada.

Lower Operational Costs

By sending tech jobs overseas, you'll slash operational costs. Things like office space, equipment, and healthcare are far more affordable abroad. And because living expenses are lower in other countries, you can pay workers less while still giving them a good standard of living.

Access to Skilled Talent

Emerging tech hubs around the world have a wealth of engineering and IT talent. India alone produces over 1.5 million engineers each year. Tapping into these talent pools gives you access to highly-skilled, motivated workers at a fraction of the cost.

Round-the-Clock Support

Offshoring also allows you to provide 24/7 support and services to your customers. You can have teams working shifts in different time zones so someone is always available. This "follow-the-sun" model is a huge benefit for companies offering tech support, web services, and other real-time solutions.

Of course, offshoring isn't without its challenges. Cultural differences, communication issues, and quality concerns need to be considered. But for many companies, the pros far outweigh the cons. Offshoring IT and tech jobs could be a strategic move that boosts your bottom line and helps you scale for growth.

The Cons of Offshoring IT

Offshoring IT isn’t always sunshine and roses. There are some significant downsides to consider before sending tech jobs overseas.

Cost savings may be elusive

Many companies offshore IT to cut costs, but the reality often falls short of expectations. Hidden costs like managing offshore teams, travel expenses, and productivity losses can eat into savings. The time difference can also hamper collaboration and slow work.

Quality and productivity may suffer

Offshoring technical work requires skilled management to be effective. Without proper oversight and control, quality and productivity can suffer. Staff in offshore locations may lack context about systems, processes and company culture, leading to lower quality work.

Data security risks increase

Having IT staff in far-flung locations increases the risks of data breaches or leaks. Strict controls and oversight are needed to ensure sensitive data and systems are properly secured. If controls are lax, the consequences can be severe.

Employee morale may decline

Existing staff may feel threatened or resentful about their jobs going overseas. This can hurt morale, motivation and retention. Many employees value job security and opportunities for career growth. Offshoring can undermine both.

Customer service may be impacted

With IT and technical support located offshore, end users may experience delays in service or issues lost in translation. Cultural and language barriers can get in the way of effective support, frustrating users.

While offshoring IT may cut costs in some areas, companies need to consider the potential downsides. For the best results, thorough planning, oversight, communication and relationship-building are must-haves. If done right, offshoring can work. If not, the cons may just outweigh the pros.

Key Factors to Consider When Offshoring IT

Offshoring IT jobs is a big decision that requires careful consideration of several factors. As an IT recruitment company, you want to make the choice that is right for your business and clients.

Cost Savings

Offshoring IT roles to countries with lower costs of living, like India or the Philippines, can significantly reduce salary expenses. However, there are additional costs to consider, such as infrastructure, training, management, and possible drop in productivity or quality. Analyze the total cost of offshoring compared to keeping jobs domestic to determine if the financial benefits outweigh the costs.

Skill and Expertise

Some IT skills are in high demand but short supply locally. Offshoring may give you access to expertise that is hard to find at home. However, cultural and language barriers can make it more difficult to assess candidates’ skills and manage offshore teams. Consider if the skills you need can be adequately fulfilled remotely.

Business Continuity

By distributing IT resources across geographic locations, you gain more flexibility and stability. If an outage occurs in one location, teams in another location can take over critical functions. However, offshoring also introduces risks around connectivity, security, and operational control. Weigh the pros and cons of offshoring for your disaster recovery and business continuity plans.

Adaptability to Change

The IT field is constantly evolving, so look for resources that can quickly adapt to new technologies and ways of working. Offshore teams may be equally able to keep up with changes, or they may face more difficulties due to cultural differences or lack of contextual knowledge. Determine if offshoring will support or hinder your ability to adapt to changes in technology, tools, and client needs.

Security and Compliance

When offshoring IT, you must ensure that security, privacy and compliance standards are upheld. It can be more difficult to enforce policies and monitor risks with offshore teams. Consider if your sensitive data and systems will remain adequately protected, and if offshoring will impact your ability to comply with regulations. If there are concerns, it may be better to keep certain IT functions onshore.

In summary, offshoring IT roles can provide benefits around cost, skills and business continuity, but it also presents risks to adaptability, security and compliance that you must evaluate based on your organization's priorities and risk tolerance. With careful planning and management, the rewards of offshoring may outweigh the risks. But if the risks pose too significant a threat, keeping IT jobs domestic may be the safer choice.

Make Offshoring IT a Part of Your Business

At the end of the day, deciding whether or not to offshore your IT department is a tricky choice with many factors to weigh. But you have to do what’s right for your business and your bottom line. If cost savings and efficiency are your top priorities, offshoring IT could be a smart move. Just make sure you find a partner you trust, set clear expectations, and keep open lines of communication. On the other hand, if close collaboration, control, and company culture are most important, keeping tech jobs in-house may be worth the investment. The key is balancing your priorities and determining what will drive the most value for your organization and customers. Whatever you decide, choose wisely and never stop reevaluating as business needs change. The tech landscape is always evolving, so you need an IT strategy that can keep up.

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