The Pros And Cons Of Offshore Staffing
There are extensive advantages to offshoring, and it is most often used as a way to expand business and maintain margins because there is less financial outlay for recruitment, resources, and development. Offshoring to Vietnam will cost less, while quality and output will remain high. Vietnam is currently one of the world’s most popular offshoring destinations as it has lower labour costs and a better-skilled workforce than other established locations, such as India and China.
Offshoring makes good financial sense; it’s an investment in your company’s future and growth. There are extensive advantages to offshoring, and it is most often used as a way to expand business and maintain margins because there is less financial outlay for recruitment, resources, and development. You also have the flexibility to increase and decrease staff numbers as needed, hire temporary staff, or recruit specifically for a one-off project.
Understanding the pros and cons of outsourcing helps an organisation build a successful business strategy and make informed decisions.
Vietnam is currently one of the world’s most popular offshoring destinations as it has lower labour costs and a better-skilled workforce than other established locations, such as India and China. For example, Vietnam is now seen as a destination of choice, as Chinese manufacturing costs have risen, and communication is often an issue. Likewise, in India, staffing costs may appear to be low, but in reality, salaries are rising fast, so if you see a low hourly rate it usually means a new staff member and/or a low-quality job.
Disadvantages of offshoring are often associated with poor quality output and high staff turnover, and while this can be the case in India and other countries, it is not true of Vietnam. Vietnam has a well-educated, hard-working workforce with strong technological and scientific skills. Vietnamese people value the opportunity to work for an overseas company, and staff will generally stay in one job for a long time. Additionally, they are often looking to upskill, often undertaking training and further English language skills in their own time.
So, offshoring to Vietnam will cost less, while quality and output will remain high.
Businesses looking to Vietnam as an offshoring destination will also save on insurance, taxes, workers compensation, health insurance, and other expenses by employing staff based in Vietnam. However, although costs of wages are lower, it important to maintain the quality of your services and products. Training and upskilling your overseas staff becomes an advantage for you–in terms of quality–and for Vietnam, as a better-trained workforce benefits the Vietnamese people. Offshoring is an advantage to employment rates in the host country but can be viewed as a disadvantage to jobs at home. However, offshoring has been shown to increase jobs in the home nation long-term, as your company grows and prospers.
Service quality, trust, cooperation, and communication are important the success of your offshoring venture. Although you are moving aspects of your business away from your core location you still maintain control of the offshore project. It’s like having a branch of your business overseas, and like any project, regular communication and efficient monitoring are key to success. An advantage is that each partner will benefit from establishing respectful relationships.
Successful offshoring comes from not only choosing the right staff but also choosing the right partner. A good offshoring partner will advise on operational aspects, costs, and project expectations.
It makes sense to engage in a collaborative partnership with a specialist offshoring company such as Remote Resources in Ho Chi Minh City, Vietnam. It’s also a bonus that Vietnam’s laws and policies favour business and foreign investment. The World Bank predicts economic growth will exceed 6 percent from mid-2017 to 2019 – this makes Vietnam among the world’s best economies for growth. Vietnam’s Association of Foreign Invested Enterprises, says Vietnam is attracting foreign companies with its pro-investment policies, low inflation rate, and stable local currency. Vietnam’s policies are advantageous as they have enabled the country to stay protected from recent changes to trade partnerships, meaning that Vietnam remains the best choice in the region for offshoring.