What is Offshore Talent
Offshore Talent or employees refer to candidates who are working for an organization remotely from different parts of the world.
Why Offshore Talent, Problems With In-House Management
1. Time-Consuming Recruitment Process
· – It’s probably the most major issue why companies are ditching in-house teams and hiring offshore employees. We all have been there when we faced an exhausting recruitment process. Studies show that a company spends an average of 55 days per candidate for the recruitment process, you must be arguing yes, it takes that much time as the company needs to verify if the candidate suits their need or not, well yes you are correct. However, we all know time is precious and some companies even after putting in a lot of hard work and steps to filter the right candidate somehow end up with a portion of bad hiring, which can drive their company to a dire loss. Hence, they hire offshore talent as they are verified experienced professionals who know their work area.
· – Also, commitments like notice period, and the time is taken by candidates to join a company make this process go over 2 months, that’s right companies sometimes wait for that much for a candidate.
· – Moving ahead to a slow hiring process and the cost a company has to bear while they hire a candidate. According to research data the cost to hire an in-house candidate in the US only surpasses $20 billion per year, that much money is being put into hiring an in-house candidate which is insanely huge.
2. The Loyalty of New Hiring
No offense, freshers have a strong enthusiasm and potential to gear up businesses to achieve greater goals. Companies have to train freshers a lot as they do not have any prior experience in their relevant field, and various training sessions and workshops are arranged for these new joiners which again means companies’ cost increases per in-house candidate. Having said that, these new joiners on the other hand leave their jobs after a year or so, this is concerning companies as they invest a lot of time and money to train them to become aware of every other technology. Companies don’t seem to like this fact as they lose a lot of things and gain less profit. Companies will only be wasting money if their candidate remains in their company for a year or so.
3. Less Flexibility
There are times when companies require a special skill set to complete a project as the project runs only on that technology. If their in-house teams lack these skill sets companies may have to hire candidates with those relevant skill sets, which makes no sense because the company cannot add candidates for a short period till the project is completed. They may have to keep these skilled candidates on payroll to complete that project which is another loss for the company as they won’t be requiring them after finishing the project.
Many people get confused about understanding offshore and outsourcing as they sound like similar concepts. To bring clarity to the subject we have to understand what these two strategies are and by doing so we can be able to distinguish both and understand for what scenario they are made for when to approach which strategy and so on.
The easiest way to define offshore is an organization opening its subsidiaries from its headquarters in different parts of the world. For example- Google and Microsoft Have subsidiaries in other parts of the world to carry out work in that particular region hence these are called offshore companies. These offshore subsidiaries can still be managed by its headquarters located in the home base giving more control over the operations in each subsidiary.
2. Offshore Talent or Employees
Now we know what offshore means, let’s look more into the offshore candidates. Similar to the concept of offshore companies the offshore Talent or employees refer to candidates working for an organization from different parts of the world.
3. Offshore Strategy
The offshore strategy has gained huge momentum as the world craves for skilled candidates to fulfill its demand and resource gap. The offshore strategy helps bring quality work enhancing a company’s reputation and ratings. Also, their market reach gets expanded as the developers in different parts of the world can act as brand ambassadors. The offshore strategy helps to spread awareness about their company in different parts of the world gaining more huge chunks of clients worldwide. As the company’s market reach expands they are likely to get more benefits like increased market value and profits.
4. Offshore Advantages
Cost-effective as there is a huge difference in currency exchange rates and chances are companies will find a pool of talent at a cheaper price.
Opens the door to do business in the international market where the subsidiary is located.
The easiest way to define outsourcing is an organization reaching out to a third-party vendor to do its activities. For example- an IT company reaching out to a third-party vendor for blockchain developers who are situated in different parts of the world as their in-house team lacks that particular skill. These activities are managed by third-party vendors as they are responsible for hiring candidates.
1. Outsourced talent
Outsourced talent is handpicked by third-party vendors and they are highly experienced and skilled employees, as they have the relevant expertise for a job they are highly productive and can enhance the projects in no time.
2. Outsourcing Strategy
3. Outsourcing Advantages
Scales up third-party vendors’ profits and the economy as it gets more businesses from different companies around the world.
Cost-effective for companies who reach out to third-party vendors as the candidates work from the different countries which have huge currency rate differences. Hence, the vendors and employees will get paid at a reasonable price.
Top Reasons to Hire Offshore Talent
Now to the most important point, what do you think encourages companies to hire offshore talent? though there are many reasons they prefer hiring offshore employees, and it gives opportunity to many small businesses to show their capability with the teams they have. But wait what about in-house talent won’t they be affected by these strategies? Well, the answer to this is no, though offshore employees tend to be highly skilled and experienced they are equally rare to find hence in-house teams can rest assured about their job security. To have more insights let’s look at those reasons-
1. Cost-Effective Approach
1. We have been through this point in offshore vs outsource but to give you more detail on this fact, many companies in the US save more than $2000 dollars per in-house employee each year by hiring offshore talent.
2. This is not the only reason companies look to hire offshore talent as the cost of hiring an offshore team of developers is low as compared to in-house teams. You might be wondering how? Well, the offshore developers are located in different parts of the world and they work remotely saving all of these office costs. Not to forget some of them reside in third world countries meaning their economies are growing but not strong enough hence they will get a fair pay deal and remote work which again will boost the company’s product development.
2. Offshore Talent is More Efficient
Companies are confident about their in-house team and their expertise in building a project, but studies have shown that offshore employees tend to be more effective as they work in a remote work environment. Not to forget the level of expertise they have, offshore talent is mostly hired when there is a crucial role to be filled. As these roles are crucial and their tasks need to be performed carefully, a candidate with expertise in the relevant field is required and there is no other skilled employee than an offshore developer and that’s why the company approaches them as they have proven their skill sets in a variety of different tech industries.
3. Expands Market Reach
Now we have started to understand how effective offshore strategy is, we need to understand how it helps in the expansion of the company’s market reach. As offshore talent works in different parts of the world they can promote their company in their region using social media and the developer community. They can act as ambassadors representing the company they are currently employed to. This allows the company to expand their market reach as they gain more clients from that particular region. For this reason, offshore talent is perfect to expand the business.
4. Scalable Teams
As compared to traditional hiring offshore hiring is much easier and it takes less time to onboard candidates to the team. This provides high flexibility to companies to scale their offshore team as per market needs, hence offshore employees help companies around the world to scale up their businesses as the market grows.
5. 24*7 Working
One of the greatest benefits of offshore talent is that teams around the world can operate 24*7 according to their timezone. We all know offshore teams work from different countries and a company is likely to hire multiple teams to have the flexibility to handle different teams whenever they want. If a team is working from Europe and stops working after its working hour is completed then other teams which may be located in India can work as their time zone is different, hence the companies can always have multiple teams who might be working 24*7, and it enables them to provide product development at a faster rate.