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A business achieves exponential growth when it uses its resources wisely. From quick expansion to long-term growth, many things depend on this single factor. Thanks to increasing globalization, organizations can extend their reach in this regard. They can either choose offshore or onsite resources.
Some of you may or may not have heard of these terms. But chances are, you’re familiar with their fundamentals. In this article, we will explore the aspects of offshore and onsite resources. We would compare merits and demerits while figuring out their usability to firms. So without much ado, let’s dig deeper and see how they benefit companies in their own ways.
Understanding the Difference Between Offshore vs. Onsite Resource
In simple words, offshore resources are people who are based in a different country than that of their employers. For example, Indian accountants work in a company that’s based in the US and has no presence in India. Those workers will be offshore resources for that particular US company.
On the other hand, if that company hires people only from the US, then the latter will be on on-site resources. In the past few decades, the prevalence of offline resources has increased. Especially in developed countries, finding cheap yet skilled professionals is quite easy.
This system has benefitted both the parties equally. While the companies find talented workers at a low cost, the employees find great opportunities without moving anywhere. Also, it helps strengthen the economy of the offshore employees’ countries. But it doesn’t mean that this concept works for everyone.
There are many companies that choose onsite resources over offshore manpower. And they have some valid reasons for it too. As we all can understand, everything has its downsides and upsides. In the case of offshore staffing, companies save money on the face of it. However, they may end up spending lots of money and time on other stuff.
To understand this fully, one must know about the basic aspects of both. Whether offshore or onsite resources will suit a company depends on various factors. Some organizations are willing to invest time in adjusting to non-native people and some are not.
Ultimately, what benefits them the most matters. To find that out, let’s dig deeper into the concept of offshore and onsite resources.
Advantages of Offshore Resources
Cost-Effective: Low cost is the most appealing factor of offshore resources. As mentioned above, firms from developed countries have adopted this method. Many of them have been doing it for years and gained success while saving plenty of money.
Diversified Talent Pool: Another big merit of going offshore is that you come across a diversely-talented pool. That’s because you hire people who grew up in different cultures. As a result, you encounter some very interesting ways of working and living sometimes.
Round-the-Clock Operations: Companies outsourcing their work can make the most of the time difference. Another thing that many companies do is that they hire people on night shifts. At the same time, they have to pay a hefty sum for it. But in offshore cases, the cost is extremely low.
Disadvantages of Offshore Resources
Data Security Concerns: Companies hiring offshore workers have to implement rigorous practices for data protection. Despite all their efforts, there’s always a chance of breaches or leaks. Usually, companies end up engaging in consistent compliance exercises.
Extra Focus on Quality: Quality control can also become a challenging task in this environment. That’s because there could be stark differences in the work culture and standards in both countries. Hence, firms have to evaluate the offshore workers’ performance very closely.
Communication Challenges: Variations in culture and language create communication barriers. Many organizations first train their offshore resources in their native tongue. They also teach various norms of their countries for a better understanding of work. Again, this is something they have to work on continuously.
And now, let’s talk about the merits and drawbacks of onsite resources. For many companies, it is more efficient, so let’s try to find out the reasons.
Advantages of Onsite Resources
Proximity and Accessibility: Onsite resources are available for immediate and face-to-face interactions. They are the go-to choice when you want the collaboration among different teams to be seamless. Moreover, they make problem-solving faster and nurture a better sense of teamwork.
Better Control and Oversight: With all employees working in the same office, management becomes easier and better. People can resolve their problems in real-time by talking to the concerned personnel directly. You won’t have to conduct a conference to resolve every problem.
Cultural Alignment: Since they belong to the same country, onsite resources share congruent cultural contexts. It brings everyone on the same page and makes the workplace more amicable. While it may look insignificant, it helps companies in the long run.
Disadvantages of Onsite Resources
Higher Operational Cost: Onsite resources are quite expensive than their offshore counterparts. In addition, companies have to provide various other benefits than just the salary. They have to spend a large amount of their profits on expenditure instead of saving.
Limited Talent Pool: Bringing diversely-skilled people is always beneficial for companies. But that doesn’t happen in the case of onsite resources. Their talented pool is often very limited which hampers innovation and competitiveness.
Dependency Risk: Depending only on one channel for work could cripple your business in unforeseen circumstances. For instance, any sort of civil unrest, outage, or unplanned leave by employees could hinder the work on one site. Nonetheless, if they have some offshore employees as well for backup, the situation would always be better.
Offshore vs. Onsite Resources: How to Decide?
Choosing between offshore and onsite resources is a typical strategic decision for businesses. Each resource offers several advantages and disadvantages. Here’s a quick guide on how to make the correct decision:
Key Factors to Consider:
- Cost Efficiency:
Offshore: Generally more adaptive and cost-efficient because of lower labor costs.
Onsite: This can be expensive but a good option for immediate collaboration and hands-on involvement.
- Communication:
Offshore: May face time zone differences and potential language barriers, which highlights the need for communication protocols but thanks to modern platforms like Google Meet, Microsoft Teams and other such advanced communication tools, remote collaboration isn’t a problem anymore.
Onsite: Easier communication that facilitates effective collaboration and quicker resolution of differences.
- Skills and Expertise:
Offshore: Availability of a wide global talent pool with a diverse range of skill sets and expertise.
Onsite: Need to select from selected resources as the talent pool is restricted within the city.
- Control and Management:
Offshore: Requires meticulously curated project management practices for better alignment and quality.
Onsite: Easier to manage and oversee, providing good control over project progress and team integration.
- Security and Compliance:
Offshore: Most offshore companies now have strict security protocols but better to get details for data security and compliance with laws and regulations. However, it saves the extra money that is otherwise needed to fortify the infrastructure
Onsite: Easy to manage data security and compliance issues locally but it requires investment to have the proper infrastructure for the same.
By carefully understanding and leveraging these crucial aspects and aligning them with your business goals, you can make an informed decision on whether offshore or onsite resources are the best fit for you.
Upshot
Opting between offshore and onsite resources could be particularly tricky in accounting services. The company must decide after evaluating its needs, budget, and objectives. They may even go for a hybrid approach and strike a balance between both.
The most important thing to do is to consistently monitor the resources and gauge their fruitfulness to business.
Want more information on offshore and onsite resources? Book a consultation right now with Intellgus!