Offshoring and Outsourcing – What Exactly is the Difference?

One of the most common questions we get asked here at GBSS is always “what is the difference between offshoring and outsourcing”? It can be very confusing if you’ve never looked into either of these resourcing models before, but we assure you, there are some very distinct differences.

Before we get started, it might be worth mentioning that both of these resourcing models do share one common trait – they both tap into a highly skilled offshore workforce and both allow your business to access this talent at a fraction of the cost of hiring locally.

It is no secret that Australian labour rates are incredibly prohibitive, especially for SMEs, and by accessing these offshore labour markets, you can access services or recruit team members cost-effectively.

So, if both recruitment models entail utilising offshore talent, what exactly is the difference, then?

Understanding the two models

It’s probably useful to define what each model entails and then dive deeper into the differences these models have from each other.

Outsourcing – By outsourcing, your business identifies certain tasks and then sending these tasks offshore to an ‘outsourcing’ provider. That provider then allocates your task to a team member within ‘their business’ who completes the task for you. Once the work is completed, it is then sent back to you, hopefully correctly.

Offshoring – If your business adopts an offshore model of resourcing, you are identifying a role within your business that is more cost-effectively performed offshore. The word that differentiates both models is ‘role’ and not ‘task’. This model entails identifying an offshoring provider, like GBSS, who will then work with you to identify a full-time team member who will be recruited, onboarded, trained, and allocated to your business entirely. They become a full-time team member for your business, working exclusively for it, but they’re based offshore (in the Philippines, for example).

What’s the key takeaway here? Outsourcing is sending individual ‘tasks’ offshore to be completed, whereby offshoring entails hiring a full-time team member that works exclusively for your business.

Here at GBSS, we’re major advocates of the ‘offshore’ model, and there are numerous reasons why.

Firstly, we want to work with Australian businesses and connect them with talent that will assist them in growing, thriving, and succeeding. Offshoring helps businesses achieve this because it allows them to recruit team members, they would not be able to afford in Australia – team members that can help them with administrative, marketing, and process-oriented functions.

When a new client approaches us to find the talent in the Philippines, we’ll take the time to understand their business closely, what their goals and long-term financial objectives are. After we take a good look at their operations, we’ll work with them to understand what roles they could potentially offshore to the Philippines.

From there, we’ll develop a position description, pull together a talent pool, shortlist, interview, hire, onboard, and importantly, provide on-going support to the client as they embed the team member into the business.

See the difference there? Offshoring is focused on bolstering your business with a long-term and committed team member that, over time, will understand your business and perform their job in line with your expectations.

On the other hand, outsourcing is transactional – send a task to business, task allocated to a team member, task completed and sent back. Rinse and then repeat.

Yes, offshoring might be more of a long-term and involved commitment, but the result is a value-adding employee that works exclusively for your business at a fraction of the cost!

What type of roles can I offshore?

Again, one of the most common questions we are asked, and the answer – anything! The talent pool in the Philippines is incredibly, and we’ve connected Australian businesses with digital marketers, website developers, accountants, conveyancers, quantity surveyors, payroll clerks, and draftsmen.

The best thing is that the Philippines has a huge graduate pool of highly literate candidates that we can connect you with – all at 50% less of a cost to your business than recruiting locally.

I think I’m ready to offshore – what next?

If you think you’re ready to offshore and want to learn more about how it can accelerate your business, get in touch with us today!


Related Posts