Why Outsourcing Doesn’t Mean Offshoring

There’s been interesting discussions in Australia and the US via the various forums, about businesses outsourcing offshore versus inside their own shores. It is often important to do business with people who know how business is done in one’s own country, and all that entails with respect to legalities, taxes, IP, and so on for many of the services provided. Not all, but many.

A recent Australian article about what has happened to one bank in Canada due to their decision to offshore some of their workers. Read about the issues they were facing – scary! There are significant short term benefits to offshoring if cost is your only issue, however consider the dent in the economy with lost taxes, loss of jobs, legal ramifications that may be implied if Visa 475 is abused and the lack of control over your information or your client’s information.

If you are an Australian based business and you are working with a team that is in different countries, what information is being sent where relating to your clients? And do your clients know this? The reality is that technology is now global in many cases – our hosting, backup services and even software programs are in the cloud. But what about who is actually working on the documentation, databases, bookkeeping, etc? And who has access to what? Are there the same concerns in other countries relating to this?

This article talks about what we can learn from India and what they are doing. It also raises about the changes happening here in Australia and involvement from our government. The jobs we are losing offshore, and the opportunities we are failing to capitalise on, are hardly low-value: IT, finance, administration, business, law. These services currently employ almost 80% of our workforce, but 20,000 such jobs leave our shores each year for foreign competitors. Up to 1 million will be lost in the coming three decades from fellow Australians. In Australia, where figures show there were 107,510 temporary foreign worker visa-holders in Australia at the end of February this year; though that figure is up over 20 per cent from the same time last year – read on more about the backlash happening.

I agree that there is room for off-shoring some services occassionally but find comments that they couldn’t find anyone here in Australia difficult to comprehend, or that they’re a brand new business and can’t afford to pay Australian rates. All of us have been brand new in our businesses at some stage and have had to engage support here in Australia to help us get things going. I’m sure this is the same for those in other countries. I whilst starting up your business, weren’t you happy to receive that local client to get you started. So next time you need to outsource your administration or marketing, consider hiring a local VA to protect your information and keep Australia going.