Should Offshoring Be Part of Your Business Growth Plan?

As we head into the second half of 2023, the topic of practically every conversation with a client, prospect or colleague remains the same as it’s been all year: Where are all the workers? It’s a question that keeps getting more difficult to answer.

By this stage in the post-pandemic environment, my expectation was that the difficulties that employers experienced over the last couple of years in finding good people would have stabilized. However, the challenges persist and likely will continue for the foreseeable future — and perhaps a lot longer.

Recent data tells part of the story about the state of the US workforce. The June jobs report showed that the unemployment rate remained low at 3.6% while wages increased. At the same time, the annual rate of inflation in June fell to its lowest level in more than two years. So, the strong job market shows no signs of slowing.

The other part of the story is more complicated and likely points to a fundamental shift in how a growing number of people think about work and employment. We’re seeing employees change jobs much more frequently, “quiet quitting” continues and now “loud quitting” has joined the trend, and the “gig” economy remains strong, among other factors. It all adds up to a very different set of preferences and attitudes regarding work and employment among significant segments of the US workforce.

As staffing firms, we face many of the same challenges in finding good talent for our own companies. A solution we implemented in early 2022, offshoring support services for recruitment and operations to a division in India, has proven successful on multiple levels.

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The team in India uses online databases and our own systems, digital tools and technologies, job boards, and more to search for and find candidates for positions in the US. These candidates are then provided to recruiters in the US for follow-up and engagement. As part of the process, the team in India develops all resumes with a consistent format and design, which becomes part of our branding.

Benefits of this offshoring approach include the opportunity to run a 24-hour business based on the time difference and achieve significant cost savings in areas such as compensation and facilities (all employees work remotely). Additionally, by offshoring more routine tasks to our team in India, US-based recruiters can focus more on relationship building and management with customers.

If you’re considering a move to offshoring, be sure to conduct a thorough review and due-diligence process that includes an on-site visit, whether you’re seeking to acquire or partner with a firm or start a group from the ground up like we did. We spent more than a year from the time we decided to move to offshoring to the opening of the division.

Securing in-country legal counsel is another important step, following a similarly thorough vetting process as outlined above. You’ll want to ensure that the legal team in India will work seamlessly with your US-based legal team and US-based accounting firm.

The banking relationship is critical to a successful offshoring operation. Seek a US-based global bank(s) that has proven experience working with offshoring divisions of domestic companies.

The continuously changing and evolving US workforce, competitive pressures, technology advancements and other factors make it essential that staffing firms regularly consider new approaches to growing their business. Potentially offshoring certain jobs and responsibilities is one of the options that’s worth exploring.

Tom Ioele

Tom Ioele
Thomas C. Ioele is chief executive officer of TalentBridge, a staffing, recruiting and talent management company with multiple locations serving clients and candidates throughout the US.

Tom Ioele

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