What is offshoring?

What is offshoring?

Offshoring simply means engaging staff either directly or through a professional firm such as Felcorp to provide staff from another country working remotely in your business. The offshore staff work in your business, under your instruction to get the jobs done.

The offshore staff function just like a full time employee in your business albeit in another location. They function exactly the same as a remote employee.

Typically, most offshoring is done through Phillipines and India with Sri Lanka and Vietnam rising in this offshore outsourcing space.

All Felcorp offshore staff are located in India with head office in Sydney, Australia.

How does offshoring work?

How offshoring works in general:

Businesses decide to offshore a specific operation of their business either to increase productivity, reduce costs or provide additional resources to an operation to scale it up.

When you engage an offshore provider, they will vet and source the specific staff member  for you and help get the set up going.

The provider will typically purchase all the office equipment and help set up your new employee in an office or work from home arrangement. There is then a basic introduction between you and the staff member. It is then up to you how to delegate and manage the staff.

Businesses will generally engage an offshoring company to provide a team of staff to assist in back office tasks that are repetitive in nature and follow a long process to complete.

Operations that are commonly offshored are:

• Claims and support ticket triaging departments
• Accounting tax and bookkeeping administration
• Administrative support in financial services
• Application processing
• 24/7 Call centres

How Felcorp's service work:

With Felcorp, we take offshoring to the next level with our professionally managed service.

What this means is that we have management layers and years of expertise in your specific industry to provide highly specialised and skilled staff to you. This essentially allows us to provide you immediate value from day 1 as we do not need time for training or set up.

So when we allocate staff to your business, we look after all the training, management, performance metrics so you don't have to worry about managing a new division of staff. We look after all the day to day management and ensure that your workflow goals are strictly adhered to.

Why would I offshore an operation?

There are three key reasons that you would embark down the offshoring route:

1. Staff just isn't available or takes too long to find staff:

Many businesses just can't find staff to fill vacant positions. This put unwanted pressure on existing staff and principles who eventually demand higher wages over time as they are working more hours on average per week.

By offshoring, you have the ability to hire additional offshore staff as there is a larger pool of candidates and are also cheaper than Australian wages. On top of this, offshoring is a more stable and scalable staffing strategy as it much easier to replace staff, scale up operations quickly and develop efficiencies.

2. Make an operation more profitable and competitive:

In competitive markets such as insurance and financial services, many businesses consider a dual onshore/offshore staffing strategy to cover 24/7 shift cycle (call centre operations for example) while also having an overall reduced payroll liability as the offshore staff are much cheaper than Australian wages.

Offshoring gives these businesses the opportunity, flexibility and stability to scale up their operations faster and win larger contracts as they have the workforce behind them.

3. Existing staff issues such as staff turnover, leave entitlements and rising wages:

For smaller businesses that have 5-15 staff on payroll, offshoring is a way to mitigate ongoing staff issues especially with turnover.

A common situation occurs when a skilled member decides to leave you as a larger firm with has offered more money to attract that staff member. This happens unexpectedly and is quite normal in skilled industries such as Insurance, Accounting and Financial Planning.

By offshoring, you can reduce these issues as there are more candidates to replace that lost staff member and you also have the benefit with Felcorp that the management is all taken care of so the you do not have to constantly spend time training new recruits every time someone leaves and comes onboard.

Is offshoring right for me?

When you would offshore

Offshoring only works when you have a plan in place to grow your business faster and more stable then the options already available to you. If your business is facing staffing issues or competitors offering a better service at lower rates, it's time to consider offshoring.

Offshoring works best when you have a specific back office operation that is labour intensive and repetitive. It is then a viable strategy to make that operation more profitable, provide a better service or take on larger contracts through the support of offshore staff.

When you wouldn't offshore

We never recommend offshoring your sales or key customer facing/service roles that uphold your reputation in the market. Offshoring certainly has its wide variety of uses however, you cannot outsource your entire business and we strongly discourage it.

Offshoring is designed to be an alternative risk mitigation tool to your existing Australian staffing strategy or to simply make an operation more profitable and therefore more competitive in the market.