Driving Business Growth in APAC with Offshoring Strategies

As the world navigates the post-pandemic era, even the most robust companies face unprecedented hurdles in their quest to grow and expand into uncharted markets. And navigating the increasing economic uncertainty requires flexibility and bold strategies. As mentioned earlier, offshoring is one solution that can help your company navigate the choppy waters while maintaining a competitive advantage and accelerating growth.

It's important to be clear about what we mean by "offshoring." In simple terms, it's the relocation of activities of certain business processes from one's own location to another market. Such a strategy may involve hiring and managing talent to support operations, leveraging the resources, expertise, skills and cost efficiencies of that market.

To get a better idea of how companies are thinking about offshoring strategies, our latest Workforce Insights Report, conducted by YouGov, asked 1,326 companies in 12 markets in APAC for their thoughts. I'll share some of the highlights of the report in this article.

Stronger Support for Offshoring Strategies

Overall, the feedback from our respondents was extremely positive, with 84% of employers supporting offshoring strategies or having already implemented them. This enthusiastic response indicates that the vast majority of companies appreciate the benefits of offshoring, with the highest adoption rates in Vietnam (46%), South Korea (43%), Thailand (39%), India (36%) and New Zealand (36%).

Why are companies interested in offshoring strategies? The main reason is the positive impact on their business. Responses to our survey confirmed this, with 80% of employers agreeing that offshoring overall helps meet their talent needs and provides other benefits to their business.

Meanwhile, momentum continues to build, with many companies planning to implement an offshoring solution soon. Significantly, 44% of respondents from India said that while they do not currently have an offshoring strategy in place, they are actively looking for opportunities to implement offshoring in the future - this was the highest compared to any other market. And even where the HR management is still unsure whether offshoring can meet their talent needs, a significant number believe the strategy is worth considering. This response was highest in Malaysia (36%) and China (32%).

Offshoring is finding great favour across industries

It's fascinating to observe that employers from a variety of industries are attracted to offshoring. Among these industries, information technology companies (IT) are the most inclined (56%) to use offshoring as a means of meeting their workforce needs. Manufacturing (34%) and finance (33%) follow closely behind in adopting offshoring strategies.

Industries actively considering such a strategy to meet their future workforce needs include professional services (40%) and healthcare/life sciences/pharma (38%). Another industry where offshoring strategies are particularly prevalent in logistics and supply chain, where over 30% of employers are already implementing or exploring the plan for their company.

And while the fast-moving consumer goods (FMCG) industry isn't significantly represented in our survey, we should also point out that it's already using or open to exploring offshoring strategies.

Benefits of offshoring

Offshoring brings benefits to a wide range of sectors. According to our survey, the sectors most in favour of this strategy are IT (56%), manufacturing (34%), and finance (33%).

Top reasons why employers choose an offshoring strategy:

1. Larger pool of talent
2. Cost control
3. Advanced technology (which enables remote work)
4. Opportunities to enter new markets

Entering new markets to gain a foothold for future expansion was cited as one of the top three benefits by employers in China (58%), Singapore (57%), Vietnam (52%), Taiwan (50%), South Korea (44%) and Thailand (41%).

It is worth noting that remarkably few respondents across APAC indicate that offshoring is not an option for them. In these cases, the main reasons cited are as follows: Cross-border outsourcing is not currently a priority strategy in their organisation; they believe remote employees are more difficult to manage; they believe the talent pool in their local market is sufficient.

Skills in demand from offshoring

The top three skills most in demand for offshoring talent in the APAC region are IT (44%), R&D (40%), and human resources support (34%). Customer service/call centre and technical support skills are among the top three most sought-after skills in India (41%), Singapore (35%), and New Zealand (30%). Sales/call centre skills top the list in South Korea (31%) and Taiwan (39%), while general administration and operational support skills top the list in Hong Kong (44%), New Zealand (33%) and Australia (30%).

Preferred offshore markets

Singapore, Australia, Malaysia, India and China received the most votes from respondents as preferred offshoring locations. Singapore is popular with companies in China and Hong Kong, most likely because of its stable, business-friendly environment that serves as a springboard for entry into ASEAN countries. According to the Economic Development Board (EDB), 46% of regional headquarters in Asia are located in Singapore, across a wide range of industries.

Getting help with offshoring

Our report shows that 70% of HR decision-makers in APAC would prefer a recruitment agency with a regional presence when pursuing an offshore talent strategy. In addition, companies express a strong need for advice and training on how to optimise offshoring strategies and gain maximum benefit from them. About one-fifth of all employers in APAC say their offshoring would be more effective if they had more professional advice on offshore and local resources.

The services most in demand include labour law and compliance (69%), payroll and tax filing (61%), recruiting and on-boarding (50%), talent development and training (48%), and RPO services (41%). There is also a growing trend in China, India, Malaysia, Singapore and Thailand to adopt RPO services, indicating that companies are more confident in fully outsourcing the end-to-end management of their HR services.

Trusted staffing agencies like PERSOLKELLY with expertise in all these areas can help HR professionals in APAC implement offshoring strategies faster and more efficiently to meet today's business needs.

Write to us at talentssolution@persolkelly.com for more info on how our Regional Talent Solution can help you with offshoring strategy that best suit you.