Offshoring back in the frame to grow businesses

More companies may be forced to consider exporting jobs overseas as competition for skilled labour tightens.

Rather than a cost-cutting exercise, Offshoring and outsourcing may be a means of ensuring growth, or at least sustainability, in the face of a predicted tighter labour market in the next 5-10 years, as more baby boomers retire but not enough graduates replace them.

In at least two recent reports, professional services company Deloitte has advocated Offshoring, or outsourcing roles to regional centers, as a strategy to combat skills shortages and free up local staff for more productive work.

"Where they do need workers on the ground and those workers are scarce, perhaps it's an idea to offshore teams for particular aspects and tasks, and they really just need to challenge their thinking around what tasks they want to export and what tasks they want to keep closely held in their own backyard," Jody Burton, an assurance and advisory partner in Deloitte's SA office, said.

Offshoring suffered a stigma among the public because it was seen as "stealing Australian jobs" and even among business which had tried it but decided the quality of work delivered did not meet expectations, she said.

Deloitte's most recent national survey of chief financial officers found 77 per cent of the 85 respondents expected their company to suffer a skills shortage in the coming year and 44 per cent expecting to increase their demand for these harder-to-come-by skills.

"Even so, few CFOs had changed their recruitment patterns or explored more transformational options such as off-shoring non-core business activities to overseas resources," the Batten Down the Hatches report said.

Besides the reputation hazard, Ms Burton suggested this could be because previous attempts had not achieved expected outcomes.

She said the "skills gap" in India had shrunk in recent years.

"Now, I think, over the past three or four years, the level of education over there, the standard of qualifications has increased exponentially.

"I think those that tried it early and were not satisfied by the level of skills are once bitten, twice shy."

Source: adelaidenow