Why do companies use offshoring?

The businesses use offshoring because: –

• Shortage of skilled employees
  As per research, several American companies say that the shortage of employees with the required skills is one of the primary reasons they offshore some of their business processes. The countries where they offshore have a broad pool of employees in terms of work experience and skills.
• Cost-savings
  It has been estimated that organizations can save up to nearly 80% in cost savings. Direct savings are comprised by the cost differences in salaries, benefits, and operational expenses in the US. Factories offshore their production overseas to obtain lower manufacturing costs, particularly in developing market countries with lower prices in utilities, labor, and in the setting up of manufacturing facilities.
• Efficient quality and process
  Offshoring destinations are efficient in setting up systems that conform to standard procedures and rules. A process that requires large-scale production is useful for the Philippines and other Southeast Asian nations. They are habituated to doing tasks that demand thorough accuracy and precision.
• Time zone coverage
  Organizations can cover time zones not managed by their operations through subsidiaries or offshore service providers in nations offering 24/7 operations. Offshoring destinations such as India have a workforce willing to work outside of usual office hours and in different shifts. For business process offshoring, the local team in the US can turnover unfinished tasks to the offshore team, so there is constant workflow until the project is completed.