Offshoring and Outsourcing: Navigating the Global Talent Pool in 2022 and Beyond

"Outsourcing is the wave of the future, and it has already begun." - Jack Ma, Founder of Alibaba

Offshoring and outsourcing have become increasingly popular strategies for businesses looking to cut costs and access new markets. As the global outsourcing market is expected to reach $300 billion by 2022, according to the National Association of Software and Services Companies (NASSCOM), businesses need to understand the trends and considerations driving this growth.

Popular Offshoring Destinations:

Eastern Europe has emerged as a popular destination for offshoring, with countries like Romania, Poland, and Ukraine becoming hubs for software development and IT services. These countries offer a skilled and cost-effective labor pool, as well as proximity to Western Europe and the United States for easy collaboration and communication. In addition to Eastern Europe, countries like India, China, and the Philippines are also popular destinations for offshoring, particularly in the areas of software development and IT services.

Quality of Resources:

When choosing a destination for outsourcing or offshoring, businesses should consider the quality of the talent pool. According to a survey by Deloitte, 46% of businesses cited this as the most important factor in choosing an outsourcing destination. This includes the level of education and skills of the workforce, as well as the overall business environment and infrastructure.

Pakistan as a New Destination:

Pakistan is starting to gain traction in the outsourcing market, with the country's IT exports growing by 20% in the past year. There are several reasons why Pakistan is an attractive destination for outsourcing:

A vibrant start-up culture and a growing ecosystem for entrepreneurs
New funding opportunities, such as the recent launch of the Airlift incubator for Pakistani start-ups
High quality of education, with a strong focus on STEM subjects
Low employee turnover rates, as many professionals are motivated to stay in the country and contribute to its growth
A large pool of skilled IT professionals, many of whom are experienced senior resources Businesses looking for quality and cost-effective outsourcing solutions should consider Pakistan as a destination.

Increasing Cost of Global Resources:

As the global outsourcing market continues to grow, businesses are facing increasing costs for global resources. There are several reasons why the cost of global resources is rising:

The growing demand for skilled labor in emerging markets leads to higher salaries and benefits
Increased competition for top talent, as businesses compete to attract and retain the best employees
The impact of geopolitical events, such as trade tensions and economic sanctions, can affect the cost of labor and materials
The rising cost of living in many popular outsourcing destinations, as the economies of these countries continue to grow and develop This trend has led to the return of co-located teams to their home countries to cut costs. This trend is expected to continue in the coming years.

Geopolitical Considerations:

Geopolitical events can have a significant impact on outsourcing and offshoring destinations. The ongoing conflict in Ukraine can potentially hurt the country's ability to attract future foreign investment and businesses. However, many businesses continue to work with their existing teams in Ukraine, and the resilience of the people in the face of these challenges is admirable. That being said, logistics have become more difficult as a result of the conflict, and businesses should be aware of the potential impact on their operations.

"Outsourcing is a strategic tool that can help companies access the global talent pool, scale their operations, and drive innovation." - Rishad Tobaccowala, Chief Growth Officer at Publicis Groupe

Offshoring and outsourcing can be powerful strategies for businesses looking to cut costs and access new markets. By considering factors like the quality and cost of resources, cultural fit, and geopolitical events, businesses can choose the right destination for their outsourcing or offshoring needs. Eastern Europe, India, China, and the Philippines are popular destinations, with Pakistan also emerging as a strong choice for its large pool of skilled senior resources. As the cost of global resources continues to rise, businesses may also consider bringing their co-located teams back to their home countries. By staying aware of the trends and considerations driving the global outsourcing market, businesses can make informed decisions that drive