Back-Office Outsourcing Trends in the USA Today
No country in the world has embraced the concept of back-office outsourcing like the United States. Even despite well-publicized concerns about the impact on the domestic employment market, US companies continue to outsource back-office processes to offshore providers. At the same time, outsourcing to providers in the local market is also on the rise.
As the commercial benefits of outsourcing attain greater awareness and the BPO industry continues to mature, it’s highly likely that more businesses of all sizes will capitalise on the opportunities.
If yours is one of those businesses, you might be interested to know about some of the recent trends affecting back-office outsourcing in the US.
Startups Love to Outsource
Outsourcing in the US was once the preserve of large corporations that could afford to establish lengthy fixed-term contracts with domestic and overseas business process outsourcing providers. That is no longer the case.
Of course, the large enterprises continue to outsource back-office processes, but so do an increasing number of SMEs and startups. Indeed, most small startups are outsourcing today, either by engaging independent virtual assistants and other remote contractors, or VA companies, to meet at least a portion of their human resource needs.
A Shift in Emphasis from Cost to Value
Among those US startups that choose to outsource, only around 27% do so with the express intention to save costs, while the remainder sees back-office outsourcing as an integral component in business development and optimization. These statistics, based on research by IBM, indicate a shift in perception among startups that already outsource or have plans to do so.
That’s not to say that companies cannot save money through back-office outsourcing, especially when they hire offshore virtual assistants based in low-cost countries such as the Philippines.
Instead, the statistics indicate that outsourcing is gaining ground as a strategic practice and that in turn is driving a change in the way that outsourcing providers—especially those that cater to smaller businesses—operate.
For example, virtual assistant management companies now focus less on providing low-cost contractors to pick up repetitive, mundane back-office tasks, and more on helping clients access the broadest range of skills and competencies, along with relevant technological solutions, and providing professional VAs that can integrate into mixed teams of in-house and remote business professionals.
The Rise of the Distributed Back-Office
As indicated at the beginning of this article, virtual assistants and BPO companies in low-cost countries are not the only beneficiaries of US businesses’ propensity for outsourcing.
The trend in outsourcing to domestic providers is strengthening, especially as more and more US professionals choose freelance careers.
A research report by financial software firm Intuit, suggests that by 2020, over 40% of the workforce in the United States will comprise contingent workers. Meanwhile, today’s startups (those that survive) will be tomorrow’s commercial leaders, and many of these are employing distributed resource models, using teams of freelancers instead of a traditional workforce.
It’s conceivable then, that larger companies too will begin to source more (domestic) freelancers to manage and execute their back-office functions-perhaps gradually winding down internal departments or closing them altogether.
Philippines Still a Favorite for US Outsourcing
While some companies in the United States may be looking at the opportunities in domestic outsourcing, the attraction of offshore destinations, the Philippines in particular, seems not to have been diminished by calls from President Trump to bring jobs back home. A full 75% of the $23 billion BPO industry in the Philippines for example, comprises outsourcing firms serving US companies.
For smaller businesses in the USA wishing to embrace the outsourcing trends discussed in this article, the Philippines is still a superb choice for procuring back-office services.
If your company is based in the United States and considering back-office outsourcing as a way to save cost, access a wider variety of professional competencies, or scale without a heavy employment burden, the trends above should prove encouraging. If so, why not talk to Virtual Done Well and see how we can help you?
It is easy to contact us online, so feel free to reach out, and one of our professional VA managers will be glad to assist you with your inquiries.