Offshore staff augmentation is projected to play a major role in the business landscape going forward. 2024 is on the horizon, and while there has been massive progress in recouping the losses incurred by the business world during the pandemic, much work remains to be done.
Access to skilled labor is among the top issues for businesses heading into 2024, with the national average labor force participation rate sitting at an uninspiring 62.6% as of July 2023, according to the US Chamber of Commerce. Among the industries affected, some are handling things better than others.
The leisure and hospitality industry has managed to retain most of its workforce, with data from the US Chamber of Commerce showing hiring rates outpacing quitting rates, keeping the industry full of skilled professionals. The food and accommodations industries, on the other hand, have been reported to be struggling to retain their workforce, with quite a severe disparity between hiring and quitting rates.
While every industry handles the situation differently, there is no denying that the US, as well as many other developed countries such as Germany, Singapore, and France. According to a survey by DAAD Scholarship, the global average skill shortage percentage has shot up from 35% in 2013 to a staggering 77% in 2023.
These numbers are undeniable symptoms to a growing, festering wound in the current business landscape, leaving businesses bleeding employees and desperate for skilled personnel. Before we can discuss the cure, however, we need to understand the disease and hopefully demonstrate to entrepreneurs all across the globe that offshore staff augmentation is the panacea that will finally heal the business world and return us to the good old days.
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The Problem: Shortage of Skilled Professionals in the Workforce
The problem of a shortage of professionals in the workforce is not as simple as it sounds, and a myriad of different causes contribute to the eventual outcome of a negatively impacted labor force participation rate.
The first of the major issues is that we are economically recovering, with the global business landscape still trying to gain some financial stability following the lockdowns and other pandemic responses. Now, because businesses are still trying to get their footing back and likely burnt away all their saved funds to stay afloat during the pandemic, what most businesses end up with is a very tight budget. This is where the problems originate.
Business owners then look for skilled professionals with far smaller budgets than they used to pre-pandemic. But the problem is that while businesses have lesser budgets, the cost of living remains relatively the same, if not higher, for some of the more qualified professionals, such as CFOs. These professionals, therefore, rightfully demand the wages they need to sustain their lifestyle, which is far out of budget for many small businesses in 2023.
And this is where the labor shortage spawns from. Businesses not financially equipped to hire skilled professionals clash with professionals asking for wages that most businesses can’t afford. This leads to the business going without skilled professionals or hiring subpar talent at affordable rates. The bigger corporations sweep away the skilled talent, but even then, as we saw with the 2023 tech layoffs, tens of thousands of skilled professionals lost their jobs because their companies could not afford them.
The Solution: Offshore Staff Augmentation
Following these layoffs, we then saw Silicon Valley giants like Microsoft and Meta lobbying for more H1-B visas to be given out to offshore professionals to come to work for them. The solution for the bigwigs out there is simply to import skilled professionals from developing countries, but this seems too complex and difficult for small businesses to take advantage of.
Thankfully, they do not need to go that far and can leverage offshore staff augmentation services to onboard affordable remote skilled professionals into their team.
Offshore staff augmentation as a service is very similar to offshore and nearshore outsourcing in that you hire a third-party firm to take up the responsibility for a desired business function, but staff augmentation goes about it differently. As the name suggests, staff augmentation is all about augmenting your staff. This means that when you retain offshore staff augmentation services. Instead of doing the work for you, they connect you to a vetted, skilled professional who you can directly integrate into your team.
Addressing Business Community Concerns
Unlike onshore and nearshore outsourcing, which still ends up being too expensive for many, offshore staff augmentation prices are so drastically more reasonable that it’s a wonder businesses are still struggling with skilled professionals.
We jest, of course. Even knowing that offshore staff augmentation exists as a solution, many small business owners have valid concerns regarding the quality and security of these services. For example, retaining offshore accounting and bookkeeping services from EA may seem like a steal, but who’s to say that the services will be on par with in-house talent? After all, if something is cheaper, it must come at a price, right?
In this case, however, that is not true. The brilliant thing about offshore staff augmentation is that it leverages economic factors such as currency conversion rates to create mutually beneficial business relationships without sacrificing quality or security.
Consider the aforementioned example of EA’s accounting and bookkeeping staff augmentation services. These services are cost-effective because the cost of living for offshore talent is far lower than for onshore talent. While a decent life in the US may cost upwards of $70,000 a year, the same standard may cost 50-60% less in other countries, thanks to exchange rates.
So, the same professional living abroad can afford a comfortable lifestyle at a price that is also affordable for most small businesses.
In this way, offshore staff augmentation effectively counters the skilled professional shortage by creating more job opportunities in the global business landscape and facilitating small businesses with the professional help they require.
Why You Should Consider Offshore Staff Augmentation Services
With all that said, it’s not like being affordable is the only upside to offshore staff augmentation. There are a ton of additional benefits that businesses can avail when opting for offshore staff augmentation.
Side-stepping the Hiring Process
The hiring process is an immense strain on businesses, with the core team expending tons of resources just to onboard one new professional. Hours spent deliberating between candidates that could be spent on business development and money that could be spent on business projects instead of HR management are just one massive resource sink for a professional who may not even stay a year before moving on to greener pastures.
With offshore staff augmentation, this problem becomes non-existent. The whole reason you pay the firm is that they spend the effort to find you a pool of suitable talent for your needs. These firms typically have hundreds of skilled professionals in their databases that they can connect you with. The hiring process can go from a grueling ninety days to just a week, and you have a new accountant or IT programmer on the team. Meanwhile, all that money and time saved can be spent on building up the business.
Flexibility and Expertise
Another major benefit of offshore staff augmentation is the immense flexibility afforded to business owners. If the business experiences a sudden boom in sales and growth and needs additional hands to handle the workload, they can simply call their staff augmentation partner and get a new person on the team the very next day in urgent cases.
In addition to this, flexibility can also be paired with the additional benefit of access to expertise. Typically, experts in any field are hard to come by without much digging and a sizeable wallet. Still, with offshore staff augmentation, even experts become a viable resource for small businesses to leverage.
Accounting and bookkeeping services are excellent examples of how flexibility and expert access can be leveraged together for great returns. Say, for example, that it’s tax season, and your regular remote bookkeeper is not equipped to deal with taxes. With offshore staff augmentation, you can make it so that your contract with your bookkeeper does not extend into the yearly tax season, and in that period of time, the firm will instead connect you to a tax specialist for your state. After tax season, your usual bookkeeper can return as if nothing had changed. This unimaginable flexibility is only possible with offshore staff augmentation services.
Improved Productivity
Yet another unsung benefit of offshore staff augmentation or outsourcing is the productivity boost it can generate. When multiple remote professionals work for you across the globe, it becomes possible to meet tight deadlines and reach previously impossible goals. Plus, because remote work lends itself to autonomy, Apollo Technical reports that remote professionals end up being 47% more productive than in-house equivalents.
Reduced Overhead
Inhouse professionals aren’t the only expensive thing. When you hire in-house, you must also pay for that professional to have office space, access to amenities, stationary, software, and hardware, depending on the job, and much more.
With an offshore remote professional, these costs are factored in and covered by the staff augmentation services provider and end up a fraction of what they would normally be.
Conclusion
Offshore staff augmentation services, simply put, are the perfect cure for the lingering problem of professional shortage. Not only does this method address the core of the problem and provide an ideal solution for both sides, but it also encourages a more globalized, connected business landscape, with people from all walks of life being afforded opportunities they would have never dreamed of being possible.
As always, while we fully approve of offshore staff augmentation as a solution to the labor shortage, we encourage readers to do their own research to ensure that they are not taken advantage of by malicious actors selling snake oil instead of staff augmentation services. As with any contractual work, stay informed, and you will be good to go.