Outsourcing in 2023: 5 Best Countries
Outsourcing in 2023: 5 Best Countries
In 2023, five top outsourcing locations will offer tried-and-true solutions, along with several new regions that offer their own advantages and disadvantages.
Even though outsourcing is not new, many companies are reviewing where they outsource specific functional tasks due to sluggish supply chains. There are dozens of countries and firms to choose from, ranging from IT development and manufacturing to digital marketing and HR compliance.
How do you get started?
The Philippines emerged as the top choice in a recent survey of 65 companies, with 1 in 4 hiring Filipinos.
Depending on your industry, outsourcing needs, and budget, another solution may be more suitable. Looking at the overall state of outsourcing, 2023 will be a good place to start before we outline the top five countries for outsourcing.
What is the state of outsourcing for companies in 2023?
The demand for outsourcing continued to grow despite significant supply chain bottlenecks during international lockdowns. Most industries find their competitive edge through outsourcing services locally or hiring international remote workers, manufacturers, and other talent.
Let’s look at the biopharmaceutical industry. According to one study, 86% of companies outsource manufacturing tasks, including testing, analysis, compliance, and plant maintenance.
According to a report by Accelerance on IT outsourcing, 60% of organizations outsource their software development. When it comes to quality and cost, enterprise-level, offshore partners are likely to be the “sweet spot” for most organizations.
It’s important to consider where to hire as geopolitical conflicts escalate.
Although Ukraine offers many resources for hiring Ukrainian service providers, the Ukrainian-Russian war could cause instability in Eastern Europe. STEM and English proficiency have long been emphasized in Balkan and Eastern European states, ensuring high-quality work and communication.
Several qualified talent pools and manufacturing centers can be found in Latin America, which has similar time zones to the U.S., making communication simple.
Among South and Southeast Asian countries, the Philippines and Vietnam are rising in prominence as more people speak English fluently and can deliver high-quality services.
Which country is the best for outsourcing? The answer depends on your needs.
What are the 5 best countries for outsourcing in 2023?
1. Poland is the best country for outsourcing IT and software
Outsourcing IT and software may prove challenging due to the large number of options available. There are a lot of countries where you can find inexpensive software developers, especially for startups and small businesses, such as India, China, Ukraine, and Argentina.
Despite this, more and more companies are looking to Poland for high-quality, affordable talent. While Polish developers may work for more than South American and South Asian professionals, they also bring high-quality communication and development skills. Professionals may also have additional specialties, such as finance or regulation.
Polish outsourcing companies adhere to strict GDPR and other EU data security regulations. These safety laws ensure the security of your software development project, customer data, and other corporate information.
Among the alternatives to Poland are Japan, the Czech Republic, Croatia, Albania, Bosnia, and Serbia.
2. The best country for outsourcing manufacturing is China
China led the manufacturing world in January 2022 with the highest growth and best track record. It was followed by India, Turkey, and Thailand.
Manufacturing accounted for 30% of the country’s GDP in 2019, and despite the pandemic and supply chain delays, it remains a key manufacturer.
Manufacturing and labor costs in China are unbeatable. Manufacturing technology in China is at least as good as the U.S., if not better. Finding a trusted manufacturer that adheres to the high requirements of U.S. customers is difficult.
Despite the benefits of manufacturing in China, there are some drawbacks as well. Communication gaps may arise in China, for instance, due to a lack of proficient English speakers. Less than 1% of the population is conversational at present.
Moreover, local regulations are complex, and it’s likely you’ll need help navigating them depending on your setup.
Despite China’s own set of regulations, intellectual property laws often don’t get the attention they deserve. It is crucial to work with a reputable and reliable manufacturer to ensure success.
3. Outsourcing HR and compliance is best done in the U.S.
Even if you outsource some tasks, it’s often better to keep HR and compliance in the U.S. for businesses without the requirement to register abroad.
Even remotely, a local firm can keep up with regulatory changes, communicate with employees, and work with the team.
4. Mexico is the best country to outsource customer support to
Outsourcing any task affecting the customer directly, such as customer support or marketing, remains a popular choice in Mexico – although skilled professionals and firms are available across many other industries as well.
Mexico continues to attract U.S. businesses for a number of good reasons. Aside from its similar time zone, the country has highly skilled professionals who are also affordable.
MEXICO REMAINS A POPULAR COUNTRY FOR OUTSOURCING ANY TASK DIRECTLY AFFECTING THE CUSTOMER, INCLUDING CUSTOMER SUPPORT OR MARKETING.
It is much easier to navigate and manage outsourcing relationships between the two nations due to their proximity.
Argentina, Uruguay, and Brazil are some alternatives to Mexico.
5. Philippines is the best country to outsource marketing to
The Philippines is a popular destination for outsourcing work – and for good reason. Besides being cost-effective, the country is also the third-largest English-speaking country in the world, which makes communication easy.
Recruitment from the Philippines is standard across industries, not just marketing. You can choose from IT, manufacturing, and customer support.
According to Clint Proctor, Editor in Chief at Investor Junkie, the Philippines is a great place to outsource work because Filipinos are hardworking and trustworthy.
India, Pakistan, Malaysia, Nigeria, and Bangladesh are alternatives.
Before outsourcing, consider these key factors
Global outsourcing is primarily motivated by reduced labor costs. However, it shouldn’t be your only motivation.
Choosing “cheap” services and products over compliant and effective ones can be disastrous for your company and your customers. The good news is that there are plenty of highly effective, talented professionals and potential partners abroad.
There are several important factors to consider when outsourcing:
- Your company’s specific skill set and your contractor’s expertise
- Regulations and laws issued by the government
- Differences in language and culture
- Limitations or special considerations in communication and project management
- IP and proprietary information protection
- Storing and sending sensitive information about customers or employees
A guide to hiring independent contractors
Hiring a contractor or outsourcing company requires a streamlined checklist to navigate. This applies to all your hires, regardless of where they are located. Getting the paperwork and logistics right is essential, whether you’re in Arizona or Zimbabwe.
In a nutshell:
- Poland is the best country to outsource IT and software jobs, and China is the best country to outsource manufacturing jobs
- The United States is the best country to outsource HR and compliance.
- Mexico is the top country for outsourcing customer support, and the Philippines is the top country for outsourcing marketing tasks
In order to remain competitive, businesses must keep up with the fast-paced outsourcing industry. Your business will be affected by these trends both now and in the future.
What criteria do you employ to choose the perfect outsourcing partner? If you need help in finding the right outsourcing partner, book a FREE APPOINTMENT with Outsource Asia experts today.