Advantages and Disadvantages of Offshoring

272 Words2 Pages
Offshoring Definition ‘offshoring’ Offshoring is when a company moves part of its activities to another country, to reduce costs and maximize profits. Advantages of offshoring The biggest advantage is of course the lower cost for the companies offshoring the activities to cheaper countries like India, China and Malaysia, which are the top 3 countries for offshoring. The average loan of a Western employee is higher than an offshore employee, while the skill level of the offshore employee is similar or even better. So the companies can save up 30 to 50 percent of their costs. For example, the employees of a Chinese supplier selected by Boeing earned $120 per month compared to $3,530 per month earned by Boeing employees in Seattle. Lower cost, so cheaper services and cheaper products to consumers. This will make the companies more competitive in the global business field. Offshoring also offers a lot of flexibility and efficiency. There’s a lot of work involved in a traditional recruiting process, such as interviews and employee training. By offshoring your activities, you can skip these processes. And on top of that, the governments of those countries will also offer favorable tax rates for the companies. This way companies end up paying little or even no taxes! But offshoring is also beneficial for the receiving country. Offshorers create local jobs and employ local people. So the receiving country benefits economically from the presence of the offshore companies. This will result in more stability of the region as jobs keep people away from criminality. Things become cheaper so that more people can afford things, which will improve lifestyle and
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