“Outsourced Offshore” versus “Labour hire Offshore” – Two different tribes

David CarterOutsourcing

outsourced workers outperform

There are a now dozens of new entrants into the Offshore “Labour hire” market, and the more mature “Labour hire” firms overseas are expanding their reach by re-badging or re-naming themselves as “Credible Outsourcing Experts”.

Yes, many of these labour hire firms have the opportunity to push themselves into the market as “Credible offshore experts”, but if they aren’t taking control of the job and responsible for the output, then they aren’t true outsourcing companies.

For accountants, the differentiation might be more easily understood by the old technical question of whether the worker is an “Employee or a Contractor”.

Here are some logical comments to assist with the differentiation between the two tribes, with reference to the “Employee or a Contractor” questions, on how to identify an “Outsourcing expert company” :

  • The supplier is paid for a result achieved
  • The supplier takes the responsibility for the quality of the work
  • The supplier is responsible for meeting the deadline, and using all resources in the suppliers company to meet that deadline
  • The supplier has control over the execution of the work, and freedom to use whatever resources they deem best to complete the work
  • The supplier is responsible for handling human resources, including making sure staff are taken care of uniformly across the company
  • The supplier is responsible for training the employees.

Looking at the employees of an “Outsourced offshore company”, they outperform the “Offshore Labour hire” in many areas, but mainly because an “Outsourced offshore” company focuses on work, while an “Offshore labour hire” company focuses on the provision of a labour force.