Outsourcing history

We have already had a review of such business mechanism as outsourcing, but today we want to talk about its evolution and why it became so popular within a decade.

Growth of Internet connection speed and global Internet coverage, brought to business life new tendencies such as WFH (Work from home) and later evolved to outsourcing. First, people realized that IT specialists, who work with the computers only don’t really need to come to office – they can work at home or from any other place in the world where they have a computer.

WFH tendency became so popular that created a new wave of downshifters – people who left big cities and moved to more comfortable places for leaving, preserving their jobs and salaries. In the mid of 2000th lots of IT specialists were leaving their crowded cities and moved to some other countries where they could afford renting a house near the beach and live the life like they want at the price they previously spent on gas monthly getting to their offices.

With time, managers realized, that they can not only let their employees move to other countries, but work with the specialists from other countries, saving money, as the average salary there is usually much lower than in US.

Basically, you can hire 3 or even 4 specialists who live and work in another country and cover it with one salary of a US specialist. In addition, they didn’t have to care about taxes, medical insurances and so on. At the same time, you don’t lose the quality of jobs done, since the qualification of the personnel stays on the same level, or you can get even more qualified specialists for the salary you wouldn’t have to pay to local intern.

At this moment, lots of US companies decided to outsource their contact centers somewhere abroad – since the company budget could not cover the necessary amount of local employees plus paying the rent for the office and covering other associated expenses.

The growth of the market resulted in new companies that provided such services on a turnkey basis. The company’s’ HR department doesn’t need to spend days searching for the right candidates abroad, they just contact the outsource company that offered them their specialist according to the required need and qualification.

IT business became one of the business venues that benefited the most from outsourcing. IT industry itself started to grow enormously which resulted in higher salaries in the sphere and the lack of high-qualified specialists that companies could afford to hire. Lots of projects might have been closed and never implemented as they would require lots of time and investments that the companies could not afford since hiring a necessary team of specialists would be extremely expensive. An option to hire the necessary team of highly qualified specialists at the price of one manager brought the second life to the industry. Modern technologies allow working with an oversea team as if colleagues are sitting in the room, next to you or even build a nonstop 24- hour working process with international team, since while in one country it’s evening and the business day is almost over, for the other part of the team it’s morning. This allows IT companies not only to save money but also to speed up the process.

Here, in HitechServicewe have years of experience providing outsourcing and outstaffing services, closely working with European and US teams either on big projects or small tasks on the daily basis. If you are searching for a reliable outsource partner, contact us and find out how your company could benefit from outsource. If you find outsourcing interesting and think to benefit from it one day, come back to our website regularly, as we will continue to overview merits and demerits of this business model in our future articles.