The advantages of ‘nearshoring’ over ‘offshoring’

David Corcoran, Enterprise Ireland

David Corcoran is Global Outsourcing Advisor for Enterprise Ireland, based in London. Enterprise Ireland is the Irish Government organisation responsible for the development and growth of Irish enterprises in world markets.

In the war for talent and skills, Ireland’s position as a multilingual hub within the Eurozone, is proving very attractive for UK organisations who are seeking to outsource their services closer to home. In advance of Britain’s exit from the European Union, companies have looked to their closest neighbour, who will sit as the only native English-speaking country in the EU, to help provide their services across Europe and further afield.

Internationally there has been a shift by organisations away from the traditional offshoring model for services, towards a nearshoring approach. Service providers across Asia and the Middle East had previously secured contracts with many established British organisations, however, concerns across a variety of areas, including poor communications, differences in work practices and culture, and increased costs has led to the rise of the nearshoring model.

Over 6,000 jobs are currently supported by outsourcing contracts between Ireland and the UK, with Irish service companies providing talent on tap and a skills injection to UK companies. Ireland has historically been viewed as an internationally hub for providing BPO services since the 1980’s and have a competitive advantage in offering stable, innovative, and flexible services to world class organisations. Irish services providers have built up this reputation, by providing services firstly to large cluster of international organisations who have moved their EMEA and global headquarters to Ireland. Citibank, Dell, Facebook, Google, HP, Microsoft, and PayPal are a selection of organisations, who are all based in Ireland, and while some have relocated their customer service teams, many have sought out indigenous Irish service providers such as Abtran, Arise, Eishtec, SalesSense, and RigneyDolphin.

Ireland’s competitive employee salaries and excellent work life balance has led to the country attracting the best talent from across Europe. With the addition of these employees, to an already young, well educated, and progressive workforce, Ireland has developed itself into a leading country in the outsourcing industry. As partnerships with multinationals developed domestically, Irish providers began to grow with these organisations internationally, and have now developed their own new customer bases across the UK, in industries including financial services, pharmaceuticals, telecommunications, and utilities.

For UK companies, the benefits of adopting a nearshoring model with an Irish provider is clear. Proximity is key, and sitting within the time zone and retaining the same business hours ensures any issues can be resolved in real-time without delay, and crucially without the hindrance of communication and culture issues between staff on both sides of the partnership. With a multitude of travel options, an hour commute is possible and allows for regular in-person meetings to be arranged at short notice, and training to be provided regularly to counterparts, to ensure a trusted relationship is built up. This has helped to ensure that the culture of a UK organisation is being reflected by Irish providers, and to their end users, service providers are seamlessly considered to be an extension of the UK organisation.

While multilingual skills, industry experienced talent, and proximity have been key factors for the recent shift of British companies moving their outsourcing needs to Ireland from offshoring regions, the principal competitive challenge in the outsourcing market revolves around the need for flexibility and speed in implementing customized client solutions. Irish companies have put the ‘customer journey’ at the centre of their technology solutions, with Irish SMEs recently noted among the most innovative in Europe by the European Commission. This customer-first focus has led to the creation of industry leading omnichannel capabilities and solutions to ensure UK organisations can secure an ‘Irish advantage’ in broadening and deepening their customer engagement, and is one of the prime reasons why UK companies are looking across the Irish Sea for their outsourcing needs.