Outsourcing in the USA: The United States are the biggest name in outsourcing in the world no matter whether we talk about outsourcing your work to the US talent pool or US companies outsourcing their work to anywhere else in the world.
But today, we’ll keep out discussion pointed towards outsourcing your work to the US-based agencies or individuals.
In this article, we’ll cover every important aspect of outsourcing in the US along with all types of outsourcing niches like AI, IT, Accounting, HR, and Marketing. So, let’s get straight into it:
Introduction to Outsourcing in the US
The USA is usually famous all around the world as a nation where companies outsource their complex tasks to professionals of other countries. They don’t do this because Americans don’t have knowledge or expertise.
America-based companies are quite intelligent, and they go for countries like India and Philippines where cost of that same work is extremely low, but quality isn’t compromised.
Now, that was one side of America in which it outsources to other countries. But the other side of America is also quite big and still underrated. The US is an extremely big and diverse market in which you can find companies and businesses of every calibre and level you can imagine.
According to authentic research by Mark J. Perry, 7.1 M overseas jobs were done by Americans in 2018. It means that 7.1 M jobs were given to talent pool of the USA and were done by them.
The main motive of that report was to tell people that the USA isn’t only outsourcing its work to other countries and giving other opportunities instead of their own countrymen. People of America are also doing the same by stealing other jobs from around the world.
This is not stealing. It’s just mentality of people because some American businesses want work at less cost. On the other hand, some companies from around the world want the quality of work that is usually associated with the US.
Types of Outsourcing and Outsourcing in the US
America is now so big of an outsourcing industry that its BPO (business process outsourcing) market has an annual market revenue of 128 billion USD in 2023 which is highest in the world. But in the beginning, it wasn’t as great.
At that time, two special types of outsourcing played a great role in the development of the US as an outsourcing nation. So, let’s learn those types of outsourcing that mainly helped American outsourcing market become what it is right now:
Nearshoring means outsourcing your tasks to individuals or firms of countries that are geologically closer to your own country. For example, if companies of countries like Canada, Mexico, and even Brazil go for outsourcing in the US, it will be termed as nearshoring. In the beginning of America’s journey as an outsourcing market, nearshoring helped it a lot to evolve.
The biggest reason why America is arguably the best and the most diverse outsourcing industry is onshoring. When a company outsources its tasks or whole department to a firm or individual of the same country, it is termed as onshoring.
For example, if a company based in Boston wants to hire a person who lives in Seattle and can’t leave the city, the company would go for onshoring. Other than that, onshoring is also preferably used to save the cost the company have to spend on in-house employees.
Benefits of Choosing America as Your Next Outsourcing Destination
You already know about the greatness of the USA as a well-established outsourcing destination, but it would be great to spice it up with more benefits of going to America.
The US is one of the most stable countries in the world with the highest GDP to ever record on this planet. 23.3 trillion USD GDP (gross domestic product) of America alone is enough to show how stable the economy of this nation is.
Still, some people say that GDP per capita is what matters and it’s not as much. But in reality, 70k USD GDP per capita of the US is also one of the best in the world. Politically, there have always been a few protests and stuff every now and then, but it isn’t more than any other stable country.
Huge Talent Pool
America is one of world’s most populated countries with a whopping population of 330 million. This huge population is just a beginning because a stat has proved that 90.3% of Americans (who are older than 25 years old) have at least graduated from the high school. This state is insane because not many countries in the world have this big talent pool.
HR Outsourcing in the US
When you want to outsource your HR department, you should go to a country that speaks the language of your employees.
If common language of your employees is English, no place is better than the US because almost everyone speaks English in America.
Benefits of HR Outsourcing in the US
Having the biggest businesses, colleges and universities in the country is a great advantage. And Americans have it in shape of universities like Harvard. Now, you know why Americans are so good at HR management.
Giants at Work
America was one of those only few countries from 1900s that used human resources as a proper department of any business. So, Americans know how things work in HR management because they are one of the early giants of HR management.
IT Outsourcing in the US
IT and the US have a different kind of relation, and you always go for IT outsourcing in a country where IT is respected and treated as it should be.
Benefits of IT Outsourcing in the US
The market revenue of IT outsourcing industry in the US is estimated to reach 168 billion USD by the end of 2023. And it’s just not it because it is still growing and is expected to reach 279 billion USD by 2028 if it keeps growing at a rate of more than 10% every year (as expected).
Due to the proper infrastructure of the IT industry, you’ll get an ideal environment to run your IT team when you are not with them. The government of America can create a proper system of IT to attract foreigners.
Accounting Outsourcing in the US
While outsourcing any of your accounting tasks, you have to be extra careful because in this case, you are actually dealing with confidential information, and you can’t trust anyone.
Benefits of Accounting Outsourcing in the US
The application outsource market of America is growing at a good rate. The revenue of this small market will be no more than 43.3 billion USD by the end of 2023. Isn’t it great?
Another great trait of American work force is that they know how to deal someone who doesn’t want to get his information leaked. In accounting outsourcing, data protection has always been a top priority.
Marketing Outsourcing in the US
The BPO industry of the US is expected to grow at a rate of more than 3.5%. And if it keeps growing at this rate, nothing will be able to stop it from reaching the market volume of US$152.50bn by 2028.
Benefits of Marketing Outsourcing in the US
According to the report of the Census Bureau, literacy rate of America is 86%. It is a great sign for you because marketing no more life before these days. Marketers need to have a proper degree to serve a company.
Hub of Digital Marketing
Some say digital marketing originated from the US. While others say that Americans are the best in it. In either case, it’s good for you as a service seeker because digital marketing is as important as conventional marketing these days.
AI Outsourcing in the US
AI is arguably the most expensive department to handle these days. No AI expert is ready to work for less money and if you found one, he might not be the actual AI expert you need.
In this case, instead of money, your focus should be quality, which is always there in the USA.
Benefits of AI Outsourcing in the US
AI is Insane Here
The US is one of those few countries where AI is a proper department that plays a vital role in development of the country. People like Elon Musk aren’t letting AI go down in this part of the world. And Chat GPT is the biggest example of that.
America has some of the world’s best institutes that are teaching AI to their students. And just like other departments, a huge number of students from different countries are going to America to study the special courses of AI. It shows that an AI student of America isn’t equal to an AI student of any other country where universities aren’t as great.
Taxes and Americans Outsourcing Industry
Many Businesses fail badly while outsourcing their companies’ tasks to US due to many different reasons. And arguably the biggest reason behind that is lesser knowledge of taxes.
For every country, the system of taxes is different. But when we talk about America, it’s a little more complicated.
Income Tax Rates in the US
Income tax is calculated annually in a certain way:
- For income less than or equal to 10,275 USD, tax will be 10%.
- For annual income between 10,276 and 41,775, tax will be 12%.
- For income between 41,776 and 89,075, tax will be 22%.
- For income between 89,076 and 170,050, tax will be 24%.
- For income between 170,051 and 215,950, tax will be 32%.
- For income between 215,950 and 539,900, tax will be 35%.
- For anything more than 539,900, tax will be 37%.
You must be thinking that it’s quite easy and there’s nothing complex. The real complicated stuff is hidden in-between. Because according to these sections of income tax, it’s not like that if your income is 350,000 USD per year, you will just have to pay a total of 35% tax on that.
Let’s understand it by an example. Let’s suppose you earn 350,000 USD per year. For the first 10,275 USD of your income, tax will be 10% which means that you will pay 1,028 USD on that. After that 10,276 USD will be subtracted from the next amount which is 41,776.
And then 22% income tax will be paid from that remaining amount. And this (kind of) cycle will keep going until you reach 300,000 USD. So, in the end your income tax will be approximately 67k USD.
Why would I choose America if it’s more expensive than my country?
It’s true that America is quite expensive, more than most other countries due to several reasons like stable currency. But wise businesses don’t outsource their work to America for better rates, but they do it for the environment, business structure, and talent pool of America. If that’s not true, tell us why huge companies like Toyota outsource its tasks to the US.
Should I outsource one specific task or a whole department to the US?
It depends on you!
It is you who will decide that because the great infrastructure of America gives you leverage and advantage to decide from different options.
Is there any way to find affordable services in America?
If you have no problem in first training staff and then making them work for you, you can go for interns or students. They are usually the cheapest options in the US. Otherwise, for any business coming from a country with low currency, America is super expensive.
In the end, America has potential to be named as the best outsourcing industry in the end because of a smooth structure of industry it provides.
Along with amazing benefits, just like any other outsourcing destination, there are some challenges like expensive service providing which you should be aware of before entering the world of new technologies.
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