5 Best Countries for Outsourcing in 2023

The 5 top places to outsource to in 2023 include tried-and-true solutions and some new regions, each with its own pros and cons.

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5 Best Countries for Outsourcing in 2023.

Here's what you need to know:

  • The best country for outsourcing IT and software jobs is Poland, and the best country for outsourcing manufacturing is China
  • The best country for outsourcing HR and compliance is the U.S.
  • The top country for outsourcing customer support is Mexico, and the top country for outsourcing marketing tasks is the Philippines

Outsourcing is nothing new — but with sluggish supply chains, many companies are looking to reassess where they outsource specific operational tasks. From IT development and manufacturing to digital marketing and HR compliance, there are dozens of countries and firms to choose from.

So, where do you start?

In a recent survey of 65 companies, we found that the most popular choice is the Philippines, with 1 in 4 respondents hiring Filipino talent.

But depending on your industry, outsourcing needs, and budget, another solution may work for you. Let’s take a look at the overall state of outsourcing in 2023 before we look at the top 5 countries for outsourcing in 2023.

What is the state of outsourcing for companies in 2023?

Despite significant supply chain bottlenecks during international lockdowns, the demand for outsourcing continued to grow. From outsourcing services locally to hiring international remote workers, manufacturers, and other talent, most industries are finding their competitive edge through cost-effective outsourcing partners.

Take the biopharmaceutical industry. In one study, 86% of companies said they outsourced manufacturing tasks, including testing, analysis, compliance, and plant maintenance.

Meanwhile, an Accelerance report on IT outsourcing found that 60% of organizations outsourced their software development. The same report also highlighted that enterprise-level, offshore partners are likely to be the “sweet spot’ for most organizations when it comes to both quality and cost.

But as geopolitical conflicts heat up, it’s essential to consider where you hire.

In Eastern Europe, the Ukrainian-Russian war could cause instability, although there are many resources for hiring Ukrainian service providers. Balkan and Eastern European states have long emphasized STEM and English fluency, ensuring high-quality work and communication.

Latin America offers several qualified talent pools and manufacturing centers that work alongside similar U.S. time zones, making communication simple.

In South and Southeast Asia, the Philippines and Vietnam are rising to prominence as more and more of the population speak English fluently and can deliver high-end services.

So, what is the best country to outsource to? Well, it depends on what you need.

What are the 5 best countries for outsourcing in 2023?

1. Best country for outsourcing IT and software: Poland

IT and software may be one of the most challenging areas to outsource, if only because there are so many options. Over the years, India, China, Ukraine, and Argentina have all been popular countries to find software developers inexpensively, especially for startups and small businesses.

Yet more and more companies are tapping into Poland for high-quality, affordable talent. While Polish developers may work for more than professionals in South America and South Asia, they also bring high-quality communication and development skills. You may also find professionals proficient in additional specialties, such as finance or regulation.

“Polish outsourcing companies abide by stringent GDPR and other EU privacy and data security regulations,” says Tom Miller, CMO of FitnessVolt. “Your software development project, customer data, and other corporate data can all be kept safe thanks to these safety laws.”

Some alternatives to Poland are Japan, the Czech Republic, Croatia, Albania, Bosnia, and Serbia.

2. Best country for outsourcing manufacturing: China

When it comes to manufacturing, the country with the highest growth and best track record in January 2022 was China. India, Turkey, and Thailand followed suit.

In 2019, manufacturing accounted for 30% of its total economic output, and despite the pandemic and supply chain delays, it continues to be a key manufacturer for many businesses.

“In China, manufacturing and labor costs are unbeatable,” says Riz Nwosu of Cyberbrands, LLC. “They have as good enough, if not better, manufacturing technology than the U.S. but at a fraction of the price. The difficulty is finding a trustworthy manufacturer that adheres to the high quality and standards that U.S. customers demand.”

However, there are some drawbacks to manufacturing in China. For example, the lack of proficient English speakers in China may cause communication gaps. Currently, less than 1% of the population is conversational.

In addition, local regulations are complex, and depending on your setup, it’s likely you will need help navigating the compliance landscape.

And while China has its own set of regulations, intellectual property (IP) laws often aren’t a priority for law enforcement. Working with a reputable and reliable manufacturer is critical to success.

3. Best country for outsourcing HR and compliance: U.S.

For businesses located entirely in the United States, with no need to register abroad, it’s often best to keep HR and compliance within the country — even if you outsource some tasks.

Having a local firm on the ground that can keep up with regulation changes, speak with employees, and work with the team, even remotely, is still a plus.

4. Best country for outsourcing customer support: Mexico

Mexico remains one of the most popular countries for outsourcing any task that might directly affect the customer, such as customer support or marketing — although you can also find skilled professionals and firms across other industries.

And there are many good reasons that Mexico continues to attract U.S. businesses. Not only is the country located in a similar time zone, but its highly skilled professionals are also cost-effective.

Mexico remains one of the most popular countries for outsourcing any task that might directly affect the customer, such as customer support or marketing.

And given the proximity of the 2 nations, outsourcing relationships are much easier to navigate and manage.

“We outsource to Mexico. That’s because it has a similar time zone to America. So we don’t have to worry about working at weird hours,” says Perry Zheng, CEO, and Founder of Cashflow Marketplace. “It also saves us a ton of money.”

Some alternatives to Mexico are Argentina, Uruguay, and Brazil.

5. Best country for outsourcing marketing: Philippines

One of the most popular destinations for outsourcing work is the Philippines — and for good reason. Not only is the country cost-effective, but it’s the 3rd-largest English-speaking country in the world, making communication a cinch.

In fact, recruiting from the Philippines is standard across industries, not just for marketing tasks. IT, manufacturing, and customer support are all options.

“The Philippines is one of the best countries to outsource work to, not only in terms of cost but because Filipinos are very hardworking and trustworthy,” says Clint Proctor, Editor in Chief at Investor Junkie.

Alternatives to working with Filipino professionals are hiring from India, Pakistan, Malaysia, Nigeria, and Bangladesh.

Key considerations to keep in mind before you outsource

Reduced labor costs are one of the key reasons businesses choose global outsourcing. But it shouldn’t be your only reason.

Choosing “cheap” instead of compliant or effective services and products can result in a disaster for your organization and your customers. That said, there are plenty of highly effective, talented professionals and potential partners abroad.

When looking to outsource, it’s essential to consider several key items:

  • The specific skill set your company needs and your contractor’s expertise
  • Government laws and regulations
  • Language and cultural differences
  • Communication and project management limitations or special considerations
  • Protection of IP and proprietary information
  • Sending and storing sensitive customer or employee information
What’s your biggest 2022 HR challenge that you’d like to resolve

Answer to see the results

What to know before hiring independent contractors

Whether you hire an outsourcing company or a contractor, it helps to have a streamlined checklist to navigate hiring and onboarding. This holds true no matter where your hires are. From Arizona to Zimbabwe, it’s essential to get the paperwork and logistics right.

For more tips, check out our guide to hiring independent contractors and freelancers. We go over everything you need to know about bringing in a 3rd party, from worker classification to security measures.

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