Over half of all Aussie businesses will look to offshore suppliers and customers within the next 12 months as costs continue to rise.
New research by Money Transfer Comparison has found that 51 per cent of businesses are likely to source more suppliers and customers overseas within the next 12 months. One-third of businesses have already reduced spending on non-essentials and are making cost-saving adjustments for their businesses.
West Australian businesses are the most likely to source overseas resources and customers or clients in the next 12 months at 68 per cent, the research found. Meanwhile, Queensland businesses are the least likely to make the switch from local to international suppliers and customers or clients (60 per cent).
The survey asked respondents which category Australian businesses would look at sourcing cheaper overseas products and services, with tech-related products and services being most likely, specifically software (38 per cent) and IT hardware (31 per cent).
A number of businesses would also source manufacturing (30 per cent), labour (29 per cent), shipping and logistics (27 per cent), and research (15 per cent) offshore.
The research comes off the back of 85,686 businesses closing their doors permanently between March and June 2023.
“There are a number of benefits to outsourcing, such as saving on labour and supplier costs, entering less competitive markets and increasing a business’s customer base,” said Money Transfer Comparison spokesperson Russell Gous.
“Businesses are proactive in finding solutions to maintain their competitive edge and financial security. Outsourcing could be a short- or long-term solution for businesses mitigating increasing costs, as well as to solve the skills shortage.”
“The data provides a comprehensive picture of how Australian SMEs will lean on offshore outsourcing to mitigate some local challenges. The significant trend points towards the need for outsourcing within the next 12 months, and the preference towards the tech industry reflects Australia’s shortage of skills in this area.”
Utilising offshore resources isn’t limited to suppliers and customers.
In March this year, HR Leader covered how increasingly, managers are utilising offshore talent in a bid to combat talent shortages.
According to Cloudstaff, 55 per cent of Millennial managers and 63 per cent of up-and-coming Gen Z managers recognise that utilising offshore talent is a great way around these issues.
In comparison, just 19 per cent of Baby Boomers agree, showing a clear disconnect between generations.
Chris McDonald, vice-president of growth at Cloudstaff, commented on the findings at the time: “The workforce has changed considerably since Baby Boomers started out in their careers. Australia already relies heavily on overseas workers in the form of migration.”
“In fact, the 2021 Australian census showed that for some professions, such as general accounting, more than half (51 per cent) of the current Australian workforce was born overseas. It’s therefore not surprising that younger leaders are more open to working across borders.”
“The days of people needing to live close to their workplace are over. Smart companies today hire where the talent lives. While the tech industry pioneered that model years ago, COVID-19 ended up being a worldwide training program for every company globally in how to manage remote workforces and work with remote colleagues.”
