Partner-shoring: A smart way to minimise the impact of the Budget

More than anything, companies should be considering how they can achieve a better balance in their workforce. UK-based businesses will always need to have employees in this country, especially those who are in customer-facing roles. However, when it comes to other positions, such as software engineers, it’s even more important to take a carefully considered view on where to base them.

Near-shoring – or, partner-shoring, where a client and near-shore partner work closely together as a single team to achieve common goals – is a solution that can not only help to keep costs down, but also reduce your risks and increase flexibility when it comes to resourcing.

It’s not just about the money…

One of the most obvious and immediate benefits of partner-shoring is financial, which can be a huge upside, especially when a lot of businesses are just beginning to emerge from some challenging years.

What’s more, partner-shoring can offer a greater degree of certainty, where your labour costs are fully known. Any company that has just hired a lot of UK-based employees will now be reeling from the shock of the Budget, as few anticipated the NI hike, or for it to be quite so extreme. And, of course, there’s no certainty that the costs to employers will stop there – there may well be further increases in taxation to come.

By partner-shoring, it’s possible to agree costs in advance and only pay for the work that is produced for you – so, for example, not having to cover people’s sick leave or parental leave which can often be an unknown quantity.

Having clarity on costs in this way makes it a lot easier for companies to plan ahead, particularly in these uncertain times when a wide range of external factors beyond mere NI rises – such as volatile market conditions – can create significant challenges for businesses.

Added to this is the enormous benefit of flexibility. The ability to scale up and down relatively painlessly is a valuable attribute for many businesses, and having a near-shore partner allows you to do this seamlessly, while the responsibility of employee protections remain the concern of the business you’re partnering with.

Acting responsibly for maximum value

That said, it’s important to emphasise that outsourcing some of your company’s labour requirements shouldn’t mean acting irresponsibly or turning to an unethical supplier that exploits its workforce.

In the outsourcing sector, there are undoubtedly bad actors in relatively deregulated markets who will underpay their employees and offer them few, if any, benefits in order to keep costs as low as possible.

In my experience, there is no value in this for anyone involved. Companies that do not invest in their workforce will earn very little loyalty from their employees. This can lead to not only lower productivity and poor outputs, but also high attrition rates that result in large amounts of key knowledge being lost on a regular basis.

On the other hand, near-shore firms that invest in their people and constantly work hard to ensure they have good employee experiences will always deliver fewer risks and greater benefits – and therefore greater value – to their clients. And that’s exactly what we believe in, here at Damilah. We invest heavily in training to ensure we enable our people to reach their full potential, as well as offering an attractive benefits package. By doing this, our employees pay us back many, many times – and our clients also reap the rewards of this.

In particular, we are proud that our annual staff turnover rate is just 2%. This saves on the expense of recruitment and onboarding (thus helping to keep costs lower for our clients), ensures that essential knowledge and experience remains within the company and is there for our clients’ benefit, and increases the quality, consistency and speed of our outputs.

Look before you leap

One final point to make is that, although the severity of the measures regarding NI may have come as a shock to many, you should avoid making a knee-jerk reaction.

It may be tempting, for example, to immediately cut your UK workforce or instantly put a freeze on recruitment, and transfer as many roles as possible overseas. While this may ultimately be the wisest course of action for certain businesses, it’s important to take a considered approach to finding the optimum balance in your workforce, rather than immediately jumping to the first solution that springs to mind. It’s also worth taking the time to find the right partner to work with.

Here, the benefit of experience and expertise can really pay dividends and help you to deliver the value for money and flexibility your company requires.

At Damilah, we have decades of experience that we are happy to share, as well as a team of highly skilled and motivated near-shore employees who partner effectively with our clients to deliver outstanding outcomes.

To find out more about how you can minimise the impacts of the Budget on your business, get in touch now to discuss our range of services.

Iain Bishop, founder and CEO, Damilah