The Reverse Trend to Offshoring
"
Repatriation of activities […] is the opposite phenomenon to offshoring. It is not particularly unusual for some activities which had been offshored to return to their [home] country. Most often, this occurs when offshoring has not delivered the expected returns to the enterprises concerned, or because the framework of conditions for the offshoring activities has considerably improved in the home country or deteriorated in the country of relocation."
(OECD,
Offshoring and Employment: Trends and Impacts, 2007, visited 2011-07-24)
"In some cases, outsourcing is moving back to domestic markets and many companies are now looking at insourcing' their operations by internalizing operations that were previously contracted out. […]
There are numerous risks and challenges associated with offshoring, which when given sufficient weight, may prompt a move towards retrenchment and insourcing."
(European Monitoring Centre on Change,
Trends and Drivers of Change in the Knowledge-Intensive Business Services Sector: Four Scenarios, visited 20117-07-25)
Transferring back to the Parent Firm, or to a Firm in the Home Country?
From the host country's point of view,
onshoring means developing industrial activities which other countries have offshored to that specific country. But from the home country's point of view,
onshoring either consists of:
- Insourcing or re-insourcing – the transfer of an outsourced function to an internal department of a company. The repatriation of formerly offshored activity to the home country in the parent firm.
- Domestic outsourcing – the replacement of foreign outsourcing by domestic outsourcing, i.e. subcontracting to firms located in the home country.
Onshoring, although it can refer to (re-)insourcing in-house some formerly offshored activity, very often refers to domestic outsourcing.
Rightshoring
Rightshoring, or bestshoring, is a new business trend, a balance between offshoring and
onshoring.
"It consists in "restructuring a company's workforce to find the optimum mix of jobs performed locally and jobs moved to foreign countries.
[…]
‘There is no doubt that customers with complex queries requiring local understanding do not respond well to far-off operators repeating parrot-fashion a series of learned responses. Convergys, one of the world's biggest providers of ‘contact-centre services,' advises companies to shift simple queries offshore while retaining the more complex ones on the same shore as the caller. It calls this process ‘rightshoring,' and estimates that about 80% of the companies that it is working with in Britain are planning to split their call-centre operations in this way.'"
(Relocating the back office,
The Economist, December 13, 2003, visited 2007-04-19)
Farmshoring
Farmshoring is a term used to describe the shifting of employment from abroad into rural home communities. It is a combination of both onshoring and outsourcing.