Beyond ‘Outsourcing’: Why It’s Time for a New Vocabulary of Work

The word "outsourcing" often comes up in discussions about international hiring. In today's context, it's an outdated and negative term, frequently confused with so-called “cheap labor" and exploitation. The rise of cross-border talent pools, the sophistication of remote collaboration technologies, and the success of remote-first organizations are evidence of a fundamental shift in how businesses access and leverage talent worldwide.

In this new era of international hiring, the global talent pool warrants a better definition. The word “outsourcing” needs to go. Semantics matter, as the vocabulary we use impacts the way we view the strategy of hiring overseas, and the way we may inadvertently treat remote employees who join our businesses from overseas.

The outdated narrative

Outsourcing" has been a contentious term in HR for over fifteen years, with critics often labeling it a "dirty word." Historically, the impression given when an organization mentioned outsourcing was a focus on speed and cost-cutting, often at the expense of quality.

Beyond its negative connotations, the term is also frequently misused. Outsourcing technically refers to engaging a third-party service, like an agency. The more accurate term for directly hiring employees or contracting with individuals overseas is offshoring. Both are applied to global hiring in general, seemingly to undermine the talent involved and criticize an organization's strategic approach to global hiring.

Borderless hiring deserves better. As a strategy, it gives companies agility, opportunity, and access to top talent regardless of their location. Rather than being exploitative, remote work benefits local economies by giving people opportunities that were previously out of their reach. According to a recent paper from Yale’s Department of Economics, “Global remote work is significantly raising wages — by 70% to 221% — in regions where workers previously had relatively limited access to well-paying opportunities, reshaping wage structures and creating a more level playing field across borders."

The robustness of global hiring

A few years ago, in 2022, Blackrock CEO and Chairman Larry Fink stated that the war in Ukraine had disrupted three decades of globalization progress. He posited that the international relations that barely made it through the pandemic would not survive this new disruption. The expected impact that would have on the world of work was that companies would become increasingly insular, leading to a slowing down of borderless hiring and a preference for local talent.

On one hand, he was right: globally, we've seen a wave of nationalism applied to sectors like energy, agriculture, and manufacturing to offset growing supply chain vulnerabilities. This drive for national self-reliance, especially after recent global shocks, is a significant trend. As Ben Chu, an economics journalist and author of the new book Exile Economics, explains, nations are increasingly trying to be more self-sufficient, stepping back from global cooperation and interdependence. He argues this pursuit of insularity in key sectors like manufacturing and energy aims to boost national security.

However, while many large industries are indeed becoming more 'insular,' a powerful counter-trend is emerging in the world of work. Thanks to the internet, a vibrant new wave of global talent is thriving across different markets, directly challenging this move towards isolation and redefining how we think about work. The trend toward remote work has democratized access to incredible talent, regardless of locatio, and vice versa.

New HR tools have emerged in recent years, making global hiring more seamless, efficient, and cost-effective. As a result, companies are realizing that good talent is good talent, no matter where they find it. They're hiring, not outsourcing. Ultimately, this phenomenon gives anyone, regardless of where they were born or live, a real chance to work for whoever they want.

Strategic advantages

The endurance of borderless hiring in a time of global uncertainty is due to its many strategic advantages. Rather than being a way to exploit ‘cheap labor,’ organizations can optimize talent acquisition spend while recruiting the best talent to meet their business needs. Instead of seeking the lowest hourly rate, smart organizations leverage global markets to access highly skilled professionals whose competitive salary expectations, relative to their local economies, offer exceptional value. This isn't about undervaluing talent; it's about recognizing that a top-tier engineer or designer in one country might command a different, yet still generous, salary than their counterpart in a high-cost hub.

Beyond that, global hiring offers companies the benefits that come with having a diverse team. Cultural insights, language capabilities, and market understanding are vital for any organization looking to expand into new regions. Diversity of thought is a breeding ground for innovation and leads to greater creativity and problem-solving.

For companies such as Deel, there’s the added benefit of being in an environment that operates across time zones. We’re “always on”, which means we’re able to offer our employees and partners 24-hour IT coverage.

The tech behind the transformation

Evidence of this transformation is everywhere, and our data consistently shows an appetite for international hiring. At Deel, we process hundreds of thousands of employment contracts annually for over 1.25 million workers in more than 150 countries. We can put this down to shifting cultural attitudes towards remote work, such as the increase in work-life balance reported by thousands after the pandemic, but also to the new solutions that are emerging to make global hiring more accessible than ever before.

Thanks to the rise of services like Deel EOR, companies are able to build their teams with talented overseas professionals without the need for employee relocation or entity setup. EORs also shoulder the legal responsibilities, which our research shows to be a considerable blocker to borderless hiring.

See how Bitpanda expanded from 3 office hubs to 20+ jurisdictions with Deel EOR.

So behind the scenes, the EOR makes it possible for a company to hire any employee they desire. The day-to-day of that employee will feel largely the same as if they were working remotely for a company in their own country. They are, for all intents and purposes, a part of the team with their workload, working hours, and benefits decided by the employer, not the EOR.

The undeniable future of work

If the future of work is more distributed, shouldn't we decentralize our approach and encourage global hiring? Instead of concentrating power at headquarters, with in-person time and meetings in a specific time zone, executives need to redefine their HR strategies to be more global, flexible, and inclusive.

The invitation is to set aside the pejorative outsourcing labor and start using the correct terms, because we're talking about hiring talent. And maybe in the not-too-distant future, "remote work" will simply be "work." We can't undervalue a cross-border workforce in the race for great talent.

Whether it's remote, hybrid, or in-person, no one should feel less or have a different work experience just because they're not within a 25-kilometer radius of an office. Talent is everywhere; unfortunately, opportunities aren't. But they can be—it's a matter of changing our language and our mindset.

So, what comes next for business leaders who are ready to embrace the future of borderless hiring? I’d like to leave you with some further food for thought:

And finally, I’d like to invite you to book a 30-minute Deel demo. If you’re interested in learning more about borderless hiring, there’s nowhere better to begin than right here.