When it comes to the idea of offshoring, there are generally two schools of thought. Some argue that the supply of offshore talent is nearly limitless, while others point to signs of limited supply already forcing wage increases, according to the McKinsey & Company: The Emerging Global Market Report. More and more companies are starting to realize that many service related functions can be completed remotely, which opens doors to potential talent all over the world. There is a growing trend toward offshoring amongst many multinational companies in developed economies, but there still exists a gap in the number of accounting and finance jobs they plan to move to a remote location, according to McKinsey & Company. There are a few major factors as to why companies are still choosing to stay local.

Only a fraction of potential foreign accounting and finance candidates, outside of the U.S., could successfully work at a multinational company. According to the McKinsey & Company report, 87% of potential job candidates in degree specific occupations are unsuitable for their own profession. Lack of necessary language skills, low quality of their educational system combined with lack of practical skills, and lack of a cultural fit are cited as the main reasons in which many multinational companies are finding it difficult to make their service departments international. Another main reason developed companies are thinking twice is that many of these candidates, who are university graduates and are deemed suitable, do not live in and are unwilling to relocate to major cities with access to international airline connections, which is key criteria for many multinational companies.

The pool of available talent is huge, but top talent is hard to find anywhere. Possibly the main hindrance for developed companies taking their business to remote locations is the competition with already established local companies. Much of the top talent with specific university degrees opt to work for an established company in their home country. There is no language barrier, the culture is what they have always known and there is no worry of job security. Losing the top talent tier to these companies also diminishes the availability to successful middle-management which is key to the success of any offshore venture.

Mapping demand for offshore talent against potential suitable supply shows that this market is clearly not smooth, and with companies jumping into the pool so fast there has been an increase in wages and higher turnover which have been counter-productive.

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