Whatever Happened to Rural-Shoring?

aNewDomain.net–In the last 10 years outsourcing has become a hot business topic.  Lured by the promise of cost savings, companies outsource services like customer service, programming and manufacturing offshore.

And rural shoring is the all-American reaction to this.

Rural shoring goes by a couple different names.  Sometimes it is referred to as “rural sourcing” or “farmshoring.” No matter the name, the concept is the same. Jobs that have been outsourced can now be done within the United States — but with a twist. Instead of focusing on large metros, rural shoring jobs are created in less populated areas like Kearney, NE and Carbondale, IL.

Image credit: Wikimedia Commons

The cost of living outside major metro areas is lower allowing jobs to cost less while giving the worker the same quality of life as his or her metro-based equivalent. For example, according to Computerworld, a quality assurance leader in Atlanta would cost $35K more than the same position would in rural Nebraska. The savings are even more for companies when you compare them to expensive cities like New York, San Francisco or Los Angeles.

One example of a company leading the rural shoring segment is WaveCreste.  WaveCreste is a young company that prides itself on its unique Rural Sourcing service delivery model. WaveCreste’s CEO Chris Burton says that the kind of companies that work well with WaveCreste are those that need a quick turnaround for complex projects and those tasks that require a more localized solution.  Wavecreste had seen cultural and timezone differences as two reasons off shoring doesn’t work for a lot of companies.

Another company that has focused on rural shoring services is Rural America OnShore Outsourcing located in Two Rivers, Wisconsin.  Rural America claims cost savings of 25-40 percent over normal project costs. It also claims that after factoring in the hidden costs from communication, travel expenses, and quality control for outsourced work, its costs are the same as outsourcing.  Rural America says it hires from a pool of 9,000 workers who chose to live in the rural parts of the country.

Despite the growth and success of rural shoring, it doesn’t appear that farmshoring will be changing the trajectory of outsourcing any time soon. In 2011, the total number of U.S. jobs outsourced was 2,273,392.  Anand Ramesh, research director at Everest Group in Dallas, sees rural shoring as just a fraction of global outsourcing.  Andrew Kokes, a vice president at Sitel Corp doesn’t see any change in the growth of outsourcing despite the rise of rural shoring.  Even with the cheaper costs of labor, the salaries for outsourced labor remain much lower.

Rural shoring will most likely continue to grow, but remain a complement, not a replacement for traditional outsourcing.

Based in New York, Shane P. Brady is a senior contributor and deep tech reviews writer at aNewDomain.net. Follow his Google+ stream and contact him at [email protected]

Shane P. Brady
Based in New York Shane P. Brady is a senior contributor at aNewDomain.net and deep tech reviewer. Contact him at [email protected]
Shane P. Brady
Tags: Business,Productivity