Offshore Outsourcing: A Viable Solution To Labor Shortage In America

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The U.S. Chamber of Commerce confirmed America has a lot of job openings but not enough labor force to fill them. So how can we solve the labor shortage in the country?

How Did The Labor Shortage Happen?

According to the Director for Global Employment Policy & Special Initiatives of the U.S. Chamber of Commerce, more than 120,000 businesses temporarily closed during the height of the COVID-19 pandemic. The closure of several companies from various industries led to the laying off of existing employees leading to the unemployment of more than 30 million U.S. workers.

In 2022, even when the market started to recover, a significant number of experienced workers did not immediately return to work to fill open positions. Employers ended up adding an unprecedented 4.5 million jobs in the market eventually leading to labor shortage.

An analysis by the National Bureau of Economic Research shows that on top of the quarter-million people of working age who have died from coronavirus, at least twice that number across all ages have permanently disappeared from the current workforce.

In May 2022, representatives from the Global Innovation Policy Center (GIPC) and the U.S. Chamber of Commerce surveyed why Americans are staying out of the labor market. Answers from respondents showed approximately 66% of Americans who became unemployed during the pandemic claim they are only somewhat active or not very active at all in searching for a new job. Moreover, nearly one in five have altered their livelihood, 17% have retired, 19% have transitioned to homemaker, and 14% are now working only part-time. Lastly, 28% indicated that they have been ill and their health has taken priority over looking for work.

Other Factors Contributing to Current Labor Shortage

Early Retirements

According to an article published by the New York Times, skilled candidates are in short supply three years into the pandemic job market rebound and officials increasingly think they are not coming back. Amid the pandemic, a wave of baby boomers has aged past 65. Traditionally, older Americans have a higher retention rate and delay their retirements to earn a little bit of extra money and patch up tenuous finances. However, many today are leaving the job market and staying out of the workforce, aggravating the labor shortage.

Experts said younger job seekers went back quickly once vaccines became available and businesses reopened. Meanwhile, Americans aged 65 and up showed participation lags well below their pre-pandemic levels, the equivalent of a decline of about 900,000 people.

Decrease in Net International Migration

NBC News reported the U.S. had a net international migration gain of more than 1 million people in 2015 and 2016. By 2020, the year the pandemic arrived, it dived under 500,000. Then in 2021, the figure dropped to about 247,000. The massive and sudden decline subtracted a lot of potential qualified candidates from the U.S. economy.

Lack of Access to Childcare

The pandemic forced the child-care sector to crash, according to an article published online by the Washington Post. Between December 2019 and March 2021, almost 16,000 child-care programs closed permanently. One result of the unfortunate closures of child-care programs and classrooms is that parents, especially mothers, leave the labor force.

New Business Starts

The U.S. Chamber of Commerce mentioned some employees either left work or stayed unemployed to open their businesses and hopefully find work-life balance. In 2020 alone more than 4 million new businesses were started, according to the Census Bureau. For reference, the significant growth was a 24.3% increase from 2019 and 51.0% higher than the 2010 to 2019 average.

Increase in Savings

The New York Post published an article reporting Americans are “flush for the moment” due to the stimulus checks they received from the federal government to help them through the coronavirus pandemic.

Experts said that the enhanced unemployment benefits, health insurance benefits, and not being able to go out and spend money during the COVID-19 pandemic all contributed to Americans acquiring healthy savings. One in every six unemployed people strongly agrees that government-provided benefits are good enough to pay for their daily needs instead of rejoining the labor force.

The Most Impacted Industries of Labor Shortages

Researchers dubbed recent major changes happening in the U.S. market as “The Great Resignation” and “The Great Reshuffle”. According to the U.S. Chamber of Commerce, the rate at which new employees quit their jobs has grown drastically since November 2020 but is trending downward. At the same time, hiring many workers continues to outpace quits. High quit rates coupled with even higher hiring rates show that employees are leaving their jobs for new ones – often in search of higher wages, more growth opportunities to learn new skills, change in industry and work environment hoping to feel valued, or work-life balance.

Now, which industries have been impacted the most by “The Great Reshuffle” resulting in labor shortage?

A glance at the labor force data shows the Health Services, Social Assistance, Professional and Business Services, Trade, and Accommodation and Food Services industries have the highest numbers of vacant jobs.

Food Service & Hospitality

Jobs that require in-person attendance have had a more difficult time retaining current employees during the pandemic reshuffling. According to the U.S. Chamber of Commerce, the Accommodation and Food Services industry has had the highest quit rate since July 2021, consistently above 4.9 percent.

In September 2023, leisure and hospitality lost 837,000 workers. In the same month, the industry managed to attract employees of about 1.1 million people. Despite the high rate of the hiring process, the Accommodation and Food Services industry still has a high number of job openings and challenges in employee retention.


The manufacturing industry faced a major setback after losing roughly 1.4 million jobs at the onset of the pandemic. Since then, the industry has struggled to fill open jobs and find workers. The U.S. Chamber of Commerce said as of March 2023 there were 693,000 vacant manufacturing jobs. 

Government Jobs & Public School Teachers

The CNN News published an article online reporting government jobs are suffering the second-biggest shortage of workers. Within that industry, the bulk of the worker shortage is coming from public school teachers.

According to Bureau of Labor Statistics data, there were 118,000 fewer public school teachers across the country in the previous months compared to February 2020. Several teachers quit their jobs over fears that it would put them at a higher risk of contracting COVID.

Labor Shortage Solutions: Outsourcing, Offshoring

What Is Outsourcing?

According to Forbes, outsourcing is about moving internal operations to a third party. The basic philosophy of outsourcing is to move transactional activities to the experts to give an organization the capacity to focus on its expertise.

Most businesses practice outsourcing to retain flexibility. For example, any business can onboard new hires in preparation for a busy season without the financial commitment to retain talent.

After the business made it through a very busy period, as a business owner, you can easily switch back to an entirely in-house team of workers. An experienced outsourcing agency can allow you to scale your outsourcing needs and help connect with skilled workers.

What Is Offshoring?

Offshoring is primarily a geographic activity. It takes advantage of cost differentials by relocating labor from costly countries to cheaper economies and pay. The article published online by Forbes mentioned offshoring does not only relate to the production of physical goods but also services for small to larger organizations. The Indian IT industry, for instance, has been powered by waves of offshoring by technological companies in the West.

Combining Offshoring and Outsourcing

Although outsourcing and offshoring have two different definitions, both still share the goal of saving money for both sellers and consumers. Economists believe an ultimate means to save a significant amount of money in business is to combine offshoring with outsourcing. That means moving production or services to a third party that is based in an overseas location or hires overseas workers.

Can Offshoring and Outsourcing Solve Labore Shortage?

According to Forbes, several businesses are geared toward remote work because of the mutual benefits between the employer and employee. Presently, 12.7% of full-time employees have remote positions, flexible scheduling, and work outside of the company’s office. This only shows how rapid is the normalization of remote work environments.

Experts believe that by 2025, an estimated 32.6 million Americans will be remote employees. Across the globe, the arrangement of doing work outside of the office is trending too mainly due to the job flexibility.

A remote job is a work done outside of a traditional office environment. To work remotely means to accomplish tasks outside of a physical office setting. When the pandemic hit, different countries and companies started paying attention to the unconventional arrangement. Now, having a home office and working remotely is known as the “new normal”.

Offshoring and Outsourcing: Duties of Remote Workers In Different Industries

Duties Of A Remote Employee In The Information Technology Industry

The information technology sector was among the first to recognize the advantages of using a Virtual Assistant in the workforce. Remote employees hired by IT companies are commonly responsible for web development, website maintenance, writing and testing the code for computer applications and software programs, and even administrative work. If you can identify other tasks you can outsource, a well-trained virtual assistant is the best addition to your IT team.

Tasks Of A Remote Employee In The Personal Services Industry

If you are an owner or manager of the businesses mentioned or similar, you can hire a virtual employee to provide administrative support and perform other tasks. A virtual assistant, sometimes referred to as a VA, is skilled in performing duties that support day-to-day business operations. Professional virtual assistants can handle booking appointments, calendar management, processing refunds, and social media marketing.

Duties Of An Outsource Employee In The Travel and Hospitality Industry

If you are an owner or manager of a hotel, travel agency, tour operator, and other similar ventures, your business can benefit from hiring a remote worker. Delegating repetitive tasks to virtual employees can help you focus and increase productivity. Remote workers are skilled in responding to emails and phone calls promptly, handling customer data, and moderating social media accounts. They can also manage travel arrangements and administrative work.

Tasks Of A Remote Employee In The Healthcare Industry

Some remote workers have professional backgrounds and experience in the medical field. Their specialized training allows them to join the healthcare workforce and competently handle duties like medical coding–data entry, reviewing medical records of patients, translating information into codes for insurance processing, confirming treatments with medical staff, identifying missing or wrong information, and submitting forms to insurers for reimbursement.

Duties Of A Remote Employee In The Education Industry

If you are a member of the education supersector, hiring a virtual assistant can help you save time from doing all the small tasks. Professional remote service providers are trained to handle administrative duties and public relations. You can safely delegate to a virtual assistant tasks like data entry, content management, and creating PowerPoint presentations. Most remote workers are skilled in reviewing documents. They make sure your documents are free from typos, content inaccuracies, and other issues before publication.

Tasks Of A Remote Employee In The Accounting Industry

Do you think your business needs support in handling the financial accounting work? A remote worker with a background in accounting can help you manage the workload. Many virtual assistants specialize in bookkeeping tasks, preparing financial records, and utilizing accounting software. Professional remote support employees can also perform various administrative tasks including answering emails, scheduling meetings, and filing expenses.

It is challenging to retain current employees at lower wages especially with more jobs opening up anywhere. If your company does not have enough workers and has significant quit rates, you may address the labor shortage with a solution like offshore outsourcing.

How Can Employers Hire Remote Workers?

Remote Raven is an outsourcing company based in Arizona. The agency offers remote support services to various businesses.

The company has HR professionals and local managers who thoroughly vet all candidates. Overseas employees affiliated with Remote Raven are tech-savvy, possess essential skills, and are highly qualified to provide general administrative support, increase productivity, and more. As a talent acquisition agency, the company will take on the responsibility of finding a compatible remote worker for you and your business.

If your company is having a hard time looking for competent employees, contact Remote Raven and start the process of filling in job vacancies!