Engineering outsourcing has evolved from a cost-saving tactic into a strategic growth model. Today, leading Architecture, Engineering, and Construction (AEC) firms leverage outsourcing to improve efficiency, control costs, and access specialized expertise.
As projects become more complex and deadlines tighter, scaling internal teams quickly while maintaining quality is increasingly challenging. Outsourcing provides a flexible, scalable solution without the long-term burden of permanent hiring.
I. Why Engineering Firms Choose to Outsource
Engineering is a complex profession that necessitates a great deal of expertise.
Because of the nature of project work in engineering, scaling a business while managing operating costs is extremely tough to achieve. When a company has won a project, they must quickly increase their workforce to handle the additional workload. From feasibility to delivery and maintenance, several types of work are carried out at different phases of the project cycle. And each sort of work demands a specific set of skills. As a result, outsourcing may be the best approach for cost control, quality, and project timeline.
Outsourced engineering solutions are increasing in popularity since they are the most effective method of minimizing or eliminating the panic phase. Outsourcing is the process of contracting out a portion of a large engineering project to an external engineering team. Utilizing an external engineering firm to perform a well-defined scope of work enables businesses to operate more efficiently.
For a successful project, companies must first set up the right teams, but this takes time away from actual execution.
It’s not a core competency for the majority of technical companies to properly set up the appropriate infrastructure. They excel in delivering large-scale industrial projects and winning bids. As a result, the area of greatest risk is ensuring that the correct teams are in place for each step of the project in order to deliver on time and on budget.
There is a lot of competition for highly specialized engineering talent. When you need immediate access to seasoned technical experts, getting them on your own is time-consuming and frustrating. Outsourcing enables you to immediately expand your workforce. With a single phone call, you’ll have access to the best professionals in the business.
II. Key Benefits of Engineering Outsourcing
Cost Advantages
In today’s digitalization world, outsourcing has become a common business practice for businesses of all sizes, with one of the major reasons being the cost benefits it brings about.
Outsourcing converts fixed costs into variable costs and frees up capital for investment, allowing businesses to avoid large expenses in the early phases of their development.
All businesses will inevitably spend certain overhead costs to fulfill regulatory needs (for example, legal, tax, HR, health and safety, payroll, and bookkeeping expenses), and this is one area where an outsourced solution is often beneficial. The potential savings can be even greater when companies in developed countries offshore the work to a partner located in a developing country like Vietnam, where living and operating costs are significantly lower. But hiring people in other countries is a hassle, isn’t it? This is where an outsourcing partner may help.
When you work with an outsourcer, they can handle the difficult process of hiring in a low-cost country, allowing you to achieve a high-quality result at a low price point.
The average salaries of an onshore employee in Construction industry versus that of an offshore Vietnamese:
Average onshore employee salary:
- $75k per year (Doesn’t include overhead expenses.
Average offshore employee salary:
- $20k per year (Includes overhead expenses.)
- $75k to $110k per year (Doesn’t include overhead expenses.)
- $30k to $46k per year (Includes overhead expenses.)
Not only that, outsourcing can generate an increase in revenues by allowing you and your in-house staff to concentrate on commercial imperatives.
Technical expertise
The shift to outsourcing is already well established in the manufacturing sector, especially in engineering and technical functions. When you outsource a certain task, job or process to an outsourcing partner, you are leveraging the specialized service and knowledge they provide.
Throughout the years, Union Technical Outsource has built a team of the most competent and dedicated engineers, draftspersons, architects, estimators and 3D renderers to put at your service.
Recruiting team members for such highly technical roles is hardly a simple nor inexpensive process. The ideal candidates would have the appropriate qualifications, experiences, skill set, and aptitude for the job. Hiring a new employee might be difficult if you just have access to a small pool of local candidates. Most of the time, this implies that you will have to make a compromise. When it comes to outsource, not only will you get access to a bigger talent pool, the outsourcing partner of your choice will also handle the hiring process, and they will deliver candidates who will fit in well with your existing staff.
As in Australia it is even harder to find the right candidate that fits your expectations due to three factors:
- High average wages: A university graduate will set your budget back between $45k to $60 with little return of that investment if she or he decides to move on.
- Long training time: An apprentice will consume up to one year or more before he or she becomes competent for the task.
- Job attractiveness: A survey in 2019 found that many young Australians would rather be YouTube or Instagram influencers than car salespeople or estimators. This choice shows a shift in the Australian labor market, which lacks technical professionals. Unfortunately, this tendency is worsening as fewer people choose technical vocations like drawing in favor of more lucrative and interesting ones like real estate agents.
When comparing Vietnam’s labor market to that of Australia:
We have 460 universities and vocational colleges that produce a mere 2 million engineers and technicians a year, which means our skilled labour market is very competitive and we have to keep on improving our professional skills. Fortunately, Union Technical Outsource has a very dynamic HR team who works very hard over various platforms to ensure the right candidate is offered to your service. That includes one who may have to pass a skill test, a communication test, and a work ethic test before entering our workforce.
When you start a team with us, you will not start with a newbie, but with a senior, a team leader, in that particular area to ensure we make the most of your training and save you as much time as possible.
That is 10 times more effective than training a new apprentice. Then down the path, if you decide to extend your offshore team with us, our senior will also take care of the training for the newcomers. Because our principle is simply Quality over Quantity, you will not be required to pay for anything until you are convinced that the new hire is competent enough to carry out tasks.
As a company prepares for an offshore employee, there are a number of actions that need to be performed before it is offshore ready. This includes applying best practices in communications, technology, output management, and work in progress. Keep in mind that you will not be embarking on the outsourcing journey alone, you will receive support from the service provider throughout the entire partnership as needed.
Outsourced projects are results-driven, which is why the focus on deliverables is a major factor in the growth of outsourcing.
Firms that rely on outsourcing businesses will be able to cover a wider range of tasks and save time with fast and quality service delivery. Furthermore, outsourcing will provide you with more staffing flexibility, allowing you to hire additional staff for a certain length of time at a fixed cost.
Focus on core competency
Nowadays, when it comes to outsourcing functions, businesses often consider, “How much should we outsource, and to whom?” rather than “should we or shouldn’t we?” It all comes down to focusing on your company’s core competencies and choosing the right outsourcing partners to work with.
Running a business often means there are plenty of inevitable tasks on your to-do list that do not require your expertise or generate income. It is more efficient to spend your time and resources doing what you excel at.
A typical misconception regarding outsourcing is that it will take jobs away from your local team or add challenges to the company’s daily operation. This is not really the case. In most cases, offshore employees perform repetitive, process-driven tasks while in-house employees focus on your core competencies, high-value tasks. Outsourcing non-core activities allows you to tap into the key capabilities of others and better focus on your own. Companies with core competencies have distinct advantages that set them apart from the competition.
When looking for an outsourcing provider, ask the suppliers questions that will give you a deeper understanding of their processes. Guarantee a successful partnership by selecting the right outsourcing provider with appropriate methodologies and practices for your business.
Keeping strategy in-house and sending implementation offshore is an example of a highly effective offshore model.
During periods of rapid growth, back-office operations of a business tend to increase. As a result, you may find that your people and financial resources are diverted from the core activities that made your business successful in the first place.
For example, say your firm wins a major contract that will result in a dramatic increase in the volume of purchasing. By outsourcing purchasing duties, you free up staff to concentrate on the contract itself. Local employee roles aren’t eliminated by outsourcing; they’re just given more time to focus on the activities they enjoy doing. In turn, this will lead to a higher level of productivity, staff satisfaction and retention.
Business expansion
In many cases, outsourcing services isn’t just a cost-saving strategy; it’s a necessity. Assigning certain responsibilities to an outsourcing partner is often the only feasible way to expand your business, launch a product, or manage operations.
Outsourcing can help your business become more flexible and agile, allowing it to adapt to changing market conditions and obstacles while saving money and improving service levels.
Aside from the cost advantages, outsourcing business functions gives you more staffing flexibility thanks to adjustable duration of outsourcing projects and timeframes. Say you need an extra engineering function for six months or six years? Outsourcing can accommodate any schedule — handling the full transfer of candidates from project to project as needed — without sacrificing quality. With just internal resources available, this kind of contractual flexibility, hence competitive edge would be unachievable.
Outsourcing can also provide you with access to capabilities and facilities that would otherwise be unavailable or ridiculously expensive, resulting in more resources to reinvest back into your firm.
You have to compete in the age of technology to succeed. Australia’s high-cost economy has made it more crucial for businesses to find foreign partners and service providers in order to remain competitive and optimize their efficiency. You could invest the saved money and resources achieved by outsourcing in improving your products or running marketing campaigns. This is especially beneficial in the early phases of new projects, such as the introduction of a new product or the expansion into a new business sector.