Onshoring (Homeshoring)

Definition

The term onshoring refers to the practice of assigning work previously performed in a foreign country to a domestically-located business operation.  Onshoring is the opposite of offshoring, which is the practice of sending work traditionally performed domestically to an overseas service provider.

Explanation

Also known as homeshoring, onshoring is the practice of bringing work previously completed in an overseas nation back to domestic operations. Companies may decide to onshore work for a number of reasons; however, the primary driver is usually economic.  Oftentimes the same business case that provided the rationale for offshoring the work will support the decision to bring it back onshore.  Drivers for this decision usually include the relative cost of expenses such as labor, raw materials, and energy.

Politicians will also pressure companies to bring overseas jobs back home, since onshoring helps lower the domestic unemployment rate.  Companies that are not satisfied with the quality of the work completed overseas may also decide to bring it back to a domestic location.

Onshoring is sometimes confused with the term insourcing, which is the practice of filling a job function, or assigning a project, to a person or department within the company.  A business can onshore work, but not insource it.  For example, a company's call center may have been located overseas.  Management may decide they'd rather have the calls answered domestically, but can still outsource the work to another company.

Related Terms

employee engagement, offshoring, insourcing, outsourcing