As the competition gets tougher, more and more companies are looking overseas to reduce costs and remain competitive in the marketplace. Off-shoring used to be an option reserved for the very large corporations who had the money, resources and global experience to pull it off successfully. These days, with a myriad of companies providing advice and direction, it seems the doors are open to just about anyone looking to increase profits by moving production into low cost countries, but is it a good idea?

There are arguments on both sides. Some will tell of the huge profits realized by off-shoring, while others have tales of near disaster. You need to look at your own position in the market, determine if you have truly done everything possible to reduce costs and improve productivity, and then examine the options that off-shoring present to see if and where you should be expanding. Though overseas labor rates can be quite attractive depending on the country, there are a multitude of other factors that can make or break you.

The trend has been to locate in the low cost countries, those with extremely low labor rates, tax breaks, utility costs and favorable customs regulations. As times goes on, however, these low cost countries become higher cost countries as they need to add infrastructure, training and other amenities and, as a result, companies move on to yet another country to take advantage of the lower labor rates. As an example, NAFTA caused a wave of expansion into Mexico, but lately more companies are leaving Mexico for the lower labor Asia can offer.

How can you pass it up? Fully loaded labor rates for low skilled workers in China, for instance, are a few dollars per day as compared to the few dollars per hour in Mexico; and then there are the wages in the US with the additional burden of ever rising health care costs and the wide range of benefits we demand along with them. So why not hurry overseas to reap the rewards before our competition beats us to the punch?