Geodiversity: The Strategic Key to Scale Offshoring 

Introduction: The Evolution of Offshoring and Outsourcing in Accounting 

Picture this: a decade ago, the idea of outsourcing and offshoring in the accounting industry was greeted with doubt and uncertainty. Fast forward to today, it has become as routine as balancing a ledger.  
But here's the thing, even while the initial problems of finding the right partners may have been overcome, a whole new set of challenges awaits those of us navigating this ever-changing landscape. 

The Next Challenge: Talent Retention and Development 

Now, imagine you've cleared the initial hurdles of offshoring and outsourcing in your accounting firm. The next challenge? Holding onto your top talent and fostering their development. 
 It all comes down to maintaining team engagement, continuously honing their skills, and ensuring they feel valued. But here's the kicker: without a solid long-term plan in place, your efforts could fall short of achieving lasting success and growth. 

The Role of Geodiversity in Addressing Challenges 

How did we address these challenges? Our value proposition revolves around one thing: Geodiversity. 
By strategically spreading our offices across 2 countries and 18 cities, we aren’t just playing it safe but gaining a significant edge in navigating the complex issues of talent retention and fierce market competition. Over the next five to eight years, our expansion plans will be deliberate and calculated. We aim to establish a presence in two additional countries, extending our reach to 30 cities worldwide. 

Strategic Expansion: Gaining an Edge 

You might wonder, "How does this expansion matter?" The answer is simple: it's about long-term sustainability and growth. 
When your workforce surpasses the 10 or 20 mark. Having it concentrated in one place presents you with the risks of market changes and operational disturbances, especially if you are in a market which is ultra-competitive. In such cases, diversification isn't just a strategic choice; it's a necessity. 

Global Talent Competition: Urban Centers vs. US Cities 

 Let's dive into the dynamic landscape of urban centers, where the competition for talent is intense. In cities around the world, like Ahmedabad in India, major players such as Armanino and Citrin Cooperman are establishing a presence, with ambitious projects like Gift City aiming to become global hubs akin to Singapore or Dubai. 

This trend reflects a broader transformation in various cities that are poised to become significant players on the global stage. The growing importance of these urban centers is taking on an exciting new dimension with the potential for major firms, including the Big Four, to establish global delivery centers. 

Comparing this to the situation in tier 1 and tier 2 cities in the USA, we see some interesting contrasts. 

Tier 1 Cities (e.g., New York, Los Angeles, Chicago): 

Pros: 

1. Talent Pool: Large and diverse, with access to top universities and a highly skilled workforce. 
2. Infrastructure: Advanced infrastructure and extensive business networks. 
3. Opportunities: High concentration of major companies and industries, offering abundant opportunities. 

Cons: 

1. Costs: Significantly higher living and operational costs. 
2. Competition: Fierce competition for top talent, leading to higher salaries and turnover rates. 
3. Congestion: Often suffer from heavy traffic and crowded public services. 

Tier 2 Cities (e.g., Austin, Nashville, Raleigh): 

Pros: 

1. Cost:  Lower living and operational costs compared to tier 1 cities. 
2. Growth Potential: Rapidly growing economies with increasing opportunities. 
3. Quality of Life: Often offers a better quality of life with less congestion and more affordable housing. 

Cons:

1. Talent Pool: Smaller talent pools, which may require more effort to attract and retain skilled professionals. 
2. Infrastructure: Developing infrastructure which may lag behind tier 1 cities. 
3. Market Size: Smaller markets can mean fewer business opportunities and a limited customer base. 

One clear benefit that becomes apparent as we navigate the complexities of a cutthroat market is the enormous skill pool at our disposal. However, the hunt for skilled professionals has intensified, pushing costs and turnover rates higher. 

Cost Considerations: Economic Realities Across Cities 

From a cost perspective, the economic realities of different tier cities are evident. By providing transparent comparisons between metro and non-metro salaries across various skill levels, Entigrity aims to enable clients to make informed decisions that align with their long-term objectives. 
The level of a staff member influences the hiring costs in various city tiers. In tier 2 cities, the hiring costs are lower, with the baseline set at 1x. Conversely, in metro or tier 1 cities, the hiring costs are 1.25 times higher compared to tier 2 cities. This means it is more expensive to hire staff in metro or tier 1 cities than in tier 2 cities. 

Blue Ocean Strategy: Carving Out a Niche  

Rather than getting sucked into the red ocean’s chaotic environment, where resources are few and the competition is intense, we’re navigating a path towards sustainable growth. It’s not just about following the flow; we also need to carve out our own course to success. 

This is our blue ocean strategy—leveraging geodiversity to carve out our niche in the market. 

Like Manila, capital of the Philippines. It is understandable why we have selected it as one of our important destinations given its dynamic energy and expanding economy. 

Expansion into Tier Two Cities: Creating a Foundation for Success 

By expanding into tier two cities, we are not only gaining access to a growing talent pool but simultaneously creating the foundation for long-term growth and success. Out of all our offices, about 15 are in tier two or below cities. Even though these aren't the huge markets you usually hear about, they have a ton of promise. 

Shaping Market Dynamics: Proactive Approach to Competition 

Your argument could be: Won't these markets eventually become competitive too? 

It’s a valid point. As these cities continue to develop, competition is inevitable. Still, our approach is not just to stay ahead of the curve but to shape it. Not just responding to the competition but actively driving it by being present in multiple markets. 
Imagine the possibilities that come with diversifying your workforce across multiple cities—not just one or two, but a network spanning several vibrant hubs. Take, for instance, a client who's built a robust team of 60 individuals spread across five cities. Their strength isn’t restricted to a single area; rather, it’s distributed across to take advantage of the unique talent and resources each city has to offer. 
This approach isn't just about spreading risk—it's about achieving balance. When you have diversity, the risk of attrition is significantly less. 

As we wrap up, it’s clear that the evolution of offshoring and outsourcing in accounting demands more than simple band-aid solutions. Leading change by valuing geodiversity, establishing an environment that encourages constant growth is the way to go. 
Happy reading! 

Entigrity™ is a reliable offshore staffing partner for 850+ accounting and CPA firms, 200+ CFOs & businesses across the US, Canada, and the UK. With a flexible and transparent model, the company enables firms of all sizes to acquire skilled accounting, bookkeeping, and tax preparation staff. As a pioneer in offshore accounting, Entigrity ensures precise alignment with the hiring needs of accounting firms, providing staff under your control and management and minimizing concerns about compliance, payroll taxes, overheads, or benefits. Trusted by 40+ of the top 200 US accounting firms, we specialize in supplying highly skilled personnel from India. We have 39 global offices across India. We are GDPR compliant, ISO 27001:2013, and SOC 2 Type II certified. We are now "Great Place to Work Certified™," "KPO Organization of the Year," and "Dream Companies to Work For" among accounting industries. Entigrity is also recognized as a platinum partner by the Institute of Management Accountants (IMA). The company is strategically partnered with Boomer, a BDO Alliance USA and Abacus Alliance member.   

Christopher Rivera

Director, Client Relations

Christopher Rivera, Chris serves as a Director of Client Relations and Business Development at Entigrity. He is an expert at leading and managing teams actively from the front. His expertise in sales, training, coaching, mentoring and influencing combined with his competitive nature makes him a strong leader.  Chris has traveled through the length and width of the country and has spoken with more than five thousand CPAs, understanding their challenges and limitations. On the grounds of that, he can now easily provide opinions and solutions that can be immensely helpful to the professionals. He has also represented Entigrity at a number of major accounting conferences and networking events.