Betting firm cries fowl and turns to offshoring

A great example of a UK firm opting to use offshoring as a way of improving its competitive position…

The Guardian reports that bookmaker William Hill is closing one of its UK call centres and outsourcing jobs at another as it takes its telephone betting service offshore in a move that will affect 400 British workers.

The reason is simple. William Hill’s retail betting shop business is under severe pressure from online gambling and betting exchanges. Many of its shops are now loss-making. Worse still, competitors that operate internet services offshore generally pay taxes of up to 2% on their profits, and are not subject to the horserace betting levy, which UK-based bookmakers must pay in order to take bets on British races. By remaining in the UK, William Hill believes that it is at a significant competitive disadvantage. So it has taken the decision to move telephone betting offshore. Gibraltar seems to be the new global centre for betting companies!

Offshoring and outsourcing. Two important terms - which are often misunderstood.

Offshoring simply means that work is done overseas. It might be done by a firm’s own employees, or by an external supplier. The point is - the work is done elsewhere.

Outsourcing means that someone else does the work for a firm - either here in the UK, or overseas.

The William Hill case study mentioned in the article provides an example of both. The work of the Sheffield call centre is being outsourced (to a specialist firm operating in the UK). The telephone betting operation is being offshored (to Gibraltar). It sounds like William Hill will be employing the Gibraltar based staff - so that option is an example of offshoring but not outsourcing