Which process involves relocating operations to a country with lower pay rates?

The process of relocating operations to a country with lower pay rates is known as offshoring. This strategy is often employed by businesses looking to reduce costs and enhance their competitiveness by taking advantage of lower wages, as well as potentially lower operating costs, in other countries. Companies can offshore various functions, including manufacturing, customer service, and IT services, among others. By doing so, they can focus on core activities while driving cost efficiency and optimizing resources globally.

Reshoring, on the other hand, involves bringing operations back to the company's home country, typically in response to increasing costs or quality concerns from offshored operations. Nearshoring refers to relocating business processes to a nearby country, which can offer benefits such as proximity, similar time zones, and cultural alignment while still maintaining some cost advantages. Outsourcing involves contracting out specific business functions to third-party companies, which may be located domestically or internationally but does not necessarily focus on relocating entire operations to benefit from lower labor costs.