Not OP, but I work in a company that is fully remote with a mix of offshore and onshore.
It's possible we'd hire junior engineers locally for the offshore roles if we went fully local, but there's zero chance that we could offshore any of our existing onshore roles. This is for a few reasons:
1. Data law compliance. We can't let people outside the US see PII, which precludes them from participating fully in many support roles, including rotations within engineering.
2. Time zone differences are huge. We have some developers in Eastern Europe who we love, but coordinating their work with the roles that we can't offshore is substantially trickier than local employees. At a certain point it's more rational to pay higher salaries for US-timezone employees.
3. Cultural differences get in the way. It's far easier for a product person or a designer to get an idea across to someone with shared cultural context, so there are fewer back and forth iterations when there are US employees on a project than when there aren't. For the same reason we can't offshore design roles since we're serving a US market, so that doesn't work as a solution.
4. There's substantial difficulty in filtering for quality. We have some offshore contractors who've been with us for years, but we've struggled whenever we tried to add new ones. Hiring is always hard but it's particularly hard when you're either doing it indirectly through a contracting company or doing it yourself across cultural barriers.
Lastly but perhaps most importantly, when we're doing offshoring through contracting companies who take a share of the fee, the difference in cost versus a US employee is much less significant. And if we're not using a contracting company then we're on the hook for figuring out the tax situation ourselves and as I mentioned filtering for quality is much harder. So it doesn't save as much money as people would assume to offshore a role.
As well as take shared cultural context / communication for granted.
That isn't to say that teams should be monocultural, but expecting to have high performing teams without any thought to culture, time zone, or communication ability is optimistic.
IMO those issues are fixable with good hiring and firing. But all the fixes for large timezone differences that I've seen have significant costs and tradeoffs. Usually you pay with velocity.
Ok. Wasn't intending to address any of the other issues you raised, but I can because on further reflection there are many issues with your points:
(1) This generally isn't true for most companies. You must be in healthcare? Otherwise there are a bunch of state-level data protection laws which to my knowledge do not prevent access to PII by persons not within the US.
(2) Partially covered with my first comment about South America. I'll also note that asynchronous work seems to be more productive for a lot of people, and practically everyone in the corporate world complains about too many meetings – so maybe making it harder to constantly have meetings is a feature, not a bug (even if your org isn't great at async).
(3) Shared context might be helpful, but the design part is nonsense. Obviously non-Americans can design for the US market. Suggesting otherwise is just so ludicrous I don't know where to start.
(4) This is just a skill issue. You can definitely filter for quality in off-shore roles just as well as you can for on-shore roles. If you're bad at it, that's on you, not intrinsic to the off-shore labor or their circumstances.
(5) Saving money isn't the only reason to off-shore roles. Believe it or not there are actually more talented people you have access to if you consider all 8 billion of the world's population rather than only looking at 4% of it. Or for example with your first point where off-shoring can actually be a huge boon because diff timezones means all of your employees can work a 9-5 without needing people to work graveyard shifts. Also there are solutions like Deel which are less expensive than your average contracting middleman, but still allow you to hire people globally without needing to deal (pun intended by them I guess) with all the local tax etc issues. So even if money is your only concern, there is plenty of room left in the market for labor arbitrage.
It's possible we'd hire junior engineers locally for the offshore roles if we went fully local, but there's zero chance that we could offshore any of our existing onshore roles. This is for a few reasons:
1. Data law compliance. We can't let people outside the US see PII, which precludes them from participating fully in many support roles, including rotations within engineering.
2. Time zone differences are huge. We have some developers in Eastern Europe who we love, but coordinating their work with the roles that we can't offshore is substantially trickier than local employees. At a certain point it's more rational to pay higher salaries for US-timezone employees.
3. Cultural differences get in the way. It's far easier for a product person or a designer to get an idea across to someone with shared cultural context, so there are fewer back and forth iterations when there are US employees on a project than when there aren't. For the same reason we can't offshore design roles since we're serving a US market, so that doesn't work as a solution.
4. There's substantial difficulty in filtering for quality. We have some offshore contractors who've been with us for years, but we've struggled whenever we tried to add new ones. Hiring is always hard but it's particularly hard when you're either doing it indirectly through a contracting company or doing it yourself across cultural barriers.
Lastly but perhaps most importantly, when we're doing offshoring through contracting companies who take a share of the fee, the difference in cost versus a US employee is much less significant. And if we're not using a contracting company then we're on the hook for figuring out the tax situation ourselves and as I mentioned filtering for quality is much harder. So it doesn't save as much money as people would assume to offshore a role.