While offshoring has clear benefits, it can also have drawbacks that need to be considered. By taking the right approach, you can reduce these negative potential consequences and increase the positive impact. To help you get the balance right, here are some important dos and don’ts to consider.
The DOs of offshoring
DO your cultural research
There are many cultural differences to understand when hiring services in another country. These cultural differences can affect how you communicate, how you provide motivation and how you get the best out of your overseas workforce. For example, some cultures prefer direct communication and strict schedules, while others prefer indirect communication and flexible schedules.
DO prioritise quality control over cost
While many companies offshore to take advantage of reduced labor costs, it’s important to not sacrifice quality. In fact, you should always prioritise quality control and then look for services with the cheapest rates that meet these quality standards. For example, when hiring a virtual assistant, look for services that can run background checks and resume vetting for you - such services will ensure that you reach top tier talent rather than hiring someone who may not be qualified.
DO consider hiring an international lawyer to negotiate legal hurdles
Hiring people overseas means having to consider international labor laws. There may be cases where you have to provide certain benefits by law or follow certain rules regarding termination and contracted hours. A specialist lawyer can help you understand these legal requirements. This could include helping you to write contracts and educating you as to how tax works.
DO comply with Fairtrade practises
Fairtrade is an organization that sets international standards regarding working conditions, wages and sustainability. It is not a legal requirement that companies try to make sure that their workforce meets Fairtrade standards, however it is highly recommended that companies try to comply in order to maintain a positive reputation - many companies have experienced negative press or boycotts for taking advantage of unethical labor conditions in certain countries just to save money on labor.
DO consider touring factories or farms
Sometimes it can be worthwhile touring a factory or a farm to get a better idea of the overseas supplier you are using. This can allow you to conduct a quality control report and potentially build a better relationship with a supplier. Yes, it does mean spending money on travel, but without conducting a tour, it could be harder to gauge how high-quality a service truly is and whether they align with your company standards.
The DON’Ts of offshoring
DON’T neglect cybersecurity
If you’re going to be communicating remotely and sharing sensitive data online, you need to consider the cybersecurity risks that can come with this. Make sure that you are using the most secure technology you can afford to reduce the risk of a breach. Protocols like encrypting files, using multi-factor authentication and monitoring networks could be essential for keeping your data safe. When outsourcing overseas IT services or financial services, always look into their reputation and ask about what types of cybersecurity practises they use to get a good idea as to how seriously they take security.
DON’T force laid-off employees to train off-shore replacements
Thinking of replacing domestic workers with offshore workers? This can lead to a lot of controversy if you do not handle it sensitively. One thing you should never do is to force laid-off employees to train their off-shore replacements. This can be humiliating and can lead to conflict and potential negative publicity. It is best to handle layoffs ethically by offering severance packages and outplacement services to maintain goodwill. Training may be better off left to a handful of senior employees who are retained within the company and who can continue to handle communication with off-shore workers.
DON’T overlook the costs of offshoring
While offshoring can save costs in many cases, there are potential additional costs that can be overlooked - some of which may make offshoring initially more expensive. This includes the cost of travelling to meet overseas staff, training them and setting up new software for communication/security. Make sure that you can afford these extra costs before you start hiring a team in another country.
DON’T underestimate the language barrier
Communication errors can often occur when offshoring. Even if the person you are hiring speaks English fluently, there may still be local idioms or business jargon that they are not aware of. This can even happen when doing business relations between the US and UK. Make sure that communication is always clear by thinking carefully about the language you use and confirming messages that you think could be misunderstood. When dealing with individuals that don’t speak English well, consider when it may be necessary to hire an interpreter or translator in order to make sure everything is clear.
DON’T offshore tasks that require local knowledge
If a task requires knowledge of local market trends, local laws or local geography, it is usually not a good idea to offshore this task. For example, it’s often best to hire a local marketing company if you’re trying to target consumers in your local area. They will understand the local market trends and demographics of the area better than an overseas marketing company. Only hire a marketing company in another country if you are trying to promote your service to that country’s local market (for example, it makes sense to hire an Indian marketing company when trying to market to an Indian audience).
Conclusion
Off-shoring can be incredibly effective if approached thoughtfully. By following the above dos and steering clear of the don’ts, you’ll position your business for success. Take the time to plan and research your offshoring strategy for the best results and don’t just focus on the costs you can save.
