Building a successful offshore team is no small undertaking so how can business owners ensure a smooth transition from onshore to offshore?
When we think of offshoring, we tend to visualise big call centres in faraway lands, dealing with customer service enquiries for our banks, credit card companies and other financial institutions. But in truth, while customer service centres remain a big part of the overall offshoring picture, the number of everyday business functions that are outsourced is far greater. In fact, you might be surprised by the variety of different fields in which offshore providers are now commonly deployed.
Successful businesses have outsourced everything from accounting and finance departments to research and development teams, andeverything in between. Some firms rely on outsourcing to complete administrative tasks and data entry for cheaper than the work could be completed locally; whilst others have recruited offshore workers to fulfil more demanding roles such as with web and app development or complex technical analysis. In truth, a well-managed offshore migration can be utilised for pretty much any business function you can think of.
What are the Benefits of Offshoring?
It will come as no surprise to learn that the number one consideration for offshoring is cost. With the average salary in Australia now exceeding $90,000 a year, the savings to be had through utilising cheaper labour in countries with a considerably lower cost of living are there for all to use. The average salary in the Philippines, for example, works out as less than AU$15,600 a year. Even if you paid someone twice the national average in orderto get somebody highly qualified, you’d only spend about a third of what you would with local employees paid at an average wage.
These are just the headline figures, too. Offshore labour does not come with the additional expenses associated with local employment such as payroll tax, superannuation guarantee deductions and compulsory insurance. That’s before we even consider the related savings on overheads. With office space in Sydney costing an average of AU$95 per square foot (or AU$1,025 per square metre), that’s a considerable outlay for local businesses needing to house their workforce. That same prime real estate in downtown Manila costs the equivalent of AU$3 per square foot (that’s around AU$33 per square metre) and comes with direct access to a workforce in excess of 7 million people.
Benefits Beyond the Cost Savings
With staffing costs up to 80% cheaper and associated overheads often coming in at just 5% of the local rate, cost is the biggest contributor to a company’s decision to offshore business functions. However, these significant cost savings aren’t the only benefit and there are actually a wealth of further advantages to building your own offshore team for your business.
Many businesses enjoy considerably improved efficiencies in terms of productivity and delivery. This is due to having greater access to highly trained and experienced candidates with specialist knowledge who can help you grow and develop your business. The pool of applicants for your workforce is going to be far greater, making competition more intense, allowing you to pick from the cream of the crop.
It goes without saying that you’re not compromising on quality with your offshore labour force either. A lower cost of living does not mean lowering your standards in terms of education, skills or qualifications. In fact, many businesses find they end up with a talented team in their new offshore operation that complements their team back home. It’s common to find high calibre of candidates in key outsourcing destinations that is more cost effective than it would have been in the company’s home country.
This is just a snapshot of the common reasons to consider offshoring but there are a whole host more benefits to outsourcing worth factoring in to any decisions you may come to.
How to Get Started with Offshoring
There are three main approaches to offshoring:
- You can research and identify your preferred offshore location, learn about local regulations, customs, applicable taxes and laws, rent or buy business premises and begin the recruitment process to build your new offshore team.
- You can find a call centre or back-office functions provider in your chosen offshore location and negotiate with them to take on the work you’re looking to outsource. Typically, this will mean sharing pre-existing, non-specialist staff with other companies and you’ll have limited control over their management and development.
- The alternative is to effectively outsource your outsourcing to an offshoring specialist or business process outsourcing (BPO) company.
If your goal is a smooth and seamless transition from onshore to offshore then the advantages of engaging an offshoring company are numerous. You need in-market understanding and expertise to get up and running somewhere new, and that’s knowledge you can’t build up overnight. A successful offshoring agency will take the uncertainty out of understanding a new country, regulations, and its labour market, ultimately helping to bring those cost and efficiency savings to reality as quickly as possible.
Integrated OS have taken an innovative approach to business process outsourcing (BPO) by developing solutions that are designed to coincide with your business and its unique needs. We have a 9-step process for getting started with offshoring that has your business’ organisational goals at its heart. From ensuring that every hire is an ideally qualified long-term resource to tailoring your remuneration structure to best motivate your new offshore team, our expert team manages the complete end to end implementation of your new offshore operation.
Common Myths with Outsourcing
Offshoring is not for everyone and there are of course some cons along with those many pros. So, what are the main reasons firms avoid taking advantage of offshoring?
Outsourcing is Only for Large Corporations
A lot of businesses make the mistake of believing they’re too small to be able to benefit from outsourcing. However, the barrier to entry has never been lower and in 2021 even the smallest SMEs can take advantage. From taking over time-consuming administrative tasks to full management of your accounts department, there are countless real world use case examples where offshore teams have revolutionised the way ambitious firms can grow and prosper.
Language and Cultural Barriers
First up, let’s address the issue of language. This is simple to resolve: don’t hire anyone who doesn’t speak your language fluently.
If you’re hiring staff to interact with your English-speaking customers then native-level proficiency in English should be a requirement but even if your new offshore team isn’t due to be dealing with your customers, there’s absolutely no shame in requiring they all speak fluent English for the sake of their interactions with your existing staff.
In truth, most educated adults from the most popular outsourcing destinations will have a very high level of English. In India, Malaysia and the Philippines, English is recognised as an official language so there is no shortage of high proficiency English speakers.
When it comes to understanding and dealing with the nuances of a different culture, Integrated OS takes away the stress of having to get up to speed. You’ll get first hand insight and support from the experts who’ve been there and seen it all before you, providing advice on everything from holidays to customs around workplace etiquette.
Working with staff in different time zones can be tricky if you’re on different sides of the planet. However, it’s difficultto outsource somewhere that’s hours and hours outside of your local time zone butin some cases this might be preferable. Think about it: do you need your offshore team to be working to the same schedule as your local workforce? Some businesses find it more beneficial to brief in their design/development/reporting requirements at the end of the day, knowing the results will be ready by the time they’re back at their desk the next morning.
Of course, some businesses will want close alignment between local and remote teams and in such instances it’s generally sensible to stick to an offshore team in a similar time zone as your head office. It’s considerably cost effective to ask your remote team to work to a schedule that’s non-standard if you need them to. For Australian businesses, it’s useful to know that Malaysia and the Philippines operate on the same time zone as Australian Western Standard Time; just one of the many reasons these countries are so popular with Australian companies looking at offshoring.
Difficulties with Communication
The argument that meetings need to take place face to face has been blown out of the water over the past 18 months, with most of the business world having quickly adapted to new ways of working remotely. Scheduling in time to meet with your team in Manila should be no different to arranging a catch up with staff in Melbourne. Communication infrastructure in the major outsourcing hubs is of course excellent, and in many cases faster and more reliable than we’re used to!
Staff won’t be Suitable
It’s easy to discount the highly skilled workforce of another country as not suited to your business’ industry needs, but if you think a sector’s top talent can’t be found in nations you’re less familiar with, you’re wrong. For over 20 years Integrated OS have been working with businesses from a wide cross section of different industries, with many unique and highly specialised candidate requirements, and recruitment has never been a problem. From manufacturing and supply chain through to finance and marketing, we’ve even recruited for highly technical roles in the construction sector. Unless you’ve looked, you’ll never know, and you might just be surprised at the quality of talent that’s available.
Disconnect Between Local and Remote Teams
The connection between your teams is going to be as good as you allow it to be. The most successful companies put the time and effort into integrating departments across countries and time zones and the best offshoring agencies will be able to provide support with this for you. Distance is no excuse for internal communication failures!
Lack of Control Over Recruitment
If you’re looking to quickly plug in to an existing operation then you’re going to have minimal influence on who performs the tasks you’ve outsourced. However, businesses with time to invest in more efficient bespoke outsourcing solutions can expect to be considerably in more control.
At Integrated OS, we’ve got a vetted database of over half a million skilled, experienced, and qualified candidates – giving us quick access to the most suitable applicants to put forward for any given role. After an initial interview with us, we recommend the best candidates to our Partners who can run them through their own internal recruitment process.
Working with an Integrated Offshoring Specialist
By now you might be thinking that the business case for outsourcing some of your business’ core day to day functions has never been clearer, but how can you ensure you don’t waste money and end up with a substandard overseas workforce? This is precisely why businesses across Australia partner with Integrated OS to manage smooth and seamless integration of the ideal remote team for their company’s specific needs.
There’s no one size fits all approach to outsourcing and that’s why we tailor a bespoke outsourcing solution to all our clients, whatever their unique requirements are. We’re an independent, family-owned company with an exceptional record for staff retention so why not get in touch with us to find out more about just how Integrated OS can save time, money, and stress for you and your business.