Let’s be honest, offshoring doesn’t have a flawless reputation. In the back (or front) of many people’s minds is a question about whether the quality or ROI can actually be good. Others wonder whether it’s even ethical.
Many of these questions come from offshoring’s roots. Decades ago as offshoring was beginning, it was more common for employees to have limited English-language skills or technical skills.
Economies and the degree of globalization in these countries doing most of the offshore service delivery were a far cry from where they are today. This meant very low prices, but also that few people had advanced experience with technology or with English-based customer service.
These days things have changed. While costs are not quite as low as they once were, they’re still often 70% lower. And businesses are now often able to find employees that meet, or actually exceed, the hiring bar they’re used to. That’s even true when compared to high skill, high cost countries like the United States.
All of that said, there are a few critical caveats. Results will really depend on who you hire, which country you’re hiring in, and who your offshoring partners are.
A great staffing firm or BPO can quickly and affordably build you a thriving offshore operation. A poor one paid through the wrong contract model will collect a high margin and deliver low quality. It’s these latter operators that continue to drag the name of offshoring through the mud.
Below we’re covering 6 of the most common concerns we hear, and how they’re either unfounded or avoidable.
Concern 1: Offshore teams won’t be able to communicate well with English-speakers.
With the wrong talent you will end up with a workforce that doesn’t have great English-language skills. Many people are familiar with the experience of calling customer service and reaching a representative they struggle to understand. Fortunately, that doesn’t have to be the experience you provide.
It’s increasingly common that talent in low-cost countries have heavy exposure to the English language. In countries like the Philippines, where outsourcing helps drive the economy, English is often taught as a first language. Leading talent can even be found fully acclimated to Western cultures, with virtually no accent.
Much of the talent pool has also developed an affinity for Westerners and Western pop culture, which makes it very easy to build not only quality operations but a thriving culture of collaboration.
Avoiding language issues can also be simple. Savvy businesses are learning to provide clear job requirements and perform language skills testing during the interview process.
Concern 2: You can’t outsource roles that require advanced technical skills.
This fear stems primarily from a couple beliefs. First, that people in certain other countries may have received a subpar education. Second, that they won’t have had access to the training or experience necessary to master more complex skills.
For many of the top offshoring locations, these misconceptions are relics.
Just by numbers, access to higher education in many lower-cost countries rivals the access available within the United States. For example, the Philippines boasts more than 2,000 colleges and universities for its population of 113.9 million. That’s 1 for every 57 thousand people. Whereas the United States has nearly 6,000 post-secondary institutions for a population of 334 million. That’s 1 for every 56 thousand people – not a big difference!
This doesn’t account for education quality, but many of these institutions offer similar degrees and courses to US colleges.
And these days, fewer skills require a college degree to master.
Access to coaching and online training is available to anyone who has an internet connection and the drive to learn. Options span countless industries, including everything from advanced software engineering to persuasive writing and sales.
Relationships are the trick to finding quality talent beyond offshoring mainstays like customer support, IT, and data entry. Local partners or senior leaders with access to wide networks of high quality candidates can increase your options dramatically.
Concern 3: Close management will be needed to prevent errors & provide direction.
Many believe they’re just buying themselves more work with offshoring. They think they’ll spend so much time reviewing and correcting issues that the potential benefits aren’t worth it.
Fortunately, that doesn’t need to be true. In the right countries with the right partners or relationships, you can hire senior managers with relative ease. Some companies are even employing offshore executives. These leaders can run local operations autonomously, allowing you to be as involved or as hands-off as you’d like.
It’s critical to choose your in-region leadership and/or staffing partner carefully though. It can be very difficult to bring onboard the right staff without deep connections in the region.
Well connected senior operations leaders in-region will immediately bring with them their large networks of top talent. Lower quality leaders will fail to attract talent, or will refer in weaker teams that build their own weak teams.
Similarly, top-tier BPO companies provide thorough screening and hire talent with strong backgrounds. They’ll leverage their extensive networks to quickly source top talent with proven track records. Many weak or predatory firms will instead simply try to sell you low quality talent at a high price.
Concern 4: Offshoring exploits low-cost labor.
To be fair to critics, this is a complex issue and there is no simple answer.
But once you start looking at cost-of-living and the long-term impact of offshoring, it really doesn’t appear to be the exploitive practice some believe it is.
It’s hard to deny that offshoring is lifting millions in historically less wealthy countries out of poverty. Even when companies pay offshore staff a fraction of what they would pay employees from a higher-cost country, they’re often:
- Making more than they would earn at many locally-owned businesses.
- Earning enough to meet their family’s financial needs.
- Even earning enough and building the right connections to eventually leave their country or start their own business.
To illustrate why this works, it’s important to understand just how large the cost of living differences are. Decatur, IL, has the lowest cost of living of any urban area in the United States. Yet compared to the city with the highest cost of living in the Philippines, Manila, many common cost of living measures are 2x to 4x more expensive in Decatur.
Plus, it’s not just about the high paying jobs offshoring is bringing. It’s also the investment, technologies, and commercial techniques of more affluent countries that flow in along with it. Less developed countries can advance more quickly with these head starts, bringing more prosperity.
Concern 5: Time zone differences make it difficult to collaborate
Timezone differences aren’t the barrier many believe them to be.
In countries like the Philippines, it’s becoming commonplace to work the standard daylight hours of higher-cost countries like the United States or United Kingdom. Many employees even prefer it. The culture has adapted to embrace working hours outside of the standard 9-5.
This has led the caliber of talent available to be virtually the same 24/7. Surprisingly, even costs are often only marginally higher for shifts outside of the standard local working hours.
Time zones may also naturally align more than businesses expect. Singapore and Australian timezones aren’t far off of the Philippines, allowing for a significant overlap of the working day. Similarly, Costa Rica and much of Mexico remain on US timezones throughout the year.
Even when working hours don’t line up, asynchronous collaboration has become a standard practice that doesn’t have to hinder progress. Thanks to online project management and communication tools like Asana, ClickUp, Trello, Microsoft Teams, and Slack, teams can stay in sync even when they’re not working simultaneously.
You may also consider following in the footsteps of other companies to utilize the ‘follow-the-sun’ model. Using this approach, responsibility transitions between teams as the workday ends in one location and begins in another. Teams working on a shared project often schedule a hand-off meeting to update their colleagues on progress.
Executed well, both 24 hour operations and the follow-the-sun route can actually improve business outcomes. This is true whether the work is related to customer experiences, software development, or anything in-between.
Concern 6: Offshoring requires business process outsourcing (BPO), leading to bad deals and low control
There are a few elements to this fear that are worth deconstructing.
First, we’ve already mentioned that the right offshore partner can actually help you ensure high quality. And, really, being able to delegate control to a partner or team you trust is essential to achieving effective scale.
However it’s also worth noting that offshoring doesn’t have to mean you lose control of your resourcing. Many companies that offer BPO services are flexible around how closely the client can control the operations.
If you’d prefer to keep complete control of your processes and teams, that’s not a problem. Through a service known as Employer of Record (EOR) or Employer Services (ES), many offshore partners will support the sourcing, hiring, legal, and back-office needs of your low cost country investment while charging on a cost-plus model and leaving direct management responsibility to you.
That cost-plus pricing approach avoids one of the largest concerns about the standard BPO model – that due to their flat rate pricing, these old-fashioned BPOs are incentivized to bring in talent as cheaply as possible. Even as quality suffers, customers feel trapped due to switching costs.
To get the best of both worlds, particularly flexible companies like Catalyst BPX offer hybrid or full service BPO models on a cost-plus pricing model.
For example, they could provide all of the employer services staples along with recurring quality checks and performance optimization. This allows businesses to leave elements they want control over, like process design in this example, to the business. Or they can take on every detail of the operation while providing providing complete cost and pricing transparency.
Once again, success with offshoring comes down your team and partnerships in the region.
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Having more resources available to take over operational tasks, at a low cost and high quality, is what allows businesses to achieve growth and scale. Part of this equation is people, part of it is tools and processes. We help with all of it.
Would you like to learn more about how Catalyst BPX can help your business thrive? Learn more about our services here.
