Common Concerns When Offshoring and How to Fix Them – Part 1
Offshoring is a relatively young industry as it has only been around since the 1990s. However, the impact of this practice on the strategic adaptation and development of multinationals has been both significant and controversial. Some corporations gain major competitive advantages from offshoring, and rocket to lead in their respective industries while others simply get lost in the maze. In this series, ASW Global will help you identify common concerns when offshoring and how to fix them to conquer this beneficial practice.
Scenario 1: My company has decided to go offshore but the local staff isn’t very happy. There are rumours that significantly affect their spirit and productivity.
Challenges appear even before you actually go offshore. Years of outsourcing jobs have left a misconception that when a company goes offshore; it is replacing local staff with cheap labour in a distant country. That’s why your local team feels threatened and does not advocate offshoring. Left unmanaged, these rumours can lower your team’s spirit and urge them to leave the company.
Possible Solution: It is advised to clarify all the confusion and wipe out these rumours, whether it be via email or a town hall meeting, before you recruit the first offshore staff. Educate your local staff that the offshore teams are here to help them balance their workload, increase productivity through the division of labour, not to steal their jobs away. Indeed, the offshore staff are an integral part of the team in all aspects, except for sharing the same pantry!
Scenario 2: The laws and regulations here are completely different in our country. Legal concerns keep popping up and take all my time while I should have taken care of the business.
This is among the most long-standing obstacles for any company attempting offshoring for the first time. Even when you choose to operate in countries with English common law foundations like the Philippines, discrepancies do occur and may trap you into unnecessary legal issues. That is not to mention the undocumented, unofficial code of conduct you have to follow to transition your operation smoothly.
Possible Solution: There is a saying which is “let the expert do the expert things”. The most practical solution is to seek partnership with an offshore service provider who can help you throughout the setup, as well as the operation. They have experience doing business in the destination country and easily deal with all the legal confusion, allowing you to build and develop your offshore teams – the main purpose of your company.
Scenario 3: The transition seems to take forever. I don’t know when my offshore team can actually come into full function.
That’s why in the beginning, offshoring could turn out to be a huge maze. The process is not always as simple as Recruit – Set up – Transfer without detailed preparation. You’ll probably end up having your offshore teams doing tasks you do not plan to, or the procedure gets lost, confusing both the local and the offshore staff. The practice stays forever at the beta stage without any clear development path.
Possible Solution: Offshoring is not a “set and forget” decision. If you want your offshore teams to come into full functions, you have to first list out what the delegated functions are. Training is imperative in successfully building your offshore team. Constant interaction with your offshore team will speed things up in the initial stages but also touching base regularly keeps staff morale high in the offshore operation. Consider offshoring as a project with master plans, timeframe, personnel and you will not be stuck in the transition phase. In case the path is still vague, you can always seek advice from experienced players in the industry.
Scenario 4: There is no collaboration among my offshore and local teams. The workflow easily gets halted and I need to fix it as soon as possible.
The reason for no collaboration is the lack of communication between teams. Face-to-face interactions are restricted by both the geographical distances and the cultural barriers. Yes, you heard me right! A common code of conduct in Australia may mean differently in Malaysia; and Vietnamese staff sometimes take instructions in an unexpected way.
Possible Solution: Thanks to advanced technologies, you have many tools and platforms for your distributed teams to work on. In fact, we have written about set up offshore teams that collaborate. Besides, you need to encourage interactions among team members, be it through video conference, onsite training or a workshop. Frequent communication will break the cultural barriers and improve team collaboration.
If these scenarios do not concern you, that’s awesome. However, there are three more common issues in part 2 you may want to consider.