WNA Blog

Mon 16 May 2022

Traps to avoid when offshoring

In The News

Offshoring is considered one of the leading business strategies for companies when considering cost savings. Aside from being a great way to save money, it also helps the business to boost its productivity and achieve business growth. However, many businesses fall into traps when implementing this strategy, due to lack of knowledge and understanding of how to properly incorporate offshoring into their business.

FIRST TRAP TO AVOID: Lack of short- and long-term planning.

One of the common mistakes businesses make when they are offshoring is a lack of short- and long-term planning. Typically, businesses focus on the things that they need to accomplish just to get their offshoring staff onboarded. They do not plan or consider what it takes to make offshoring successful long term. Examples of which are when they do not consider how they are going to train staff, measure performance, embed their culture within their offshore team, build an effective operating rhythm, manage workflow, handle work efficiently and effectively, measure quality etc.

Offshoring is not a short-term process. It requires a good long-term offshoring strategy that will address changes and risks in the operations for it to be successful.

SECOND TRAP TO AVOID: Lack of due diligence on provider.

You should investigate on who the most reputable offshoring companies in the industry are. Look deeply on who they are and make sure you share values and view. This will be a long partnership. A professional offshoring company will be focused on helping you improve your business, processes, procedures and drive efficiency gains within your organisation.

A reputable offshoring company will work for you to identify things that you need to know when offshoring, they should teach, train and guide you thoroughly through the process so you have a thorough understanding of what offshoring involves.

Know answers to the following questions:

– How much does the staff member receive and how much does the offshoring company receive each month?
– What benefits such as healthcare does the offshoring company provide to the employees?
– Where is the office located? Is the site convenient to public transport? Is the site in Metro Manila or in the provinces? Are they in the vicinity of qualified candidates?
– What internet speeds do they provide to staff? What redundancy programs do they have in place? What is their IT set-up for each staff member?
– What data and information security protocols do they have in place?
– What staff engagement activities do they provide staff?
– What training and development do they provide staff?
– What are their annual attrition rates and how do they measure it?
– What are their staff and client engagement scores?
– What real experience do they have with offshoring and offshore teams?

THIRD TRAP TO AVOID: Going with the cheapest option, it is cheap for a reason.

Choosing a low-cost provider doesn’t guarantee you offshoring success. Remember, you get what you pay for and most of the time, this is very true with offshoring.

Normally, low price providers will be there with you for the business relationship and the profit they get from you. They may not guide you on how to successfully run an offshore operation. They may not help you get the best out of your offshore staff and help you drive productivity and performance. Instead, they will just hire staff that may not be qualified for you, pay them, provide limited IT support, then everything else is up to you to manage.

What you should look for is a partner who will truly help you from start-to-end, beginning with the management of the transition to offshoring, to optimising day to day operations, to sharing success with you. They will hire the best and brightest for you that will fit in with your needs and culture. They will show you how they train your offshore staff and will implement a bespoke plan created specifically for your business that will make you successful. From day one you will have an understanding what offshoring is all about and how to make it successful. This is will lead to having your onshore and offshore environment and culture sync.

FOURTH TRAP TO AVOID: Lack of knowledge on what it takes to make offshoring successful.

Many business owners do not have enough knowledge and understanding on offshoring, so they make assumptions, and they miss many of the advantages offshoring provides. Once you realise that offshoring is more than just saving costs, you start to comprehend the positive impact that offshoring can have on your business.

Many business owners believe they to let go of onshore staff that have worked for them for years to successfully offshore. But the truth of the matter is, a reputable offshoring company will show you how to retain your employees by putting them in roles where they are best suited and where you can optimize business performance.

So, let’s say that your onshore employee currently works on reviewing and collating quotes, and making sure these quotes adhere to compliance. If you then offshore this role, these administrative tasks can then be given to your offshore staff and your onshore employee can now move onto doing more client facing tasks such as contacting existing customers and discussing their needs, following up new leads, and offering professional advice.

This solution is win-win for you, your employees and your business. You will be more in control and relax as you will not be making any of your onshore employees redundant. Instead, you will be optimizing them for the tasks that they should be focusing on.

Consequently, your onshore team will become more productive, which in return, will make your business more profitable— a win-win situation for you, your business, and your employees.

Here are the factors to consider in making offshoring successful:

Monitoring Performance

Performance measurement can be overlooked by many businesses as they do not regularly monitor how their staff are working and looking on how improve efficiency and quality. The management can see the numbers and say that the employees aren’t being productive but can’t pinpoint what areas need improvement. Employees’ work can be tracked so you can easily see what areas need improvement.

Without performance tracking methods in place, it is hard to control your staff’s output and measure quality and productivity. You may then have a hard time helping your employees on areas they’re struggling with resulting to hindrance in upskilling them.

To overcome this, your chosen reputable offshoring company should break down tasks, so that your team’s performance can be measurable at regular intervals. This can be done monthly, quarterly or bi-annually, depending on the role. To determine the baseline, the offshoring company will measure your onshore staff’s output when carrying out specific tasks and make sure that both your onshore and offshore team’s performance are aligned.

Training Plans and Knowledge Management

Changing your method or system of staff training can be extremely difficult especially when the business owner is used to and comfortable in the said method or system. If they are hesitant of the change and does not face it with an open mind, they will be pessimistic of the new process and will doubt results.

Not documenting your process and lacking the knowledge to use the applications needed can prevent business owners from training offshore staff effectively.

Having a knowledge repository helps when it comes to training new staff members both onshore and offshore. This acts as a quick guide for new team members easily access information they need.

Cultural Awareness

Establishing a robust culture for your onshore team before you offshore is imperative to success. A good offshoring company will work with you and will gain understanding of your workplace culture which will be helpful when they carry out an analysis of your business ‘practices. They will run cultural awareness training programs for you which will show you what a good work culture looks like and how you can apply this to both your onshore and offshore team.

Business Improvement

Some offshoring companies may be happy to recruit staff and set-up the IT infrastructure but may not work with you in optimising your processes further. Without proper guidance and industry knowledge, their offshoring model may run into problems. Scenarios such as work quality depletion may happen and if it does, ideally, your offshoring partner should be able to provide you with a process map to plan process improvement and achieve your offshoring and business goals.

Interested to know more about offshoring? Talk to our offshoring experts at Intogreat today.

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