Five Offshoring Myths I've Witnessed and Strongly Disagree With
I've heard a lot of people talking about offshoring and some of the bold statements and tantamount to myths and I strongly disappear with many of them. Here's five to start some discussion!
Published 30 Sep 2016
Offshoring is often discussed with looks and words of distrust and doubt, and in some circles even considered a bad word. These attitudes and opinions are embedded in managers and staff alike, where they have either directly been involved in, or, heard of offshoring failures. I'm sure there are examples of offshoring initiatives that failed despite the organisation putting in the appropriate time and resources, but in my experience, there is always a direct symbiosis between the organisation's efforts and the success of their offshoring initiatives.
In this article, I will discuss and provide my thoughts and opinions on some of these myths from my own experiences.
One... Offshoring is about "moving" jobs overseas
Interestingly, the majority of the people I have talked to about offshoring hold similar ideas and objectives for their offshoring initiatives and rarely do they include directly moving existing positions overseas. For most their objectives revolve around;
- Growing the organisation in a cost-effective way, that is, adding new positions overseas, rather than moving or replacing existing positions
- Accessing talent that may be either unavailable or highly sought after in local markets and therefore difficult and costly to recruit and maintain
- Leveraging off of time zones and possible shift work for business or customer support purposes
While some organisations do "move jobs" this is not so common in small to medium enterprises that I have engaged with over the years.
The simple, sometimes hard to swallow truth is in markets such as Australia, many organisations would not be able to grow and expand their businesses to meet their organisational objectives fast enough to gain and maintain a competitive advantage over their competitors.
Offshoring provides as an effective, scalable and viable strategy to achieve business objectives and grow to drive further expansion of the business, both within the scope of the offshore operations, but more importantly, it will often lead to faster local growth as the required goals are kicked.
Two... Offshoring means losing control
Many organisations, managers and/or staff fail to recognise that offshoring if done appropriately, is at its core a managed service. For those not sure what that really means, your offshoring supplier will provide you with a resource that is ready to work, usually including; a desk and PC, IT infrastructure and human resources services.
At this point, it's completely your responsibility to manage that resource. You should not only expect; you should demand the level of control you need to make the initiative successful. In my previous offshoring initiatives, I have managed a wide range of job functions including; management, development, support, and business administration and always ensured that I retained control of;
- Staff induction (company specific)
- Alignment to organisational culture, values and team expectations
- Training and professional development
- Work delegation and day-to-day tasks
- Performance management
- Key performance indications
- Development plans
- Base salary and increment discussions
If a supplier was suggesting that they take ownership of any of the above, I would be highly dubious and would only relinquish such controls where I was 100% sure and comfortable that they were going to deliver to your ethical and professional expectations.
Three... Offshoring delivers poor results
I met an Australian businessman named Peter, in an airport lounge earlier this month. This was one of the rare occasions that I was busy typing away or reading a book, and as such we actually got to talking. When I explained the types of services I provide he gave me one of those all too familiar "sceptical" faces and said that he had tried to offshore his bookkeeping to India but that it was a complete failure. I was a little surprised as bookkeeping is one of those very commonly offshored functions in businesses, so I quizzed him a little. This is how the conversation went;
Me: "Oh really? What were the problems that you faced?"
Peter: “Well the girl just didn’t do anything right” (at this point I was already getting the impression that Peter wasn’t much of a details person)
Me: "I'm wondering how much time your company spent with her for induction? Was there training provided?"
Me: “Sorry I mean did your business invest any time if educating her on your processes? Did you bring her into your team officially?”
Peter: “Well the local accountant would have done that”
Me: “Hmm I see, and what about communication? How were her tasks given to her?”
Me: “They are people you know? They need guidance and support. They should be treated no differently than any of your local staff”
Peter got himself another drink and didn’t really talk much more. Thinking back to our conversation now, I don’t think I was being rude, but in many ways, it highlighted just how blindly people go into these strategies sometimes. I’m a firm believer in providing people with the tools and knowledge to succeed, and it sounds like this organisation failed their bookkeeper in epic fashion.
However, I should get back on point, offshoring absolutely can deliver poor results, but I don’t blame those new team members (unless it’s a genuine performance issue of course), I look to their leaders and managers and would challenge them to show that they have put appropriate amounts of time and energy to set the initiative up to succeed. When you do that, your chances of success in the initiative increase significantly of course and you will have a team of effective, willing and able staff that can help your organisation realise their objectives.
Four... Offshoring is just handballing tasks to someone else
For those who don't recognise the term handball, this is an Australian Football term that is the passing of the ball through the use of a closed fist to another player (if you're not following check out this video). However, within the context of business or management, it represents handing responsibility of tasks or functions to somebody else, but in a poor and ineffective way. A way that, perhaps without intent, sets the receiver up to fail. Some may look at this definition and think "delegation" or even "empowerment" but if you do, you are absolutely, unquestionably, unequivocally wrong. Both delegation and empowerment do not remove the benefactor from responsibility, nor do they absolve the benefactor from giving the receiver the tools and knowledge required to complete the tasks or responsibilities successfully.
When you are dealing with offshored staff, it is as important, if not more, to provide guidance on their job functions. Depending on the type of role, as their experience and knowledge grow they may become self-sustained, but even given that, they are part of the team and should be treated as such. Could you imagine being in a role, where you have a desire to help, to add value and provide great outcomes for the business and/or customers, but you are working in isolation, with little to no communication and always hunting for work to do? I personally would absolutely hate that, even though I have met many people over the years who would probably love that type of role. For me, the person is more important and I would want to talk or engage with people.
There really is no real way to “handball” tasks and responsibilities effectively, I’ve seen many people who are masters of the craft, but that’s about them avoiding responsibility rather than a genuine strategy to collaborate and improve the position of the business and its staff.
Five... Offshoring staff aren't treated ethically or fairly
This is something I have heard a lot, usually from people actually don't support the offshoring initiative anyway. It is true that there are organisations that operate in ways that are, in my opinion, unethical, however, none of the offshoring suppliers I've engaged with act in this way. That's because through the selection process you should be vetting these organisations thoroughly, talking to reference customers and asking hard questions.
My first time offshoring, I tried to meet prospective suppliers from Malaysia, Singapore, India and the Philippines. When I queried these suppliers on the conditions of future staff and team, if they were not 100% transparent, they were crossed off the list. I had organisations that simply stated that they “don’t expose the resource to our customers” which told me they didn’t understand the most effective offshoring practices, where those “resources” work with their company, not for them.
This really comes down to your supplier selection processes and due diligence. Go and visit them! See where your team will be sitting. Understand the benefits they will receive through their package. Even offer additional benefits that are not be offered by default and challenge your supplier to improve and grow with you. Don’t be afraid to tell your suppliers what you expect and be willing to back that up with money where it will improve the culture and increase your staff retention.
More and more organisations are exploring offshoring initiatives as a way of supporting growth and reducing costs, but there is often a lack of awareness about how best to execute on these strategies or a false belief in the myths above. Breaking some of the perceptions and attitudes related to the above myths could be the difference between succeeding in these initiatives and either failing or never kicking them off.
I implore you to review the five steps on our homepage that I have documented to better understand the framework used to ensure success in both the initiatives and meeting your business strategies and objectives.
If you would like to discuss any of the above or provide me feedback, please feel free to contact me via LinkedIn or through this website.