Debunking the myths about SME offshoring

A good reason for business offshoring: Savings gained from having a low-cost offshore staff could be invested in new projects or research and development that would otherwise have been beyond your budget.

From the telephone to computers to small business offshoring, misconceptions have always developed about any new business practice, until enough organisations get firsthand experience and realise what benefits are on offer.

For example, look at the global media organisation that initially banned its journalists from using the internet because management wrongly saw it as a distraction rather than a useful workplace tool.

And so it is with white collar offshoring. SME owners are approaching us to learn more about what offshoring entails. Time and again, a list of the same issues that worry them came up.

Here are some of the most common myths we hear about offshoring:

Myth: My business is too small to benefit

Scaling up a business means expanding facilities and increasing fixed costs. Offshoring allows small enterprises to grow without massive overhead. Savings gained from having a low-cost offshore staff could be invested in new projects or research and development that would otherwise have been beyond your budget. The smallest business we’ve helped offshore is a medical practice with just a few staff. Offshore staff cost between 75% and 80% less than in Australia, allowing a small business to reduce costs effectively while employing capabilities competitors can only dream of.

Myth: I don’t have time to implement

Offshoring can seem like a daunting process since it involves communicating with a remote, overseas staff base. An experienced offshore provider will work with you to define your staffing needs, set a budget, develop a staffing plan, set up IT, recruit the best fit of employees and align both the offshore and Australian staff. They will also give ongoing support to boost the morale and to manage effectively the offshore team.

Myth: It means losing out on Australian jobs

In our experience, clients use offshoring not to decrease their local staff numbers but to help them grow. Offshoring does not take away jobs from the local sector. It allows your Australian team members to deliver more value while taking away the burden of more process-driven tasks. In most cases, it leads to local job creation, often in different roles.

Myth: It’s only suitable for low-level jobs

Many people associate offshoring with annoying overseas call centres but that is not what white collar offshoring is about. A number of providers, including us, focus on white collar roles and do not offer call centres. We offshore to the Philippines, which has excellent literacy and English skills, a highly educated population and a similar culture and timezone to Australians. The Filipino labour force has highly skilled workers including 400,000 annual graduates, half with specialised degrees ranging from business administration to marketing and communications.

Myth: I won’t be able to keep track of staff

Transparency has always been the biggest difference between offshoring and outsourcing. When forming your offshore staff, you have full transparency and control over your team members, from recruitment to remuneration. This leads to an offshore team who feels motivated to work for you and very much part of your overall team.

I hope this has dispelled some of the main misconceptions about offshoring. That’s not to say that it is a process without risks. In my next article, I’ll outline the main risks and how to overcome them.

Angela Vidler, CEO Diversify

This article was originally published in Inside Small Business on August 2016.

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