Four Common Mistakes When Offshoring/Outsourcing

Most businesses consider the use of an offshoring staff because of the significant savings, particularly on salaries, which can be achieved. The savings are sometimes passed through to the bottom line or, more commonly, used to add additional organisational resources to grow the capabilities and capacity of the business.

While there are significant financial benefits that can flow from the use of offshore staff or outsourced labour, taking an overly frugal approach to how your strategy is implemented and not investing in the time to do things properly is more likely to cost rather than save you money in the long run.

No/ineffective change management strategy

Considerable thought needs to be put into how your offshoring strategy might affect your local staff and how you will communicate the strategy to them. Failure to get this right can result in local staff turnover and significant resistance to the implementation of your offshore strategy. Decisions around whether staff will be made redundant with their roles being offshored or whether an organisation will simply look to add additional resource to offshore need to be made early and communicated clearly to staff to avoid uncertainties.

Lack of cultural awareness

Don’t underestimate the consequences of failing to understand cultural differences. Any effective offshoring strategy should include training programs aimed at both raising awareness of local staff to the cultural nuisances of the offshore team and likewise educating the offshore team about local cultural peculiarities. Essential to bridging this cultural divide is effective and frequent communication. Usually, video conference style communication will be far more effective to develop an understanding, as a significant amount of the message being communicated will be from non-verbal body language cues.

Rushing it

One thing that can almost certainly be guaranteed with any outsourcing or offshoring plans is that there will be teething issues. For this reason, it is important not to rush the process and to take your time to gradually develop an understanding as to how things best operate and over time, grow the depth of your offshore or outsourced team.

Along the way, it is important to manage the expectations of all stakeholders, including staff. If staff and other parties involved in dealing with the offshore or outsourced team are told from the beginning to expect difficulties and delays, it is far more likely that they will provide you the time and support to resolve these issues when (and if) they occur.

Lack of support from local staff

If your first step is to make staff redundant and move their roles overseas, you may find it difficult to win support from your local staff for your strategy. Alternatively, if your first step is to add offshoring resources to free up bottlenecks or add functions that you cannot afford locally, you will be far more likely to receive this support. In addition, looking to bring your offshore team members to Australia at the earliest opportunity to meet staff will assist greatly with local acceptance of those staff.

At the end of the day, significant benefits can be enjoyed from a well-implemented offshoring or outsourcing strategy. However, focusing on the cheapest possible approach to your offshore plans and not spending the time and money necessary to ensure that things are done properly will not only cost you more money in the long run, but also likely lead to the failure of your offshoring strategy.

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