The Five Ps of Offshoring

There’s a lot that has been talked about with regards to how offshoring can be beneficial for any business. And why wouldn’t there be? Working with a remote team is predicted to be a major trend for Australian companies in 2017 and those that aren’t able to adapt quickly may fall behind the rest of the pack.

However, you might still be put off by offshoring because, from the outset, it seems complicated to take all the concepts presented at the same time. Offshoring is by no means a new concept, but it is understandable to feel hesitant about implementing it, especially if offshoring has just been presented to your business as a viable strategy but without any prior knowledge about it.

To get an immediate grasp and understanding of what offshoring is, you can look at “The five Ps” that make up its fundamental basis. Businesses can be more aware of what implementing an offshoring strategy actually entails and how much management needs to come from their end as compared to something like outsourcing (Hint: It’s a lot).

Pricing

Offshoring, at its heart, has always meant massive savings without increasing any overhead. By hiring a remote staff to be part of your company, you can get excellent quality of work – or even better output- by having them perform functions outside your local team and at a lower cost. On paper, this looks as if offshoring’s main purpose is to replace local jobs. However, this has been debunked; evidence demonstrates that offshoring processes or labour intensive functions can lead to the creation of more roles locally. By offshoring lower to mid-level functions, more doors open up for your local staff professionally – they can upskill and contribute at a higher level.

Place

The location of your offshore team matters but it is also something that is overlooked. Countries like India and Malaysia have often touted themselves as being the best location to scout for an offshore team. However, Diversify has always maintained that the Philippines is the definitive offshoring location. Geographically, the Philippines is much closer to Australia than most other countries that are viable offshoring locations. With only a two hour time difference between Australia and the Philippines, teams from both sides are able to interact at their most convenient time.

It should also be stressed that while considering the country you will offshore to is important, choosing the right the city or region within it also needs careful consideration. In the Philippines, Metro Manila is considered the ideal location as it has access to the country’s best infrastructure and its most diverse talent pool.

People

When talking about a country’s talent pool, you are referring to the workforce that makes it up. The ones who make up your business are those who will help drive it to be successful. This is why Filipinos are considered some of the best people to have on your offshoring team. Many of them are highly educated and with a 94% English literacy rate in the country, connecting and engaging with them will make your offshoring experience an easy one. This also means knowing the right people who can gel and connect very well with your local team.

Participation

So how do you find these talented people to be part of your offshoring team? By being heavily involved with the recruitment process and knowing who you want. While outsourcing means leaving the recruitment responsibilities to an intermediary, offshoring requires a more direct managerial approach to deciding on who will be hired. The process is much longer and can involve setting plenty of requirements on your part, but being able to hire “the best among the rest” will no doubt be a good long term solution for your company.

Pathways

As seen in all the previous points, offshoring’s most defining characteristic is how it puts a premium on the importance of staff engagement. Because you meticulously pick who you want as part of your team, you not only directly manage their functions and roles within your company, but you also help steer their professional development as well. By being able to assist in shaping their careers and also furthering their skills for different pathways, your offshore team can become all-around staff members you can rely on and retain.

Of course, there’s a lot more to offshoring than these five points. Like with any new venture, there are risks that come with offshoring that you can curtail and address swiftly if you have a proper strategy in place. Depending on your objectives, offshoring may not also be what you are looking for and a short term, less managed strategy is what you may be after. However, it is important to summarize the basics of offshoring and what potential advantages it may bring for you once you have a team and strategy in place.

Want to give offshoring a chance? Contact us today to get started and see what your business can do.

Share this post on