Offshoring Pros and Cons

There is a particular immediacy to being aware of offshoring pros and cons. No business venture is perfect as there will always be risks and disadvantages that come with adopting new strategies. Offshoring certainly isn’t exempt from this as there are some characteristics to it that people may not find appealing.

While Diversify does champion the process, we also want to be certain that potential clients know what they will be getting with offshoring. Presenting offshoring pros and cons will aid in making what could be a very important and informed decision that could shape your business in 2017. Although it is often closely associated with outsourcing, there are aspects to offshoring that make it a different process.

Offshoring Pros

The advantages that offshoring brings revolve the massive savings that it brings. However, companies that adapt an offshoring strategy are also made aware of how it promotes better office culture and transparency between yourself and your remote team.

offshoring pros
Offshoring Pros

• Access to a vast, talented pool of candidates.

Offshoring to countries like the Philippines means being able to work with some of the best people they have. The BPO industry in the Philippines is particularly strong, which means that many of their talented people can be found.

• Greater transparency as you manage your team members directly.

The biggest difference between offshoring and outsourcing is choosing the right people for the job. Offshoring functions require a very meticulous process that will result in finding very talented staff members you will work with. You will have direct selection and control of who will come on board with you. A good offshoring provider isn’t content with people who are “good enough” and will go the extra mile to help you find those who can help make your business succeed.

• Employees become long term, value adding members of your team.

Outsourcing is often seen as viable for short-term solutions with staff that can change on a whim. While outsourcing puts more importance on the process, offshoring is much more people oriented. By closely working and engaging with your remote team, they are given a chance to show their skills and how they can help your business grow. This results in having dedicated team members that are loyal to you and your business despite not being there locally.

• You won’t lose control of your data or intellectual property.

Your team members will be operating remotely – they’ll be accessing your server to perform their task; this means they are governed by your local IT security settings and cannot do anything outside of these settings. Diversify also has a range of security protocols in place including no phones in the work area, no local saving functionality and the locking down of certain sites in consultation with you.

• More affordable over the long term.

One major outcome that an offshore team can deliver is assisting your business in growing without expanding your overhead and fixed costs. Outsourcing may seem like the cheaper option between the two but in the long run, offshoring gives your business more bang for its buck as you help cultivate staff members instead of constantly rotating between new ones.

Offshoring Cons

Although a beneficial strategy for businesses, offshoring is something that is not for everyone, especially if you are looking for immediate and short term results. Compared to outsourcing, it takes time to implement an offshoring strategy in order to ensure the quality of service.

offshoring cons
Offshoring Cons

• Implementation usually takes longer than with outsourcing.

This is very particular issue when talking about offshoring pros and cons. Because offshoring requires plenty of managerial and direct control from you, implementing it may take some time. After all, offshoring isn’t a “set and forget” process but rather something that will need your full attention and care. Remember that you not only oversee your staff’s management but their development as well. Ultimately, you need to consider if the juice is worth the squeeze – if you’re looking for short-term gains from an offshore program, this strategy might not be for you.

• You need to provide the business process which ideally requires you to have functional and well-documented process and procedures.

If you have specific requests and objectives from your offshore team, it may require additional training. Your business may not have this luxury or may not want to go through with the process of documenting and refining processes and procedures as it can be arduous. Businesses that need more short term and immediate results may refrain from considering offshoring. It is important to note that undertaking a full assessment of existing processes and procedures can deliver many tangible benefits to your business.

• Service quality remains at the clients’ risk.

When talking about offshoring pros and cons, it often boils down to what clients feel is comfortable for them. It’s understandable that people feel apprehensive about working with an offshore team because of their distance. Most feel comfortable working with local staff as they are easier to reach and the quality of work can be quickly assured. On the other hand, if you believe in the skills of the offshore team that you selected, this may not be a considered a risk.

Overall, offshoring will depend on what objectives you are looking to accomplish. Understanding offshoring pros and cons will then help you know what you need to consider. It may not be what your business needs if you want more immediate results that don’t require your full attention. However, if you see yourself wanting to collaborate with a team that you will develop to function like a well-oiled machine, then offshoring is something to consider.

Interested in getting started? You can drop us a line today to see if you are ready for to take on offshoring.


These three offshoring trends could define Australian workplaces in 2017

Email a step closer to the grave, novel engagement techniques for millennial staffers and a focus on managing remote teams.

These are offshoring trends of 2017 and beyond that are likely to impact businesses, according to the CEO of national offshore solutions specialist Diversify, and former Big 4 HR and people manager, Angela Vidler.

“The greatest challenges facing businesses are the global labour market, how to increase revenue without blowing out fixed costs, and maintaining an engaged and empowered workforce,” Vidler said.

“From these challenges we see trends emerging that are changing the makeup of your average Australian office.”

Trend 1: Goodbye email and office hours

With the growing number of millennials in the workforce, “old” technology such as email is losing favour as young people prefer instant messaging and a range of live chat tools such as Slack, Campfire and Yammer.

“These tools make it far easier to be collaborative. And it’s not just millennials moving in this direction. We’ve all been on the end of an unproductive email chain, and workers of all ages are recognising the inefficiencies of email,” she said.

Changing workforce demographics has also seen a rise in millennials working part-time because work is not seen as the defining element of their lives.

Business leaders will need to provide flexibility in working arrangements to accommodate this change.

Trend 2: Cubicle karaoke, chopstick M&Ms to the Mannequin Challenge, whatever it takes for employee engagement

“More than ever, smart companies are focusing on improving the employee experience, to stay competitive in the job market. Younger employees have a different perspective on their career. They don’t want a hard slog, they want their workplace to be fun,” Vidler said.

“We’ve seen everything from cubicle karaoke or a flash mob of a Friday afternoon, to collecting M&Ms from a bowl with chopsticks used to raise morale and decrease office stress. Of course, there are less out-there techniques for maintaining employee engagement (including acknowledging efforts and strengthening health and wellness programs), it’s whatever works within the culture of your organisation,” she said.

In between daily tasks, Diversify recently filmed their own version of the Mannequin Challenge

Trend 3: Flexible workforces – so many options

There’s no denying the growth of the “blended workforce”, a mix of full-time permanent employees, part-timers and freelancers. Forbes magazine recently cited the blended workforce as the key HR issue for the coming year.

“The growth of freelancing in many industries, along with a move by employers to allow trusted employees to work from home, makes for a very disperse workplace,” Vidler said.

“Whether people are hot-desking, or working from home, or working while travelling, it highlights that one of the critical management components for businesses is the ability to manage remote teams.

“When you add to this a growth in companies offshoring parts of their workforces, managers face many challenges in creating cohesive, engaged teams,” she said.

Vidler said it was important for businesses to have cost-effective, sustainable workforce solutions so they are better equipped to scale up operations and allowing local employees to focus on growth-related not process-driven activities.

This is the focus of offshoring, as opposed to outsourcing. With offshoring, the offshore employee is a true part of the business and identifies as a team member, with the employer playing a role (often through a third party such as Diversify) in recruiting and managing the employee to integrate them into the business.

“Success is a mix of the right people, right skills and right culture, connected by the right technology enabling a global workforce,” Vidler said.

“Adding offshore teams to your workforce is one way businesses can grow revenues without increasing fixed costs. This enables a business to hire very skilled offshore employees who are provided full support in a serviced office.”

Diversify is always looking ahead and has long considered offshoring as a major trend of the future. If you are interested in making it part of your business strategy, drop us a line today to get started.

This article was originally written by Nye Longman and appears in Business Review Australia.