Not sure if outsourcing is right for your business?

Are you looking at ways to evolve your business?

Looking at various means to bring down the cost and increase profit?

Outsourcing is one of the ways you can achieve this.

In this post, we weigh the pros against the cons.

Pros

Let me start by telling you a story about a giant of the tech industry…bear with me for a minute.

Mid 2014: Shareholders very unhappy, CEO is asked to resign. To everyone’s surprise in comes a new CEO, a complete unknown.

Fast forward to 2019

In a span of five years this man has taken a giant company that was lost, to once again become a market force in its industry. This man is none other than Microsoft CEO Satya Nadella.

Why do I bring this up? Well, it has to do with point no. 1, the most important advantage of outsourcing.

1) Lower cost not quality:

By outsourcing you will be able to lower costs without lowering quality. You may be paying 60k per year for a college graduate. You can get one in India for 15k per year.

India is home to some of the best educational institutes in the world. Satya Nadella, the Microsoft CEO studied in India (including his undergrad).

He was fortunate enough to migrate to the US, but these days, the US immigration system is broken and there are a lot of talented people who are unable to migrate.

Outsourcing is a great way to tap into this talent pool.

2) Access to larger talent pool

India is home to more than 15 million engineers and 30 million graduates. For every job posting we get 1000s of well-qualified applicants to choose from.

3) Technology

With great conferencing software such as Zoom, BlueJeans and Skype, as well as access to really fast Internet, technology has made it really easy to work and coordinate with your remote team.

It is almost as if your remote employee is sitting right next to you.

4) You can focus on your core

You can start by outsourcing menial and mundane tasks. Need to call UPS to find out where your package is? You can easily outsource such tasks to a remote employee.

By doing this, your local employees will have more time to focus on their key business tasks.

CONs

1) They are not in the same physical location

A remote employee may take some time to get used to. It’s always nicer to see the people who you work with sitting across the room, and to share a drink after work. An employee who is at the same location as you makes it easier for you to walk up to his desk, have a look at his screen and provide instant input.

With a remote employee, more often than not the primary mode of communication is either a video call or GChat.

Yes, technology has come a long way, I say we are almost 90% of the way towards solving this problem. With facilities like video calling and screen sharing, it is almost as if the person is right next to you.

2) Communication

One of the major concerns is the communication barrier. How good are their verbal skills? How good are their email-writing skills? Do things get lost in translation?

How to avoid this?

The key here is hiring. Only hire offshore employees who have excellent oral and written skills. You can have a verbal test as part of the interview process.

There are also some great training courses on Udemy. By getting your remote employees to undertake them you can bridge the communication gap that may exist.

3) Problems With Quality (Sometimes)

We all love high-quality work, don’t we?

You may feel that by outsourcing you are going to lose control of the process. You may feel that the quality may drop. It needn’t be this way.

There is a very easy fix:

Before you start the process of outsourcing make sure you have a quality metric setup. The key here is not to compromise.

If a remote employee’s work is not up to the required quality, then replace him. Keep looking until you find the ideal candidate (A little patience might be required, but you will find him).

Setting the bar high right from the first remote employee is essential. He is the flag bearer for quality in your remote team; later hires will measure themselves up to the initial employees.

Performance reviews every six months and regular one-on-one meetings are a must.

By providing regular feedback through performance reviews and one-on-one meetings your remote employee will clearly understand the standard and quality of work expected from him.

You should never compromise on the quality of the deliverable.

4) Company Culture

It is harder to instill your company’s culture in a remote employee. Harder but not impossible. It can be done.

Just because they are not in the same location doesn’t mean that they are not a part of your company.

A company’s culture and principles are the glue that sticks together and aligns all the employees of an organization.

It is essential that your remote employees understand your company’s culture and values. It is advisable to share the culture deck on during the onboarding process.

Even better if you can include a culture workshop as a part of onboarding.

5) Longer training time:

Training sessions might be a little harder as you conduct them over video call/screen sharing rather a one-on-one session.

How to fix this:

It is important to understand that your remote employee is from a different part of the world with its own cultures, hence it may take them a little longer to understand your methods and practices.

It is essential that you allocate more time for training compared to local employees. The more time you spend upfront, the more the chance of things going wrong later decreases.

It is very important that the remote employee understands your methods and practices.. It is much easier to train a remote employee during the first few weeks and create new work habits according to your liking than trying to break bad ones two months down the line.

Final thoughts:

Outsourcing has many advantages. At the same time, you shouldn’t underestimate the cons, you will need a rock-solid plan that will help you minimize the risk in order to succeed. This is where we can help 🙂

Outsourcing is a high-leverage activity when done right.

Liked what you read? Now is the perfect time to take your business to the next level by setting up an offshore team in India.

We have helped all kinds of businesses grow, from funded startups who want to develop rapidly in order to capture the market, to small businesses trying to reduce costs.

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