Why most companies don’t save as much as they should when outsourcing

Outsourcing is a great way for businesses to cut back on costs and make significant savings. Most experts will tell you that businesses can save up to 70% off regular staffing cost by establishing offshore teams, however, the sad reality is that many businesses don’t end up saving that much. 

Why? Well, because outsourcing only saves you money if it works. 

When you set up an offshore support team in a country with a developing economy, you will automatically save money by reducing wages. Successful outsourcing is not, however, about reducing wages alone. It’s about building a high-quality, efficient workforce that delivers real value. 

If your team isn’t performing, then the cost savings that you make are just being thrown away. 

So what goes wrong? 

In our experience having worked with hundreds of businesses to help them set up outsourced support teams in the Philippines, there are a number of common mistakes that companies make when building their offshore teams. 

The three most common reasons why businesses don’t save as much as they should when outsourcing

  1. Choosing the wrong provider
  2. Not integrating offshore teams with the local workforce
  3. Poor communication

Choosing the wrong provider

Outsourcing is not a one size fits all type of operation which is why it’s so important to invest time into researching different outsourcing providers to find the one that really fits your needs. 

When choosing who to partner with, it’s imperative that you find a provider that understands your business, shares your corporate values and truly cares about your success.

It’s also important to consider what added value a provider can add to your business. If the only thing an outsourcing partner is offering is ‘cheap staff’ then we would recommend staying well away from them. Top providers will offer you so much more. 

Look for an outsourcing provider with experience in your industry and with the support systems and networks in place to help you and your offshore team. Don’t be afraid to ask: “What services can you provide to help my business?’. 

A reputable provider, such as Cloudstaff, will be invested in your success just as much as you are and be able to provide you with access to top industry professionals to help you set up your teams and workflows, as well as tools and software platforms that make remote working simple. 

Not integrating offshore teams with the local workforce

If you want your outsourced team to be successful and deliver maximum value to your business, then they need to become a genuine part of your business. 

Remember, your remote team is there to support your operations and to support your local staff, and as such, they need to be integrated with your onshore team. 

When your offshore team feels that they are genuinely a part of your team and understand the wider goals that your organization is working towards, the benefits are enormous. You will see higher levels of engagement, productivity, loyalty and staff retention.  

Achieving this level of integration does, however, require effort on your behalf. When you bring on new staff locally, they can quite easily see how others are working, ask questions, take in the company culture, and strike up conversations that help build working relationships.

When working remotely, all of these things are still possible but it is important to have the right systems in place to make them accessible. 

We strongly recommend including your onshore staff in the training and onboarding of your offshore team as much as possible. It helps everyone to get to know each other and ensures that all staff are on the same page with updated workflows and communication methods. 

Likewise, we also recommend looking for other ways to facilitate team integration. Some suggestions might be starting meetings with a few minutes of friendly chat before getting down to serious business; including contributions from your offshore team in company newsletters; online team building activities; and visiting your offshore team in their home country when possible. 

Poor communication

Effective communication is the key to successful outsourcing. We can’t stress this enough!

When outsourcing fails or doesn’t live up to its potential, you can almost guarantee that poor communication was a major factor.

If you want your communication channels to be effective, there are a few things you need to take into consideration. 

  • The platforms you use to communicate
  • The frequency of your communication
  • And your style of communication. 

Let’s start with the platforms. Businesses these days are spoilt for choice when it comes to communication methods. Email, phone, Zoom, instant message, and task management platforms such as Slack, Asana or Trello are all available. When it comes to outsourcing, however, video conferencing is king. 

So much of our communication is non-verbal so when delivering project instructions and explaining things, using video platforms such as Zoom or Skype is by far the best option. Emails and messaging platforms are good for providing follow-ups for video calls, but we do not recommend using them as the primary means of communication with your outsourced team. 

As far as the frequency of communication goes, we recommend scheduling daily huddles every morning at a minimum. They only need to be short and to the point but they keep everyone on the same page, focused and in touch. 

When working on-shore this might not be as important. People know their task and just get stuck into them, but when working remotely it can be very easy to feel out of sight and out of mind so having quick daily meetings can be very beneficial. 

The final point about communication style refers to considerations that need to be made for cross-cultural communications. 

While your offshore team members might have excellent English, you still need to be mindful about the terms and expressions you use. As much as possible, avoid using slang, colloquialisms, and local cultural references as you will likely just confuse your staff which can sometimes cause unintended consequences. 

 Looking for other outsourcing tips and strategies? 

Cloudstaff’s outsourcing experts are always available to help. We’ve been setting up offshore teams of outsourced staff in the Philippines for over 10 years for companies of all sizes. From helping you get started to fine-tuning high-performance teams, we are always happy to share our experience with you. Speak with us today.