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Common mistakes to avoid when offshoring

Adam Zuchetti
Adam Zuchetti
15 December 2016 1 minute readShare
Golden arrow highlighting the right way to go

There are many reasons why businesses consider hiring overseas-based employees, but you should avoid these common mistakes and misconceptions to help the process run smoothly.

Overlooking unique costs associated with offshoring

One of the biggest mistakes SMEs make when investigating the option of hiring offshore workers is to simply compare wage costs.

There are a range of additional costs involved in the process that need to be factored in for a proper comparison of wages bills to be established. These include:

• Brokerage or consultancy fees if you use a local service to recruit and oversee those workers;
• Leasing new office space;
• Provision of equipment and services;
• Flights and accommodation for you to recruit and engage with employees.Golden arrow highlighting the right way to go

Thinking offshoring is only about cost-cutting

You may be surprised to know that SMEs make up a large proportion of the businesses that operate offshore teams. And, contrary to popular belief, the major reason for this is not just cost-cutting, but also expanding faster than would otherwise be possible.

This comes down to the fact that many businesses either can’t afford the wage costs to hire someone locally, or – as is an increasing problem in Australia – struggle to find local staff with the required skills.

Only considering virtual assistants as outsourceable

“I guess a lot of the time people aren't fully aware of the extent of which roles ... can actually be outsourced. A lot of people think it's just the virtual assistants or someone like that,” says Joe Curran, of Manila-based employee leasing company KMC Solutions.

“It actually goes much further beyond that to a lot higher value roles or more [white-collar] type work.”

These include a range of technical support, lead generation and sales, data entry, web and digital development, SEO analysis and compliance roles.

Thinking offshoring is small fry

Offshoring doesn’t mean hiring an unskilled labourer working out of a tin shed with nothing more than an intermittent internet connection – far from it.

In fact, in many parts of the world offshoring is big business.

“Today [we’re] looking at about 1.3 million people directly employed in outsourcing, contributing almost 10 per cent of GDP to the Philippine economy,” Joe explains.

“It's become a very important aspect of the growth of the economy here over the last decade. That's only the 1.3 million people directly employed. All the ancillary effects of that in terms of residential, in terms of retail, in terms of hotel occupancy: there are so many knock-on affects as well from outsourcing.”

He adds: “[KMC Solutions] currently manage around 6,000 desks here in metro Manila.”

If you would like more information on offshoring, please complete the form below:

For more insights on the process of offshore expansion, check out the My Business Podcast now!

Common mistakes to avoid when offshoring
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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