The offshoring and outsourcing industries started as a small-scale sector dedicated to application development, accounting, and payroll. At present, it has expanded to several industries globally.

  • Offshoring to countries like the Philippines, India, and Vietnam has become a standard business strategy.
  • The model comes with its own set of challenges. If not avoided or resolved, the offshore strategy may result in significant business losses.
  • Hiring experts and professionals in the field can help your company grow by helping you get ahead of various outsourcing and offshoring challenges.

 

Establishing and managing a business with offshore teams abroad has always been a complex challenge.

The offshoring sector started as a small-scale sector dedicated to application development, accounting, and payroll. At present, it has expanded to several industries globally.

There are a lot of factors contributing to the complex nature of the offshore model. With the right approach, the offshoring and outsourcing industry can yield many benefits for a business.

 

Common Challenges in Managing Offshore Teams

In many ways, offshoring to countries like the Philippines and Vietnam has become a common business strategy.

Following the latest innovations, there are several industries that drive economic growth. Yet, the model comes with its own set of challenges. The offshore strategy may result in significant business losses if not resolved.

As a business owner, you should take note of the common challenges experienced in managing offshoring teams. Here are some challenges and tips to keep in mind:

1. The quality of output from the offshore team is lacking

This may not be news, but an offshore team’s output cannot always be precisely what a company is looking for. Several factors may explain this. The remote team could still be adjusting, or its internal makeup might be changing too frequently.

In addition, proper standards may not have been set or communicated. If this continues, everyone will carry out their tasks in ways not approved by the company. The quality and uniformity of outputs may suffer and affect the company branding.

 

How to Overcome Poor Quality of Outputs:

  • Aim to decrease staff turnover.

Building a more stable team by effective management of human resources is one of the top solutions for this problem.

Proper rewards systems or communication channels can engage your workers in specific processes more regularly. On the other hand, high staff turnover may have adverse effects on overall productivity and product quality.

 

  • Properly set reachable standards and expectations.

If changes are unavoidable, it is better to establish a technical template that can be accessed by anybody in the team. This can set expectations for the kind of output needed. Plus, everyone will most likely stick to them.

 

  • Set an evaluation process where everybody can learn about the project more.

It is ideal for a team to have someone who can work for quality assurance. If this is costly, setting a schedule or a feedback system would continuously improve the quality of outputs as well.

In addition to this, every member must understand that it is best if their outputs are reviewed before they get sent for a more thorough review.

 

2. The offshore team is unable to meet the deadlines set

This problem is often connected to the previous one. Yet, there are also other factors that can lead to ever-shifting deadlines.

For one, an offshore team may feel overwhelmed either because they are new or are drowning in too many requirements. Miscommunication about the deadlines set will also cause mismanaged expectations.

 

How to Overcome Missed Deadlines:

  • Avoid putting overwhelming requirements on your team.

As much as perfection might be the key, too much pressure and forced motivation may result in a more mediocre quality of outputs. Always be prepared to reduce the scope to core concepts. The rest can be added later.

 

  • Every team member should agree that the time is enough to finish an output.

Everyone should be included in the estimation process of schedules and deadlines. Regardless of the technique to be used, this is the best way to produce a more accurate estimate of deadlines.

 

  • If your team is new, give them adequate time to adjust.

It takes around 2 to 3 months for new teams to adjust to the style of work a company does. On top of this, they also need to be familiar with the services they have to offer, the products they need to sell, and the relevant technologies they will be using at work.

 

  • Gather your team and identify how you can practice risk management.

This is important since unforeseen risks can make projects stagnate for months. The entire team should be able to identify risks and the corresponding contingencies that should be made.

Risks involving third parties require the most attention. External parties cannot be directly managed, especially when they are your clients. In some cases, however, Service Level Agreements can be reviewed to get to the bottom of the issue.

 

3. It is challenging to keep track of the progress of the offshore team

Measuring progress can be ruled by inconsistencies in both schedules and evaluation standards. To successfully do this, it is necessary to keep the offshore team onboard with the rest of the company.

The offshore team is a vital part of your operations and forms the foundation of the business. If left unmanaged, problems on team integration and projects will pile up. This will cause more serious problems in the future instead of promoting development.  

Working remotely gives the team more flexibility. Yet, it can easily lead to organizational problems when they are left to do tasks without proper guidance.

 

How to Keep Track of the Offshore Team’s Progress:

  • Develop a clear communication strategy.

If your team is small and under the same roof, communication should not be a problem. However, offshoring means having a distributed team. This entails well-documented internal agreements and communication processes.

A strategy made available to everyone can help. It should clearly state the meeting schedules and the channels and tools for communication. Introducing them to the organizational structure of the whole team will make it easier for them to contact someone if an issue occurs.

 

  • Learn how to use the right tools to communicate.

The market provides many tools for communicating. These include applications for video calls, instant messaging, sharing of documents in real-time, and even for plotting the company calendar.

In terms of tracking and reporting, applications like Trello and Bitrix24 are growing more popular among remote workers.

 

4. Cultural differences between the home and offshore teams can affect the overall workflow

Traditional and customary differences among the members of the company are inevitable. Managing teams with members who grew up in different environments can affect the dynamics of your workplace.

Once these differences serve as cultural barriers, they should be immediately acknowledged. Even the smallest cultural difference can have a significant impact on relationships at work – from the basic courtesy practices to how work is done.

For example, Vietnam scores moderate in terms of language proficiency. While this is a great score, metaphors and other cultural references could not be fully understood by Vietnamese locals. This can easily lead to miscommunication.

 

How to Overcome Cultural Barriers:

  • Simplify your communication channels.

There are greater chances that members of the offshore team abroad are not fully fluent in your language. The best thing to do is to use basic vocabulary and be straight to the point. Avoiding metaphors and being very clear with directions will also help.

 

  • Conduct a culture raining for both home and offshore teams.

This will help both the offshore and onshore teams to understand their own cultural practices and beliefs. Conducting training and workshops can also help identify the communication styles of all team members. This can help avoid misunderstandings in the future.

 

5. The home and offshore teams operate in different time zones

The offshore team is most likely to be on the opposite side of the globe. Even when they adjust their hours to match the onshore team’s working schedule, difficulties may still arise.

In the Philippines, most home teams operate in the US, Canada, or the UK. The offshore teams in this country also happen to celebrate many holidays. As per their traditions, Filipinos take their time off on national holidays. Unexpected project delays may cause missed appointments and friction in the workplace.

 

How to Overcome Time Zone Differences:

  • Operating with an overlapping work schedule is ideal.

When working in different time zones, communicating in real-time is challenging. Overlapping work hours for both time zones can enable more time for meetings and for both teams to investigate critical issues together.

For example, the Philippines is 13 hours ahead of the United States. The onshore team can work from 9 AM to 5 PM, while the offshore team may be from 3 PM to 10 PM your time.

 

  • If the first one does not work, establish a scheduling protocol.

Meetings and project updates should be scheduled in an acceptable time frame. Learning the amount of time an offshore team needs to prepare for a meeting or finish a task is essential. This is necessary to help the onshore team schedule accordingly. 

 

  • Identify key dates and holidays.

Countries like the Philippines and Vietnam have their own holidays. Set up a meeting with the offshore team to clarify what they do on holidays.  Mapping these can set the right expectations in terms of their productivity and avoid unexpected delays.

 

6. The offshore team feels detached from the company brand and vision

At any point in working with a remote team, it can be easy for them to miss out on full knowledge of specific processes and events. Moreover, they may seek a human element in interacting with members from the onshore site.

Team members could not have a full grasp of an assignment, for example, if it has been communicated only through text chats. This mode of communication also increases the chances of miscommunication.

At worst, remote employees may get confused not only by a project but by the company’s vision and branding. This could lead to burnout or to a general lack of motivation to create outputs.

 

How to Overcome an Isolated Offshore Team:

  • Avoid the “us vs them” mentality.

It is crucial that all team members feel at ease and are getting work done. The worst that an offshore team may realize is that they know nothing about the brand’s vision. Feelings of isolation can be resolved by including them in meetings and all communications.

Building real human relationships at work makes it easier to ask them about how they are progressing on a project as well. Leaving them in the dark is the last thing you may want to do.

 

  • Share your product/project vision to the team.

From the very beginning of a partnership, it is essential that the remote team is aware of the vision. All team members need to understand what the goal is. This will allow them to make smart choices at work.

To create something, they need to understand the upcoming work items. An assurance and security that the project is going somewhere boost their confidence and morale on what they do.

 

  • Make use of video conferencing.

Even when constantly visiting the offshore site is ideal, video conferencing is primarily used nowadays. Not only can this method help identify emotions and moods, but it can also help improve work relationships.

Adding a real human element can promote open channels of communication and a healthier work environment rather than a detached offshore team.

 

7. The turnover rates in the offshore team are rising

In the world of outsourcing, a high rate of employees leaving the team can be a real problem. In recent years, offshoring has become a popular solution to staffing shortages. Yet, some companies have brought production back onshore.

The gap between offshoring and onshoring has slimmed down due to smaller wage gaps, time zone challenges, and communication issues.

According to the National Association of Software and Services Companies, overseas vendors face a high turnover rate of up to 40%. A rate this high can be a usual cause for concern for firms who want to do business offshore. Low retention rates could mean less productivity as well.

On the other hand, high retention rates lead to more consistency within an organization. A “revolving door” situation and orienting employees every month will be avoided with better retention.

 

 How to Overcome Rising Turnover Rates

  • Attract talent by providing competitive benefits and salary ranges (otherwise you lose to other growing BPO companies)

 Employees consider salary as one of the top factors in accepting a job offer or in applying for a position. They also put considerable emphasis on special benefits and perks which can range from government benefits up to the unconventional ones – gym memberships, work-from-home options, and flexible work hours.

 A Glassdoor report shows that 57% percent of respondents confirm that salary and benefits are the leading factors in deciding to accept a job offer or not.

For example, in transferring jobs, employees do a cost-benefit analysis and see what they can gain if they transfer to another company. There is always the chance of losing a good employee to a competitor. 

Thus, continuously reevaluating your salary and benefits package can help you to attract and keep high performers. This is especially true in a market where companies are beginning to offer competitive salaries and benefits for great hires. 

  • Retain talent through a good rewards system

Around four million employees revealed that they are more likely to stay with a company if they receive regular recognition. Not only does it boost protection, it also increases productivity, workplace safety, and employee engagement.

 Reducing employee turnover is an ongoing process that should be consistently monitored. For a company to keep the best employees around, it is crucial that programs to recognize top performers be mixed with other learning and development programs. 

  • Achieve higher retention rates through established core values

 To achieve high retention over many years, letting them know of the company core values is also very important. Values of encouraging growth and diversity helps create a familiar and healthy environment.

 You should not want to be just a source of income for your employees. Rather, you should also encourage them to push for personal and professional growth.

This kind of culture raises interactivity among staff and increases workplace support and encouragement, and breaks boundaries. 

 

8. The offshore team lacks a leader

In traditional offices, a manager oversees the motivating of team members and making sure that deadlines are met. In remote teams, however, this role is often lacking, making managing the team more challenging.

It is also because of a missing managerial role that offshore teams may feel detached from the rest of the company. A leader can oversee operations better and assure that quality work is maintained.

 

How to Overcome a Lack of a Leader:

  • Provide senior-level leadership to manage the programs.

He or she can be the project manager who can ease the challenges the offshore team is having. Aside from keeping the team motivated and at ease with the brand, he can schedule training, events, or dinners to give the team a sense of belongingness to the company.

  • Include a “B” task for when the team gets stuck on an item.

There are many reasons for employees to feel stuck in the middle of work – business questions, vague requirements, hierarchy issues. Yet, they also need to get things done by the end of the day.

Assigning a “B” task will give them alternative items to work on. If they get stuck on the “A” task, they can have “B” and “C” items they can work on at the time being.

  • Avoid micromanaging the offshore team.

Micromanagement is not advisable, especially if the team is abroad. It is difficult to know a team if they do not feel trusted enough to do their work. Therefore, an offshore leader is essential.

It is also in the best interest of you and the offshore partner to ensure that the offshore can manage itself.

 

Get Ahead These Challenges

Curran Daly and Associates houses a pool of experts in the executive recruitment and search industry. We make sure that our resources are enough to help your business grow. 

Our services include executive search, IT and analytics search, expert search, and giving offshore recruitment solutions based on your needs.

We aim to enhance the quality and speed of service provided to both clients and job seekers.

Get to know more about us and what we do by visiting our website or sending us a message.

 

References

Bass, J., & Beecham, S. (2018). Employee retention and turnover in global software development: Comparing in-house offshoring and offshore outsourcing. Retrieved from https://www.researchgate.net/publication/323835309_Employee_Retention_and_Turnover_in_Global_Software_Development_Comparing_In-house_Offshoring_and_Offshore_Outsourcing

Daub, M., Maitra, B., & Mesoy, T. (2009). Rethinking the model for offshoring services. Retrieved from https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/rethinking-the-model-for-offshoring-services

Tomagan, K. (2019). Outsourcing in Asia: Philippines vs. Vietnam. Retrieved from https://workspaceinasia.kmc.solutions/outsourcing-in-asia-philippines-vs.-vietnam

Viet Nam News Agency. (2018, November 9). Vietnam’s English proficiency listed ‘moderate in EF ranking. Retrieved from https://www.vir.com.vn/vietnams-english-proficiency-listed-moderate-in-ef-ranking-63692.html

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