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. The offshore strategy may result in significant business losses if not avoided or resolved.
- Hiring experts and professionals in the field can help your company grow by helping you get ahead of various outsourcing and offshoring challenges.
- As a result of the pandemic, offshore workplace culture and setups have evolved drastically, making it more difficult for employees and organizations to adapt to these changes.
- Overcoming and learning the offshore challenges can benefit an organization as it eliminates the possible risks such as lack of quality output, not meeting deadlines, difficulty tracking progress, etc.
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, several industries 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 change too frequently.
In addition, proper standards may not have yet to be 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.
There are a lot of causes of employee turnover, and organizations need to analyze and collect essential data to pinpoint the root causes.
Building a more stable team through effective management of human resources is one of the top solutions for this problem.
Investing in your employees is one of the most important things you can do for your organization. Making work options more flexible, listening to and acting upon concerns, keeping top performers engaged, and creating a strong corporate culture can be viable options when building a more stable team.
In addition, proper rewards systems or communication channels can engage your workers in specific processes more regularly. Rewarding and recognizing your employees’ hard work can bolster staff loyalty and reduce the risk of high turnovers, adversely affecting overall productivity and product quality.
- Properly set reachable standards and expectations.
It is crucial to ensure that all communications are documented and written in blank & write to have concrete documents in creating projects. Changes are unavoidable; thus, it is better to establish a technical template that can be accessed by anybody in the team so that communication will be more efficient and information and instructions will not be lost in translation. 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 on quality assurance. If this is costly, setting a schedule or feedback system would also continuously improve the quality of outputs.
Every organization must know that reviewing outputs is vital before submitting the final result to a client. Ensuring the output is accurate and contains the necessary information can help promote a more efficient review process. Taking proactive measures will ensure better use of members’ time and resources in addition to creating productive results.
2. The offshore team is unable to meet the deadlines set
This problem is often connected to the previous one. Yet, other factors can lead to ever-shifting deadlines.
For one, an offshore team may feel overwhelmed 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 mediocre output quality.
A Forbes article stated that pressure could benefit an employee, but too much can cause stress and anxiety, which can lower productivity.
Here are some questions an organization has to ask themselves before setting tasks and deadlines:
- How difficult do you find this task to be?
- Is this deadline attainable?
- How much of your mental energy will you dedicate to reaching this goal?
- How confident are you that your employee can tackle this project?
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.
Listening to your employees and their feedback in the development process will likely improve your business as employees can set expectations and deadlines, thus improving the work environment.
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 company’s style of work. On top of this, they also need to be familiar with the services they offer, the products they sell, and the relevant technologies they will be using at work.
Since the pandemic, work culture and setups have diversified, making it even harder for employees to adjust to the new normal. Listening to employees’ concerns and fixing minor problems can help employees adjust since strong communication can resolve any bad news.
- Gather your team and identify how you can practice risk management.
Practicing risk management is done by identifying and assessing risk factors that may arise from operations, decisions, and activities, then developing strategies to mitigate the risk accordingly. 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, 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 consistency 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 with team integration and projects will pile up. This will cause more severe 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.
When working with an offshore team, almost all communication occurs electronically through voice or video calls. Additionally, it’s essential to remember that remote team members come from unique cultures and backgrounds; therefore, be sure to consider cultural differences when formulating communication strategies.
A strategy available to all individuals can be immensely beneficial for an organization.
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 documents in real-time, and even plotting the company calendar.
Reviews xp stated listed communication applications that will most likely dominate in 2023 and beyond, such as Spike, Messenger, WhatsApp, Telegram, Discord, Slack, Viber, WeChat, Skype, and Microsoft Teams. Organizations can also use communication applications: Google Meet, Zoom, Webex, and RingCentral.
Regarding tracking and reporting, applications like Trello and Bitrix24 are becoming 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.
A Forbes article discusses the impact of diverse cultures in the workplace and how their flexibility can allow organizations to evolve and adapt to change.
But with diverse people and minds working, problems such as language barriers, different work approaches, social tensions, and risks of miscommunication can arise.
Once these differences serve as cultural barriers, they should be immediately acknowledged. Even the smallest cultural difference can significantly impact 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, Vietnamese locals could not fully understand metaphors and other cultural references. 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.
A Clockify article indicated that regarding language barriers, miscommunication between managers, executives, and other personnel within organizations was proven to be a prevalent issue for 65% of companies. Furthermore, 67% reported that this miscommunication caused inefficiencies, while 40% experienced difficulty with collaboration.
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 culture training for your offshore teams.
This will help both the offshore and onshore teams to understand their own cultural practices and beliefs. Conducting training and workshops can help identify the communication styles of all team members. This can help avoid misunderstandings in the future. Opening up cultural differences between workers through these events and embracing them can establish good working relationships. Being familiar with cultural differences daily would enable workers to read between the lines and understand the different approaches of diverse workers.
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. Adjusting the schedule can strategically organize and plan the workflow to prevent any unexpected holdups. Loom videos can also be utilized when working with different time zones, as they can cut down the time for meetings by up to 29%.
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. It is immensely difficult for workers in opposite time zones; thus, it is essential to learn how much time an offshore team needs to prepare for a meeting or finish a task. Being in sync and having specific scheduling protocols with a distributed team promotes camaraderie and organization. This mindset needs to be adapted to ensure productivity and is necessary to help the onshore team schedule accordingly.
- Identify key dates and holidays.
Countries like the Philippines and Vietnam have their own holidays, which can affect work schedules in other countries. Setting up a meeting with the offshore team to clarify what workers do on holidays can give insights and plan possible alternatives for meetings and work. Mapping these can set the right expectations regarding their productivity and avoid unexpected delays.
- Mastering Synchronous and Asynchronous Communications
Synchronous communication is real-time interactions that can be done through different channels such as phone calls, Zoom, Google Meet, and Microsoft Teams. Workers can ask questions and get direct feedback immediately, allowing faster and more efficient communication. On the other hand, asynchronous communications are communication with intervals or delays. Some examples of these are Loom videos, emails, and voice messages. Finding the right balance between these two can reduce meeting times and improve productivity.
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 can easily confuse and misunderstand the task if an assignment is communicated only through text chats. This increases the risk of miscommunication and decreases the clarity of a project’s goals.
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 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 is that an offshore team may realize that they know nothing about the brand’s vision.
Since branding plays a role in any company’s reputation, you do not want to hear employee feedback about inclusivity problems.
By creating an inclusive workplace, every individual is appreciated for their unique attributes and contributions to the organization’s corporate culture and overall success. Diversity should be celebrated to foster a sense of belonging that encourages everyone to reach their full potential.
Feelings of isolation can be resolved by including them in meetings and all communications.
Building genuine human relationships at work makes it easier to ask them how they are progressing on a project. Leaving them in the dark is the last thing you may want to do.
- Share your product/project vision with the team.
From the very beginning of a partnership, the remote team must be aware of the vision. All team members need to understand what the goal is. This will allow them to make smart choices at work.
Having workers that can think outside the box and understand a company’s goals is essential for success. Supporting this ability with solid vision will help organizations progress, focus on long-term objectives, and develop new ideas that benefit the company and its customers. Visionary employees are crucial in forming the future climate of an organization.
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 in 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.
Owllabs stated the best video conferencing applications for companies to use and hold meetings and events to improve communication and productivity.
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 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 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)
As The Great Resignation changes the employment landscape, hiring employees will become increasingly difficult for employers. Employers must consider different factors to stay competitive in the market, such as offering competitive salaries and giving developmental opportunities.
Employers also need to put considerable emphasis on special benefits and perks, which can range from government benefits to 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, employees do a cost-benefit analysis in transferring jobs 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.
- Implement an employee retention strategy
High employee retention rates enable employers to retain key talent, increasing productivity and workplace efficiency.
Spending less time and resources on recruiting, onboarding, and training new employees will allow current staff to develop greater expertise in their work.
An article from Indeed stated ways to retain employees, such as creating an engaging onboarding process, pairing with a mentor, scheduling employee performance reviews, showing appreciation, encouraging work-life balance, offering professional development opportunities, providing competitive compensation and benefits, implementing team-building activities, offering more perks, and keeping communication lines open.
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, it is essential to let them know the company’s core values.
An article on company values indicated that 70% of executive employees stated that their purpose in life was largely determined by work. Nevertheless, the responses from those who were not executives revealed a different story – only 15% felt like they were living out their mission at work.
It is essential to entail core values to all employees and not just the executive team to improve employees’ satisfaction and build trust.
Values of encouraging growth and diversity help create a familiar and healthy environment.
You do not want to be just a source of income for your employees. Instead, 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 team members’ motivation and ensures that deadlines are met. However, remote teams often lack this role, 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 ensure that quality work is maintained.
How to Overcome a Lack of a Leader
- Provide senior-level leadership to manage the programs.
Having a person who has senior-level leadership qualities can be a project manager can ease the challenges of the offshore team.
Working with talented individuals can help resolve cultural divides, time zone issues and ensure that your offshore employees remain motivated and engaged.
Aside from keeping the team motivated and at ease with the brand, they can schedule training, events, or dinners to give the team a sense of belongingness to the company.
- Include a “B” task when the team gets stuck on an item.
There are many reasons employees feel stuck in the middle of work – business questions, vague requirements, and 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 can cause damaging effects on the offshore team resulting in lower employee morale and lower productivity.
Building successful teams can be difficult, and often comes down to creating an environment of trust that allows team members to perform at their best.
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 of These Challenges
Curran Daly and Associates houses a pool of executive recruitment and search experts. 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.
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