Offshoring can reduce operational costs – but the process must be properly managed

Workforce

In order to reap the benefits of offshoring non-core competencies, SMBs must effectively communicate the process to onshore staff while ensuring there is cultural transference, according to Scott Stavretis, the CEO of Acquire BPO, Australia’s largest outsourcer to the Philippines.

Stavretis recently spoke to Dynamic Business about offshoring including the advantages for businesses, his predictions for the next five years and the key HR and legal considerations.

Why should businesses consider offshoring?

There are a number of business benefits to offshoring. Critically, it frees up fiscal and human capital allowing SMBs to reinvest in their business, expand quickly and drive sustainable and scalable solutions whilst focusing on their core competencies. In addition, by not having to worry about what can be considered the burden of recruiting and training staff, businesses can scale without delaying their key objectivities. We’ve seen businesses reduce operating costs by over 60% and then reinvest those savings into providing customers with the best products and services possible.” 

Who is offshoring today and who will in the future?

“Over the last five years, we have seen an increase in various roles going offshore. Typically, it has been customer service and sales functions. Nowadays, however, we are seeing a huge rise in finance and accounting services and even social media roles being shifted offshore.

“Over the next five years, we will see a shift in the roles being outsourced. We will start to see core positions such as engineering design, for example, infrastructure and product development, full management accounting, data science/analytics and even various types of marketing services, not just digital marketing and sales lead generation, but a lot more around social engagement.”

What are the HR and legal considerations?

“A properly managed offshoring approach can ensure a seamless, high quality and compliant transition.
 From an HR perspective, there are two points to consider and manage. First is ensuring that the organisation’s corporate culture is embedded into the new offshore team. Second is understanding the different cultures of people in different locations. Getting the balance correct is very important and not a one-size-fits-all approach. At the end of the day, it’s important that the company’s DNA is maintained. This ensures the onshore and offshore teams can truly act as one and meet both performance and value-driven goals.

“Offshoring work has to be communicated properly to the internal team to minimise speculation about their onshore roles. Time and again we see that all issues can be easily addressed as long as there is an authentic communication plan. Treating the team with respect, answering all their queries and laying out any planned roadmap is critical. We find that employees appreciate transparency; they come to understand the benefits of offshoring and are happy to be a part of the journey.

“From a legal perspective, offshoring to a reputable business process outsourcer that has experience in the market can lead to improved compliance, as a result of having a strong, independent compliance framework in place. Many clients quickly find this a surprising benefit to offshoring.”

How do SMBs ensure offshore candidates are a good fit?

“An important step in the process is ensuring the new offshore team has a deep understanding of the client’s culture. Culture is what can make or break a company. The team needs to have a strong understanding and belief in the client’s vision, mission and values and must also understand the operational mechanics of the business—this comes from a good mix of experience and training. We call this culture transfer. The staff needs to be trained in the client’s ways of working so that this is replicated within the contact centre. There is no one-size-fits-all with offshoring—every company is different and to ensure the process is successful, a custom-fit solution for a particular company’s needs must be created.”

Why should businesses consider the Philippines?

With just a two-hour time difference from the east coast of Australia, the Philippines is an ideal location for offshoring. Not only is the timing convenient, more than 90 per cent of the country speak fluent English, making it one of the world’s highest English-speaking populations. While in some cultures working in a contact centre is seen as an ‘in- between’ role, in the Philippines it is a legitimate career path. Filipinos, many of whom have college degrees in other areas, pursue full careers in contact centres, making them more committed and highly skilled within this arena.