Utilising workers in either another state or country has become more and more popular in recent years. Small businesses are using this increased resource to help build capacity and access skills that they may not have access to in the current local labour market.
As small business owners we are usually doing everything in the business, whether that be IT, Marketing, Bookkeeping, Sales, HR etc. By having access to cost effective resources for some or all of these functions can free the business owner up to focus ‘on the business’ not be ‘in the business’.
Below are a list of PROS and CONS when it comes to utilising outsourcing for a small business.
PROS of Utilising Overseas Outsourced Workers
- Cost Efficiency:
- Outsourcing work to overseas locations often provides significant cost savings for businesses.
- Labor costs in certain countries can be a lot lower than your home country.
- By utilising overseas workers, you can better allocate your budget more effectively and invest in other critical areas of your business.
- Access to Global Talent:
- Outsourcing internationally allows you to tap into a diverse talent pool specific to your industry.
- You gain access to skilled professionals with expertise in fields specific to your industry.
- Thinking globally can enhance creativity, problem-solving, and innovation within your organisation.
- Time Zone Coverage:
- Working with overseas teams can provide round-the-clock coverage for customers/clients.
- While your local team rests, your overseas team can continue tasks, ensuring productivity and faster project completion.
- This can be especially advantageous for customer support, software development, and other time-sensitive activities.
- Scalability and Flexibility:
- Overseas outsourcing enables you to scale your operations quickly.
- As your business grows, expansion of your workforce can be completed without the complexities of hiring locally.
- Flexibility in staffing allows you to adapt to changing demands and market fluctuations.
- Focus on Core Competencies:
- By outsourcing non-core functions, you can concentrate on your core business activities.
- Let experts handle tasks like data entry, customer service, or IT support while you focus on strategic goals.
- This streamlines your operations and improves overall efficiency of your business.
CONS of Utilising Overseas Outsourced Workers
- Communication Challenges:
- Language barriers and cultural differences can hinder effective communication.
- Misunderstandings may lead to errors, delays, or misaligned expectations.
- Regular communication, processes and clear guidelines are essential to overcome these challenges.
- Quality Control Risks:
- Ensuring consistent quality across borders can be difficult.
- Different work standards, work ethics, and attention to detail may impact the final result.
- Regular monitoring and performance assessments are crucial to maintain quality.
- Time Zone Differences:
- While time zone coverage is an advantage, it can also be a challenge.
- Coordinating meetings, project updates, and collaboration across different time zones requires careful planning.
- Delays in communication can affect project timelines.
- Legal and Regulatory Complexities:
- Operating across borders can involve legal complexities.
- Employment laws, tax regulations, and intellectual property rights vary from country to country.
- You should seek legal advice to navigate some of these complexities and ensure compliance.
- Dependency on External Providers:
- Relying heavily on overseas outsourced workers can create dependency.
- If a vendor faces financial issues or suddenly terminates services, your business may suffer.
- Diversify your outsourcing partners to mitigate this risk. Don’t put all of your ‘eggs in one basket’.
In conclusion
Overseas outsourcing offers both opportunities and challenges. Assess your strategic business needs, evaluate potential partners, and strike a balance that aligns with your goals and values. Successful outsourcing requires effective management, clear communication and processes, and a long-term perspective.