Benefits and Challenges When Outsourcing

Originally written by Nicholas Hastings, CEO and Founder, hammerjack

Benefits of Outsourcing

1. It’s More Cost Effective Than The Local Alternative

The most significant reason any Australian business adopts an offshore employee program is because, if implemented correctly, it results in significant bottom-line savings. On a cost basis, domestic skill and service providers simply cannot compete. The wage/service rates locally have ballooned to some of the most expensive in the developed world, and the rates of equivalent employees to be found in teams such as ours in the Philippines offer a necessary alternative to businesses with margins already stretched far too thin.

The potential cost savings are so significant they can transform an unsustainable business operation into a profitable one, without any movement in revenue. Such are the cash-flow pressures being sustained by Australian businesses currently, it can only take a small drop in their customer base to tip the whole operation over the edge. Creating essential budget breathing room, through the targeted implementation of offshore staffing assets, is one of the key advantages of outsourcing.

Of course, the success of the operation is predicated upon finding the staff that not only satisfy your operating cost ambitions, but also maintain high standards of quality. Cost-effectiveness is a formula of price vs time. There is an extraordinarily variable talent pool of offshore staff available, that might appeal to your business because their hourly rate is lower. However, if these offshore team members take twice as long to execute their tasks then perhaps you’re not saving as much as you might imagine.

Our hammerjack team provides the edge for our clients in this regard, ensuring that maximum bottom-line savings are cemented by the highest expectations in terms of both quality and delivery. With guidance of an expert outsourcing company partner businesses, from the startup to the established firm, can expect to trim the fat on their budget costs, whilst maintaining the excellence of their product or service, and aspiring for business growth.

2. It Creates Flexibility and Agility

The second fundamental reason Australian businesses outsource to any third party, local or offshore, is because they have the work that needs doing, but not enough work to necessitate the employment of another full-time staff member. In the instance of a number of our clients, in particular, there are back-end administrative and operational tasks, such as bookkeeping/finance or IT services, which require execution on a changing needs basis. A business’ third party needs may also include branding and creative content, virtual assistant and data-entry tasks, and sales personnel.

Outsourced employees, by virtue of their per-hour or per-job payment structure, offer businesses the ability to scale engagement up or down as their needs dictate. It’s an essential flexibility of cost, and an agility in turnaround and delivery, that can provide client businesses the edge as conditions change, or as particular tasks arise.

If third party employees provide scalable, cost-effective options, then offshore-based solutions extend these savings as far as possible, as outlined in point #1. A local Australian subcontractor can still command unsustainable rates for many businesses, especially in the instance of highly-skilled positions in departments such as accounts or IT. Offshore based skill providers, such as our expert staff in the Philippines, allow business to fully realise this sense of agility, marrying the most competitive costs with quick and efficient scalability.

3. It Allows Core Staff To Focus

When we assist a partner business in implementing offshore skill providers into their operations, they invariably inform us that it creates a renewed sense of focus for the existing, full-time staff. By allowing the offshore team members to remove clutter and administrative tasks from their plate, key staff members are enabled like never before to be able to focus on the big-ticket items. This runs counter to the notion that outsourcing programs ‘steal’ jobs.

In fact, a number of client businesses engage with our hammerjack team in the first place because, without any cost-effective solution to outsource some of their operations, their existing team simply did not have the time and resources to deal with anything other than the problem directly in front of them. There was no time to see the bigger picture, and certainly not enough to formulate the best possible strategy to be able to carry the business forwards.

Engaging with an experienced BPO service provider in hammerjack allowed these clients to trust that the most appropriate personnel would be located and on-boarded, in order to free up essential breathing room for their existing team. They trusted that we would be able to manage the process of implementing these new, offshore assets, allowing them to focus on the formulation of the best possible strategy for long-term growth and success.

Challenges Of Outsourcing

1. Offshore Staff Can’t Come Into The Office

Well, not in a literal sense. It’s understandable that for the purposes of company culture, and communication, there are a number of business owners who are nervous about implementing offshore staff. They might feel as though integrating them into the existing infrastructure creates difficulty, due to a perceived inability of offshore staff to attend training, meetings and team events.

Luckily, the technology of communication and messaging has leapt forward in ways we couldn’t have imagined in the last two decades, and an experienced outsourcing partner, such as hammerjack, is able to leverage this new technology to integrate staff successfully. Whilst they might not be able to actually, physically, come into the office, video conferencing has enabled offshore staff to feel as close as any other team member. In fact, it’s so good at connecting employees that these days many local teams are remote working anyway, a new-normal accelerated by the pandemic.

Additionally, partnering with an experienced provider such as hammerjack can allay fears of team culture as well. We’re experienced in facilitating events and town-hall style discussions for our clients and their offshore skill providers in order to ensure that everyone is working towards the same goals, with the same aspirations. In this way, actual proximity to the business is not so much of an issue. We can create a strong sense of team regardless.

2. There Can Be Language Barriers

Whenever you’re dealing with offshore personnel there are often going to be concerns over any language barrier difficulties, both in terms of in-house communication channels and any published content. Offshore skill providers need to be able to communicate efficiently and effectively with the rest of the team, otherwise, the timeline on tasks can be extended out further than desired, and costs can mount.

Fortunately, with our offshore skill providers based in the Philippines this risk is minimised. With a phenomenal domestic record in terms of both education and English literacy, we can ensure that there are no communication issues between locally based and offshore team members. Our clients feel so secure in the communications between their offshore and onshore teams that a great many of them have gradually scaled up their offshore team to take on more responsibility and task execution. They would only do this if they were confident that the lines of dialogue between management and all team members, no matter where they were based, were secure and dependable.

3. Time Zone Differences Might Be A Challenge

Any employee who has had to deal with an external overseas branch of their operation, especially those based in the UK or US, can attest that time-zone differences can sometimes present hurdles. When dealing with an employee working out of London, for example, there is very little crossover between regular working hours. Therefore staff members, on one side or another, have to deal with truncated and lagging email chains and delivery times, and bleary-eyed Zoom calls in the middle of the night.

Thankfully, team members based in the Philippines, including our highly skilled hammerjack personnel, are largely immune to these challenges. Philippines time is a mere three hours behind Canberra/Sydney time, and therefore is largely unaffected by the issues potentially faced by businesses with offshore workers based further abroad. There is a significant amount of crossover between regular working hours, ensuring that communication and delivery standards do not deteriorate.

In these turbulent mid-pandemic revenue conditions that Australian businesses find themselves in, every possible option should be on the table in order to keep budgets in the black, and the wolves from the door. For the savvy management teams, these options must include diversifying staff with the use of flexible, cost and labour-effective outsourced employees based offshore.

At hammerjack, we’ve carved our reputation out of providing our partner clients with cost and risk effective pathways to implement business process outsourcing (BPO) programs that transform their bottom line, and workflow, to become lean and agile. Our experience gives us the edge in terms of both the implementation of highly skilled staff assets from the Philippines, as well as the identification and mitigation of any challenges that can present themselves.

If you’d like to discover how offshore skill providers would transform your business, give our expert team a call today.