Six Misconceptions About Outsourcing Debunked

Originally published by Derek Gallimore on Forbes, 18 June 2021

The topic of outsourcing can quickly stir some pretty emotive and polarized opinions. As the CEO of an outsourcing advisory firm, I’ve seen ethical issues debated ranging from low wages, globalization, job losses and even whether outsourcing works. While these are important points to consider, I’ve also seen that there’s a lot of preconceptions — and even more misconceptions — about what exactly outsourcing is and how it can be incorporated into a business.

Outsourcing is a broad umbrella term, with the word itself being more of a misnomer than it is accurate. People can interchangeably use the terms outsourcing, offshoring, staff-leasing, virtual assistants and, now, remote and distributed teams all in the same breath — and be right.

Offshore staffing has been happening for more than three decades, has been widely used by big corporations and was worth more than $200 billion in 2020. And the reality is, modern outsourcing can offer many benefits, including lower staff costs. It’s also now more akin to standard local employment than anything else; it’s just that employees are sitting in a different country.

To recognize the benefits of outsourcing, however, it’s important to first myth-bust some of the more common misconceptions:

1. Outsourcing is just for big business.

The biggest misconception is that offshore staffing is available only to the world’s mega-companies. Originally, this was the case. However, small- and medium-sized businesses now have access.

Smaller businesses might worry that outsourcing involves complex contracts, long-term commitments and intimidating minimum staffing requirements. In reality, you can get started with just one employee, on great terms, with flexible cancellation and minimal setup costs. Remember that offshore staffing exists to simplify employment for your business.

The key is just to make sure outsourcing is right for your business before jumping in. As a business owner, if you feel you have limited resources for hiring; you can’t find the staff you need locally; or you want to develop a new revenue stream, boost output or cut costs, then offshoring might be a good option to consider.

2. Virtual assistants are the only type of help.

The “virtual assistant” outsourcing sub-type was thrust into business culture when Tim Ferriss wrote about VAs powering his business and lifestyle back in 2007 with The 4-Hour Workweek. This book did a lot for entrepreneurs’ awareness and outsourcing, but VAs are only a tiny snippet of the overall potential and sophistication of the industry.

Instead of calling everyone a “VA,” I find it’s much more powerful to build a team of specific roles with specific skills, such as bookkeeping, marketing, lead generation, administrative assistance, appointment setting, sales, executive assistance, etc.

3. Outsourcing steals jobs.

There’s enormous concern that outsourcing means workers in other countries are taking jobs from workers in the U.S. But from my perspective, this isn’t the case. Despite 30 years of offshoring, accompanied by technological advancement and globalization, pre-pandemic, the U.S. was at its lowest unemployment rate since 1969. And in May of this year, the rate dropped to 5.8%, its lowest since the pandemic began.

If existing employees are concerned, make an effort to get them involved in the process. A great exercise is to have them create a detailed list of all their tasks in any given month. Then, get them to highlight the low-value, simple and high-repetition work that keeps them away from their high-value, important and core functions. This will demonstrate that the offshore staff will directly improve their own role, remove tedious tasks and allow them to focus on the important work that excites them.

Also, ensure that you work to build alignment and a sense of community between the onshore and offshore teams. This is a core foundation of effective teams anywhere — and even more important when offshoring.

4. Quality will suffer.

When the average consumer thinks of outsourcing, many might associate it with frustrating customer service calls. Today, however, the sector provides highly specialized staffing solutions across various roles, sectors and professions. The quality and sophistication of the industry have come a long way since those early days.

You can get fantastic staff, but even the best people require a supportive training framework, clear processes and explicit objectives. Since this will be a “remote” role, it’s important to be as clear as possible with your requirements and spend more time training at the beginning. Delegate. Don’t abdicate.

5. Cheaper is better.

Cheaper is most certainly not better when it comes to outsourcing. Successful offshore staffing is about balancing the quality and volume of the output and the complexity and friction of managing the process. If you go too cheap, then the quality, reliability, scalability and ease of doing business can quickly drop. However, if you pay a fair price, you can access enterprise-level results.

When shopping for an outsourcing partner, speak to at least three, and ensure they really understand your business and can offer salient advice on the roles you need and the outcomes you can expect. The firm should have plenty of staff and would ideally offer transparent pricing, meaning they separate the staff costs from the service costs.

6. We’ll find a unicorn employee.

Often when entrepreneurs start hiring their offshore team, they tend to want one person who is perfect at everything. It’s not uncommon to see a job description for someone to do everything, ranging from web development to sales calls to social media posts to bookkeeping.

But the unicorn employee doesn’t exist. Instead, I’ve found it is better to initially hire offshore workers for very specific roles with clear processes and definable outcomes. Doing this sets you both up for success.

Outsourcing doesn’t need to be scary or complicated.

People think outsourcing is more complex, scary or a bigger commitment than it really is. But the new generation of offshore staffing is flexible, scalable and entrepreneur-friendly. By keeping these misconceptions in mind, you can overcome potential challenges and ensure your outsourced help is a great fit for your business.