5 Small Details that will Kill Your Offshore Staffing Deal

The contract is signed and the deal begins. You are now on your way to cost-efficient outsourcing bliss. Well, not exactly. Here are five nails in the coffin of a doomed offshore outsourcing deal.

Fluctuating Exchange Rates

Currency fluctuations can chip off your projected cost savings. Typically, the small business pays with their currency - the Aussie dollar. The offshore staffing provider runs their business using local currency - for ex. the Philippine Peso. When the local currency drops, the costs of the provider go down, while you end up paying more. 

You need to take into account the economic outlook of the country you're outsourcing in. There are businesses that end up getting stuck in a deal they don't want because their savings are trickling down.

Lack of Qualified (not just Available) Workforce 

There are plenty of offshore workers who are ready to grab lucrative careers that will enable them to work for international companies without leaving their country. But there are a myriad of factors that influence their decision when applying for a job.

Apart from compensation and benefits, workers may also look at location, transportation, and employee management. More importantly, the key here is relevant skills and experience. Plenty of providers say they have a wide talent pool, but you still have to wade in the water to get qualified workers.

Misguided Intentions

Your motivations for outsourcing are critical in determining pricing, service levels, and metrics. In offshore staffing, businesses tend to focus on the volume of work. The hidden problem is, it doesn't always lead to valued-added outcomes. It focuses on task instead of results.

Aim for strategic value instead of just transactional outputs. Your offshore workers are humans, not robots.

High Attrition Rates

High attrition rates indicate underlying problems within the company. But in an offshore staffing deal, this is not the only responsibility of the provider. An offshore worker basically has a long distance relationship with a virtual employer, delivering repetitive tasks. Eventually, boredom and a sense of disconnect creep in.

You need to treat your offshore staff as part of your company, even if they're hired through a third party. Keep in mind that their work has a bigger impact on your business.

Failing to Expect the Worst

Offshore staffing is still a complex deal, even if you're just going to start with two offshore web developers. The provider is your offshore partner, but not your BFF. Don't get lulled by the rhetoric of sales people.

Make sure that you have contract provisions for handling disputes and terminating the deal. The provider should specify fees, deliver relevant data in your prescribed format, and assist with transition. 

Small businesses have plenty to think about when engaging in an outsourcing deal. But it’s always the little details that often make a huge difference.

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