The Pros and Cons of Outsourcing Work Overseas

Small and large businesses alike are at the mercy of their local talent pool, but there isn’t always the right person to fill an urgent role or the available resources. This is tough to deal with, because covering for a vacancy or having employees wear multiple “hats” isn’t always a sustainable tactic to deploy. Instead of exposing themselves to the leverage that in-demand candidates have in certain geographies, the savvy business instead goes overseas. Outsourcing positions is an excellent alternative to on-site employees in many cases, but it also comes with risks that must be considered as well. Remember that outsourcing pros and cons are not necessarily just financial in nature either.

work without the overhead usually required

Outsource for Good

The benefits of outsourcing are in large proportion based on the bottom line, but there are other conveniences inherent in it as well. Offshore outsourcing means that businesses don’t have to rent new space or equipment for their growing roster, and have the same capacity for work without the overhead usually required. Outsourcing and offshoring are now key components for scaling any modern business. Advantages are extended to the administrative realm as well as the physical. While a new on-site worker will require a desk, benefits, and other direct costs, he or she will need to be trained and absorbed into the “system” as well. This is a larger human resources effort and involves lots of paperwork and bureaucracy.

Outsourced talent largely works on a consultant model instead, meaning a simple system of invoicing rather than complete absorption of a new team member. The larger talent pool is another of the best advantages of outsourcing. While developers and engineers might be in short supply at home, going abroad could mean more increased diversity, more time saved, lessened costs, and even better talent. With their ballooning balance sheets, companies can invest more into research & development, marketing, or sales projects designed to instill a faster pace of growth.

Some companies, like InVision, have found outsourcing to be so much to their advantage that they have moved to a fully outsourced team. Others, especially in the technology sector, take advantage of the similar or superior talent level found in countries like Bulgaria, Ukraine, Czechoslovakia or even Brazil at a significantly decreased cost.

excellent alternative to on-site employees

Offshoring Risks

At the end of the day, remote employees are typically no substitute for in-house human capital, but they can get very close. Hitting close to the mark requires inputs that may have been overlooked until now, such as proper documentation practices. In place of training, you must put extra efforts into creating guidelines, brand books and other resources for outsourced talent. This will reduce mistakes, time spent on supervision and review, and makes overcoming minor hurdles that much easier.

Why outsource if the best offshore workers will need custom guides and babysitters? The truth is that some will need a helping hand to get started, but it’s usually worth it for those individuals who can strike a careful balance. Finding someone who is confident and consistent with the company’s standards is only half the battle, however. Offshore outsourcing always comes with some extra fees in the form of international money transfers and processing charges. Sending money between banks cross border is expensive and adds sometimes up to 10%, which severely cuts into any firm’s margins.

Maintaining quality, practicing efficient oversight, and controlling costs are all part of the challenge when it comes to outsourced workers, but it pays off more frequently when a company can reduce its overhead wherever possible. Some are using services like PayPal and others to pay workers abroad quickly, but these services aren’t exempt of fees and can be equally as expensive as going to the bank. Accordingly, many businesses are opening bank accounts in the localities where their outsourced employees reside, instead relying on and our marketplace to move money with greater agility and frugality as well.