Don’t kid yourself about the ease of offshoring

Businesses are often lured to the concept of offshoring by the attraction of cheap labour. Websites which offer to connect you to skilled employees working from home present what appears to be an extremely easy and cheap fix to increase staff headcount at a very cost effective price. Scratch a little below the surface though and consider some of the intricacies that are involved with the effective management of staff and you will realise that, no different to your local workforce, the management of an extended offshore workforce is a complex undertaking. In addition, it is complicated by the differences in cultural values and understanding, business infrastructure requirements, differential time zones and of course, distance.

That is not to say however that you cannot achieve exceptional outcomes from the engagement of an offshore team. You can.

It is just a matter of how you go about the process.

The first and most important thing to understand about engaging the workforce in the Philippines is that the skilled workers you seek are also being pursued by many others. Whilst the Philippines has a population of 103 million people, there are only slightly under 1 million people currently working in what is known as the BPO (Business Process Outsource) industry. This means that appropriately skilled employees are highly sought after. The most important issue to understand in offshoring is that if you want to truly get value from your staff, it is essential that you provide them with working conditions and a level of engagement that ensures that they are happy and remain loyal to you, notwithstanding the many approaches they will inevitably receive from others.

To do this effectively is not a simple matter. We believe the key ingredients to retaining your staff in the Philippines are:

Understanding them

In order for your staff to feel part of your business, it is important that you understand them and how to engage with them. Appreciating the little things like the cultural differences, the significance of family functions, the importance of peer recognition and the like go a very long way.

They must understand you

They must understand Australian culture and our often very direct approach with management, which contrasts dramatically with the Filipino style of management. Assisting Australian staff to understand the Philippine staff and vice versa may enable a moderation of both cultural styles and result in a meeting in the middle, thereby producing a better outcome for all.

Understanding the Filipino work environment

Traffic in Manila is a horrible thing. Staff can be late for work for reasons totally beyond their control. Berating staff for being late in these circumstances is not an effective solution. Understanding this and other local working environment issues will assist greatly in a smooth engagement. For example, one way to deal with the issue of timeliness for staff affected by travel constraints is either to schedule their starting time half an hour prior to what is actually required or allow them the flexibility to make up the time after hours in the event they are late (which they will usually have no problem at all in doing).

Make them feel valued

Many providers of offshoring or outsourcing facilities in the Philippines approach things with a “bums on seats” attitude. They are “battery hen” style operations with rows upon rows of identical seats. The individual is not valued or appreciated. Not surprisingly, in these types of operations, there is little or no staff loyalty and turnover is often very high with employees moving on merely for the attraction of an increase in pay. A far more effective way to retain your staff is to engage with them on a personal level – this certainly costs more in the short term in terms of time, effort and money. However, in the long run, it is worth the result. Spending time to ensure that the workplace environment is a positive one that values the individual and treats them as an essential part of your business is very important. Filipinos are very family orientated and if you can create a culture within your workplace that makes it their second family, you will watch your attrition rates drop significantly.
The simple reality is that it is impossible to both provide all of the ingredients that are necessary for the retention of your staff, while also skimping on the cost of doing this. Employing staff who work unsupported from home or choosing the cheapest offshoring facilities provider (who in reality are usually a little more than a serviced office with recruitment support), is almost guaranteed to result in a failed outcome. The typical attrition rates of many outsourcing and offshoring providers are in excess of 5% of staff per month and the attrition rate for those working from home can be even higher again. These levels of attrition are simply unacceptable if you are to build your team culture and maintain a profitable offshore operation.

Therefore, the number one thing you need to consider if you are looking to engage an offshore staff solution is how you will ensure that your staff remain happy, productive and engaged for the longest possible time. This is where the real value lies and where the real cost will be hidden in the event you cannot achieve it as an outcome.

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