Three offshoring myths stopping you from building a global team

The backbone of our success at Digit is the global team we've built since starting our business. When we first designed our business model, we made a conscious decision to engage and build our team with the best people we could find - even if that was outside our country.

Over the last few years, we've heard all kinds of opinions from people in industry, and also business owners as to why offshoring doesn't work. The objections tend to follow similar themes, and fly in the face of our own direct experiences growing Digit. It's worth dissecting some of these myths, and busting them.

I've had bad experiences before

Whenever you hear this, consider where this belief comes from. Typically, it's from two types of experiences - a view formed from experiences with other providers who have global teams, or from direct experience hiring people offshore.

Experiences with other businesses who have global team

If you've ever called a large enterprise that has an offshore support team, you'll know how this story usually goes. You just want help, so you call up, and explain what you need to someone who keeps mispronouncing your name. With growing frustration, you finally outline what you need help with, only to be told apologetically that that person can't help you, and you need to speak with someone else. A call transfer, and 15 minutes on hold later - you go through the whole process again only to be told that you can't be helped. Rinse. Repeat.

This frustration often stems not from the person on the phone - but from how they are trained and empowered to help you. You see, it's not that the person is offshore that bothered you, it's that they couldn't solve your woes. And that's a clear distinction.

Most people don't mind who helps us (I'd like to believe that we aren't inherently racist) all we ever want is our problem to be fixed. When it isn't, we get frustrated, and can sometimes associate those feelings with the person on the other end of the line - their accent and cultural identity.

Poor processes and training are often the source of our bad experiences that inform a view that all offshoring is bad' - when the truth is quite the opposite. An empowered team makes location irrelevant.

Experiences in hiring people themselves

Typically when we hear someone say "I tried using people offshore myself and it failed" the first thing that pops into our heads are investment ad disclaimers - past performance is not indicative of future success'. Said in a serious tone. The fleeting though gives way to wondering why it failed for them, so we dig a little deeper into it and ask why?'

What we've seen is that often the experiences people have had are with VAs working from home and hiring people on freelancer websites. Not to paint people with the same brush, but for many business owners typically the motivator in looking to outsource a job is in finding the cheapest price possible - and that's it.

If you aren't willing to invest in your people, train them, support them, and take the same long term mentoring relationship that you would have with someone sitting in your office - you'll fail. And many people do. There's often a gap between expectation and results, but that's not to say good results aren't possible - you just need to do it right.

Offshoring is all about getting things done for cheap, right?

Whoa, Nelly! While costs are one factor when resourcing work, making a decision to outsource based on cost alone is the wrong way to approach it. Remember those bad experiences people have had in the past? Typically they've been because price is the only driver in the decision to outsource.

When done correctly, the costs are closer to what it would it would be if you did the work locally. Why? Well - there's a significant investment required in IT infrastructure, training, great processes and communications.

If you were to set up a business locally - you'd still need to invest in training and supporting people. Offshore is no different, except the costs are multiplied by distance. Things like cultural training and constant support are critical to success, yet often overlooked.

It's natural that with this communications and training overhead, you'll lose some efficiency (there's only so many hours someone can work in a week - unless you like having employees resign on you for not treating them as people)

We often see people advertising fees of $5-10 an hour to get work done. It's like the adage "if you pay peanuts, you get monkeys". If you want to build a sustainable business, it requires investment and with that the costs are significantly higher. Expect to only be saving 20-30% on local rates.

So if price isn't as cheap' as you would think - why offshore? Two words - scalability and sustainability.

Nobody knows local business like local people!

This is our favourite objection, simply because it's something we're passionately challenging with Digit.

Within the accounting field, there are three things that lead to quality outcomes for business owners - knowledge of local accounting standards, knowledge of local business, and understanding local culture. These allow advisors to understand the context of each business and work towards the best solutions.

In Australia for instance - that knowledge might involve an intimate knowledge of BAS (and other compliance requirements), local suppliers (and what they sell), and knowing that we say "yeah, nah" as a filler when acknowledging what's been said but having a followup point.

All of those things can be learnt. Given enough time and experience, someone in another country can learn more about accounting for local businesses than a local.

We see this day to day within our business.

We recently advertised for a payroll position at Digit. Part of our hiring process involved a written test for applicants. The test covered general payroll knowledge but also arcane cases (such as the old loophole on employers counting salary sacrificed super as part of SGC and being able to short-change employees).

We gave the test to two control groups - our team in Manila, and owners of some of the top bookkeeping firms in Australia. We then gave the test to applicants in both Australia and Philippines that had more than 5 years payroll experience.

The results were startling. Out of 45 people who completed the test, 3 of the top 5 are from our Manila team. One was a fellow firm owner. And the last? A filipino payroll specialist who is now part of our team.

You might think that nobody knows business like a local' but the truth is, anything can be learnt. In a global economy, it would be shortsighted to assume that given time and experience - people around the world can't learn to do what you do, better than you.

So, what's stopping you?

In a world evolving rapidly through technology, that enables us to work from anywhere - the question to ask is, what is stopping having people anywhere work with you? Offshoring isn't the sum of the bad experiences you may have had in the past, and it may be the best possible way for you to build a sustainable business in our global economy.

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Andrew Erkins

A passion for technology and people inspired Andrew to co-found Digit. With a background in information systems, he loves business strategy and figuring out what makes things tick (and how it could tick better)

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Looking to grow your business?

We offer consulting and advisory to review your business, and find solutions to your business problems

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