Lessons Learned from Outsourcing

I was asked about my experience using offshore talent today. The use case we discussed was specific, but I think the things I shared could be helpful to others considering something similar:

  • Nearshore vs. offshore – I have experience nearshoring in Nicaragua and offshoring in a few countries, including the Philippines and Poland. Both worked well. Nearshore talent may better understand American culture and usually the time zone difference is insignificant. Some of our team members in Nicaragua had lived in the United States for extended periods. For these reasons, nearshoring is good for customer-facing roles like customer service.
  • Execution – Outsourcing works only if you have processes and systems already in place. What you do and how you do it need to be well defined. If every operational situation is a one-off exception or figured out on the fly, your operations aren’t consistent and your processes are minimal. This might work for in-office hires who can learn on the job. But it will be extremely difficult, if not impossible, to train resources in another country how to execute up to your standards. Without processes and systems, you’re setting the team up for failure.
  • Education – Talented people are available for nearshore and offshore work. I worked with some intelligent men and women who had advanced degrees. They can usually do whatever you want if you help them succeed with proper training. If you want more-qualified or more highly educated people, just ask. Usually, firms can accommodate this kind of request if you’re willing to compensate these individuals appropriately based on their qualifications.
  • Consistency – Most nearshore and offshore workers and firms value consistency. If you can provide steady work, it will go a long way toward earning loyalty. If you plan to dial people up and down constantly, expect turnover and inconsistent execution.
  • Hiring – I initially let outsourcing firms do the team selection, but that didn’t go well. We got some people who weren’t well suited to their roles, and turnover was a problem. I eventually let the firms offer up candidates whom we would interview. The caliber of talent the firms offered went up. (I assume they had a better understanding of our standards.) I suggest sticking with your usual hiring process (with modifications) when you outsource. Misfires are time-consuming and costly with outsourcing, just like they are when you hire locally. Take the time to interview candidates and say no to bad fits.

I hope some of you find these points—which I learned through trial and error—useful. Tons of firms can assist with outsourcing and lots of information is available online. Outsourcing isn’t a silver bullet, but it can be helpful in scaling functions that have defined processes