As technology continues to advance, companies are evolving by conducting business from every corner of the earth. As a result of this globalization, employees are becoming increasingly capable and successful at working remotely. This is largely the result of more effective communication methods and the ability to collaborate on projects without being in the same vicinity. Thus, companies are no longer limited by a geographical region when creating teams and hiring employees.
As a result, offshore recruitment and management has seen a monumental rise in popularity and is now standard practice. However, what exactly does it mean to hire an offshore team, and what are the perks? Find out below.
Defining Offshore Management
Offshore management is the process of managing workers outside of a company’s primary country to perform in-house jobs. There are two ways this can be done. The first is that the company can set up the offshore teams itself by recruiting talent, hiring, handling office logistics, being responsible for accounting, etc.
The other method is for the company to hire a third-party vendor specializing in offshore management services to set up and manage the offshore team. The management firm can also be responsible for finding and securing an office for the offshore team, payroll, HR policies, and more.
Which Companies Should Consider Offshore Technical Teams?
Building an offshore team is possible for many industries but some are more adept at the distanced work style than others. The technology industry is one of the most popular fields for offshore management because countries such as the United States have a much greater demand for technical talent than there is supply. Therefore, tech companies in the United States can more quickly find skilled talent at a cheaper rate in foreign countries than within their own borders. Examples of tech companies that have offshore teams include Apple, IBM, and Microsoft. Other common industries and departments where offshore management is frequent include customer support and manufacturing.
Furthermore, hiring offshore technical talent is a viable option for small and medium sized businesses. Small tech businesses based in the U.S. are currently competing for the limited supply of technical talent alongside tech giants like Google and Amazon. The tech giants are sweeping up talent because they have the resources to offer larger salaries and greater perks, thus leaving smaller companies scrambling to fill open positions.
However, searching outside the U.S. opens up a new and large candidate pool for companies to look for highly-skilled technical talent. Furthermore, hiring offshore talent provides small and medium-sized businesses the opportunity to hire skilled talent within their budget. So whether a company needs full stack developers, dev ops engineers, QA automation specialists, or any other technical talent, exploring offshore candidates is a great way to find skilled talent on a budget.
Why Do Companies Choose to Have Offshore Teams?
You might be wondering why a company would choose to create a team in a different country when it seems simpler to expand the company where it is already based. Well, there are numerous advanatages of instating an offshore team, especially if it is managed by a third party. Some of these advantages include…
- Experienced recruitment teams from the management company can ensure staffing and quality levels are maintained – reducing project delays caused by turnover.
- You may not need to go through an expensive and time-consuming ramp-up period to set up their offshore center. The management company can use its existing facilities to set up the team and infrastructure.
- You may not have to immediately set up in a new country and navigate regulations, payrolls, taxes, locations, etc. The management company can handle the process until you are ready.
- You can evaluate the resources over a period of time and hire only the very best permanently.
- You will have the flexibility to change development technology and skill-set focus without significant retraining or retrenchment costs.
- You do not have to deal with fluctuations in the foreign exchange rate. The management company can manage the risk.
- You can maintain full control over the process and the team.
The benefits will vary depending on if a company decides to take on this process themselves or if they hire a management company. Furthermore, each management company provides different services so companies should determine their needs before selecting a company.
Factors to Consider
When contemplating if offshore management is suitable for a specific company, there are a few items to consider. The first is the time difference. Offshore teams are commonly located in different time zones than the company’s headquarters since they are based in different countries. Since these are your employees, you will be responsible for managing their workload and performance on the day-to-day just as if they were in the same location as you. Therefore, it’s essential to determine if the time difference will be an issue and how it will be handled.
Additionally, communication is another aspect to ponder. Since the offshore team will be remote from the rest of the company, acceptable communication methods should be contemplated and outlined. For example, is communicating using email and phone calls sufficient, or does the company require employees to meet in person? If the latter, then this route may not be right for you. Every company and team is different and will have varying needs.
Lastly, there’s the factor of cultural differences. Companies that are looking to have an office in another country should be aware of the cultural variations. Recognizing, respecting, and incorporating the offshore team’s culture is vital for cultivating healthy professional relationships between the offshore team and the rest of the company. This becomes especially apparent when the teams communicate with one another and when hiring and onboarding offshore employees.
Is Offshore Management Right For Your Business?
Creating an offshore team is a big decision, but one that can offer companies a multitude of benefits. Ranging from less expensive labor and not needing to worry about fluctuations in the exchange rate, to having vendors recruit the talent and handle payroll, the perks of offshore management are vast.
Is your company looking to expand your technical talent offshore? If so, eNamix would love to talk with you! Contact us today at firstname.lastname@example.org to set up a consultation with one of our senior account managers.