Offshore outsourcing is a hybrid of “offshoring” and “outsourcing”. It’s where you use a 3rd party who has existing offshore centres to locate staff who work 100% for you. It’s a very easy way of taking your first steps into “offshoring” as it doesn’t require you to commit to the large financial costs of setting up your own offices and spend the time understanding the local employment laws and other legal requirements as these are all taken care for you.
How does it work?
Your provider should have “Offshore Centres” set up in various locations where the availability of high quality staff is good. They will already have a recruitment/HR function in place so all you have to do is decide (with their help) what roles and tasks you would like to move and to which location. Using their extensive experience, they should be able to assist you in;
a) Identifying which roles and tasks are most suitable for which Offshore Centre
b) Putting together the job specification and skillset needed
c) Recruit suitable candidates at the chosen location for your consideration
d) Assist in getting the selected candidate up to speed and working successfully.
What are the risks ?
Recruiting staff for your roles using a 3rd party is relatively low risk compared to outsourcing whole tasks or setting up a new office in a new country. Most agreements should allow you to give between 30-120 days notice of wishing to end a role and even less if performance is not satisfactory.
Remember whilst the Offshore provider should provide all the key HR functions such as;
- Local employment contact & staff manual
- Holiday and sickness management
- General management in respect to attendance and attitude
What they won’t and can’t do is manage the individual in respect to the day to day role you have asked them to do. The individual will need to have a day to day manager in your organisation and they will need to be in regular contact to ensure good performance and provide feedback.
How does Offshoring compare to Out-sourcing?
Out-sourcing is where the whole responsibility for the task and/or role is taken on by a 3rd party who is then measured on their performance against agreed criteria. The 3rd party is fully responsible for delivery.
When you undertake Offshoring, either by doing it all yourself and opening an offshore centre or through a 3rd party who provides that offshore centre, you are retaining full responsibility for the role and tasks being carried out.
There is less responsibility and flexibility with Outsourcing and more responsibility and flexibility with Offshoring.