The way business leaders build their teams has been steadily changing over the past decade. The historical conception of building a fully in-person, onshore team has given way to a hybrid (or remote-only) team that is both onshore and offshore. In fact, hiring offshore talent has exploded in popularity in recent years thanks to rising costs of hiring onshore employees in America, the increasing skill and sophistication of offshore talent and how much easier it is becoming to higher global talent.
Hiring offshore talent has historically been the domain of Fortune 500 companies who make multi-billion dollar investments in setting up companies, building office space and hiring thousands of employees in countries like Pakistan, China, India, Mexico, Brazil and more. However, with the rise of modern software tools hosted on the cloud and the democratization of skills globally SMBs and startups are now hiring offshore talent at scale for the first time. Today startups and SMBs are hiring offshore designers, accountants, virtual assistants and many more roles from.
However, hiring and managing offshore talent is a different game than hiring purely onshore talent. We’ll walk through some of the common challenges with managing offshore talent and suggest some best practices for managing offshore talent based on our experience.
Benefits of Building Offshore Teams
Building offshore teams has become increasingly popular in the last few years as the cost of doing business and of employees in the US has skyrocketed. Offshore teams offer several benefits including more affordable talent, access to top 1% talent and the ability to scale your team easily.
The main advantage of building an offshore team is the cost savings. Offshore talent can be anywhere from 50 – 70% cheaper than hiring onshore talent depending on the role. These cost savings can be reinvested into hiring even more offshore talent or reinvested in other parts of the business like product innovation, sales and marketing.
Notably, besides salaries, hiring offshore talent also enables savings by avoiding high employment taxes, employee benefit expenses, and the need for additional office space. Typically companies use offshore staffing firms to find, vet and hire trained offshore talent, helping them avoid the costs associated with recruiting and training. This allows businesses to tap into the global talent pool without needing to learn how to recruit internationally.
For startups and small businesses with limited financial resources, offshore talent can be a game-changer by enabling them to access skilled talent for 50-70% less than hiring in the US.
Challenges in Offshore Management
While offshore talent offers several significant advantages to businesses looking for a competitive edge, like all things it is not without its challenges. Some of the challenges with offshore talent include cultural differences, communication gaps, timezone differences and general challenges with remote work.
Cultural differences are the most obvious challenge with working with offshore talent located in Asia, Africa and Latin America. American work culture has a lot of hidden expectations that are taken for granted by those who grow up in America. For example, the American approach to vacations differs quite strongly from other parts of the world. American employees usually take about two weeks of vacation a year and often add a day or two before or after long weekends to turn them into mini-vacations. Similarly, the big vacation window in the US runs from November with the Start of Thanksgiving to early January with the New Years celebration. In contrast, other countries observe different religious and public holiday schedules.
Differing communication styles are another challenge when it comes to offshore talent. Communication in American companies is very direct and to the point with no sugarcoating. In other parts of the world, this kind of direct, blunt communication style is typically seen as offensive. American work culture also expects people to typically be available even outside of work hours for communication.
Timezone differences present a unique challenge when it comes to working with offshore talent. For example, 9am Eastern Time is 2pm in Nigeria, 6pm in Pakistan and 9pm in the Philippines. Obviously different timezones are better suited for different roles, especially roles that need to be done synchronously.
The Unique Challenges of Remote Work for Offshore Talent
Offshore talent typically join your company as remote workers which brings its own set of challenges including weakening company culture, inefficient communication and challenges with team collaboration.
Remote workers don’t have the same opportunity to mingle with their coworkers and develop relationships. Similarly, working from a distance makes it difficult for leaders to model company culture and reinforce it across the company.
Remote work can often result in creating more siloed teams across departments since you’ll typically mostly meet with your direct team on video conferences. This can make it harder for information to flow between departments. Similarly, without proper training learning to communicate effectively in a remote environment is challenging.
Lastly, collaborating with remote team members is a different beast than working with your colleagues in-office. Some common challenges include poor meeting structures, slower progress and tool sprawl. Running meetings for team projects are hard enough in-person but running these meetings virtually requires a new approach to make sure that communication is effective and the right notes and next steps are captured. Inefficient communication, note-taking and leadership can lead to slower overall progress on team projects.
The last five years have seen an explosion in software tools designed to make it easier for us to communicate, plan and track projects and do our work such as Slack, Trello, Asana, Figma and many more great tools. Companies have adopted these tools en masse:
“Companies with fewer than 500 employees use around 253 apps, those with up to 1,000 employees use about 335 apps, and enterprises (over 10,000 employees) use a staggering 473 apps.” – Source CloudZero
Suddenly, tool sprawl – where teams and companies are using many fragmented tools – has become a real problem. Remote teams often use additional tools to try to solve the unique challenges of remote work, making this tool sprawl even worse.
Key Ingredients for Building an Effective Offshore Team
Building an effective offshore team is pretty similar to how you would build your onshore team. Ultimately the three most important components are selecting the right talent, onboarding them effectively and setting up for success with the right initial and long-term training.
Selecting the Right Talent
Selecting the right offshore talent is crucial. If the only variable you optimize for is cost, you can find super cheap talent in many parts of the world (think $500 / month). But like anything else – you get what you pay for.
Instead, having a clear conception of the responsibilities and expectations of the role and investing to find and hire the best talent you can find makes all the difference. Skilled and experienced talent saves you time on training, avoids mistakes and pays off in the long run when your output increases.
However, recruiting global talent is a different ballgame than recruiting talent in America. The most common approach that companies use is to offshore staffing firms that specialize in finding the best global talent or by utilizing job posting platforms like Linkedin and Indeed and doing the heavy lifting and taking the risk of a wrong hire themselves.
Making bad hires for your offshore teams can set you back a few months and a few thousand dollars. Having a robust hiring process in place or a reliable offshore staffing partner is essential. The hiring process for offshore talent should include thorough interviews, reference checks, skills assessments and consideration of cultural and timezone fit.
Onboarding and Communication Strategies
Once you find the right talent that you’re excited about joining your team, you need to switch gears and focus on onboarding them effectively. We recommend building out your onboarding plan for the role before you even begin your search. Your onboarding plan should include:
- A checklist of software tools / accounts to set up
- A list of information you need from the talent (address, bank account) to onboard them into your systems
- What tutorials and/or playbooks you want them to study
- What their first 30, 60 and 90 day objectives are
- What they should focus on for the first day and first week on-the-job
- A link to your company values and culture documents
The better and more structured your onboarding plan, the faster you will start seeing a return on investment from your new hire.
Setting Your Offshore Talent for Success with Quality Training
While onboarding helps integrate your new offshore hire into your team quickly and effectively and give them the context they need about your company and systems to get up-to-speed, it alone is not enough.
Effectively training your new offshore hire is the final piece of the puzzle to maximizing your ROI. An effective practice is having this hire shadow or work very closely with an existing employee for 2 – 4 weeks so they can learn by observing and learn some best practices that may not be included in your onboarding document.
However, another great practice is to create internal playbooks and video tutorials of different processes with clear instructions. These playbooks provide a critical reference document for new hires and help ensure consistency and quality in your internal processes, especially with new hires joining.
Lastly, investing in upskilling your team as new tools and processes hit the market, especially with the rise of AI is a critical long-term investment for your company to stay competitive.
Best Practices for Managing Your Offshore Team
Effectively managing offshore teams is an art that can be mastered with the right strategies. Here, we delve into three crucial aspects of offshore talent management: clear communication channels, cultural understanding and integration, and utilizing cloud-based talent management systems. The six main best we recommend are:
- Understand cultural differences
- Invest in building your team culture
- Setup clear communication channels and expectations
- Setup clear standards for tool usage
- Setup data security protocols
- Get feedback
Understanding Culture Differences
Investing the time to understand, educate and manage cultural differences is absolutely crucial for making your offshore team a success. Failing to understand and address cultural differences is where most companies fail when they try to hire offshore talent. Uncommunicated work expectations like whether you should be available outside working hours for work-related communication or approaches to paid time off are common ones. We recommend three steps to take when hiring offshore talent:
- Understand their work culture: Invest the time to understand the work culture in the country they are from. What does respectful work communication look like? What is considered good, professional work performance?
- Setup a global holiday calendar: Different countries celebrate different national and religious holidays. Build a shared calendar across your team of these holidays and make sure to understand which holidays are the most important ones (religous holidays for example) and make sure to plan for the time off.
- Be clear about working hours: Often your offshore employees will be working evenings or night time. Have a clear shared understanding on what the work hours are and on when overtime is required.
As the hiring manager or business leader at your company ultimately its part of your onboarding responsibilities to navigate culture differences and create a system for managing them. Cultural differences are not a barrier to getting high quality work from offshore talent, simply something to be thoughtfully approached and managed. Ultimately, the exercise of integrating team members from different backgrounds can help strengthen the culture of your company broadly.
Investing in Building Your Team Culture
Things shouldn’t be all work all the time at your company. As you start to expand your team globally it is important to continue to invest in team building to ensure you integrate your global team into your onshore team.
This can take the form of time spent virtually getting to know each other and talking about non-work topics or bringing together your whole team somewhere in the world for an offsite. If you don’t invest the time into building your company culture and making sure everyone feels part of it no matter where they are, your offshore team is bound to feel more disconnected from the whole. Motivation and mission are hard to disentangle and employees want to feel like they are contributing to a bigger mission, whether they are onshore or offshore.
Setup Clear Communication Channels and Expectations
Navigating the complexities of communicating with remote workers halfway across the world is another important component of effectively managing offshore talent. As part of onboarding you should setup your offshore team on all the communication tools you use internally (email, messaging etc).
However, beyond simply giving them access to tools it’s best to outline some clear expectations and best practices when it comes to communication:
- How often should your offshore team communicate with their direct report / managers?
- What are your expectations for availability outside work hours?
- How do you expect them to track their time and what they are working on?
- How will you manage communication between onshore and offshore talent on collaborative projects?
Working in different timezones also offers some unique advantages. While your onshore team is off work or sleeping, your offshore team can be executing on work that can be delivered for review or further work by your onshore team when their next work day starts. However, without setting up a cadence and communication structure to enable this asynchronous work things will quickly become a mess.
Setting up clear communication expectations and best practices will help avoid many of the challenges that come with remote work and offshore talent.
Setup Clear Standards for Tool Usage
As we discussed earlier, tool sprawl is a very real issue in companies today who use dozens of different software tools. But an equally important menace is underutilization or poor utilization of existing tools. Everyone has spent their time navigating through a CRM stuffed with duplicates and incomplete data or spent 2 hours searching for a data file that seems to have mysteriously disappeared into the depths of your storage system.
Having a free-for-all when it comes to how your team uses your shared tools (project management, CRM, file storage) is a recipe for total chaos and gridlock. Building clear, universal standards and best practices for your team to follow across all your tools is critical to ensure things operate smoothly and effectively.
For companies with a combination of onshore and offshore teams, having best practices in place for your core tools is even more critical for ensuring effective collaboration.
Setup Data Security Protocols
Data security is a top concern when managing offshore teams. Employers should implement strict security measures to safeguard customer data. This could include conducting regular security audits, providing employee training, establishing clear data protection policies, and considering multi-factor authentication and data encryption technologies.
Data confidentiality may be at risk when transferring a company’s data to an offshore team. To address this, creating a local database and having the entire team access it can help maintain control over the data, including backups and software protection. Tools like Teramind can be adopted to monitor remote employee compliance with company security protocols.
By integrating best practices in hiring and data security, businesses can effectively manage their offshore teams while minimizing potential risks and challenges. This approach can help to maximize the benefits of offshore talent management, leading to increased productivity, cost savings, and business growth.
Get Feedback
Like anything else you should actively seek feedback from your offshore team at regular intervals on their experience and things that are working well and those that aren’t. They are after all members of your team just like any onshore employee.
Checking in regularly with your offshore team will help quickly nip problems in the bud and put in place more best practices to ensure your output stays high both onshore and offshore.
Addressing Time Zone Differences
Time zones can present a challenge when it comes to offshore teams. The first line of defense is to clearly state your expectations for working hours in the recruiting process. This will help filter for offshore talent that is ready to work your working hours (Pacific Time, Eastern time etc). From there it’s all about setting expectations for what work needs to be done synchronously and what work can be done asynchronously.
If for example you hire the majority of your offshore talent in junior, execution focused roles than a good practice is to have them work overnight in your timezone and have their work ready to review by their managers in the morning during your regular working hours. Typically having your offshore team overlap by 2-3 hours during your morning enables some time for meetings and feedback.
However, most companies simply have their offshore talent work the same working hours as their onshore team. Offshore talent typically gets significantly more than than their counterparts who work jobs locally and most offshore workers know that the evening and nighttime hours are part of the deal.
Conclusion
Overall building an offshore team offers numerous benefits but is not without its unique challenges. Managing workers in different timezones, from different cultures and with different communication styles is a headache if you don’t prepare and plan for it.
However, navigating most of these challenges simply comes down to clear communication, shared expectations and having playbooks in place. The good news is that these best practices apply equally to onshore and offshore teams, so everyone will benefit.
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