Misconceptions about outsourcing confuse business owners and make them question the benefits of cooperation with remote service providers. To separate facts and myths, you must first know the difference between remote working, outsourcing, and other related terms.
Should you outsource or build your team in-house? As digital technology continues to evolve, business is undergoing a radical shift toward greater mobility and flexibility. Companies increasingly adopt diverse working patterns, delegate projects to remote staff, or outsource teams.
However, at 6Minded, we can still see many of our clients (usually startups and small business owners) perplexed by the distinction between remote teams, offshoring services, and outsource service providers. They miss the opportunities for growth that hiring external teams presents, falling victim to popular misconceptions about outsourcing.
To clear up this confusion, we look at various modes of engagement with a remote workforce and dispel five common myths about remote outsourcing teams.
5 Myths About Remote Outsourcing
- Remote outsourced teams speak poor English
- Hiring remote teams makes sense for IT and financial divisions only
- Only big companies outsource
- Communication barriers are impossible to overcome
- Working in different time zones is a hassle
What Are Remote Teams?
Cambridge Dictionary offers a succinct definition of remote working: “A situation in which an employee works mainly from home and communicates with the company by email and telephone.”
The word “employee” is crucial here.
Remote working is when internal company employees work in a location separate from the company’s office. It usually applies to a fixed working arrangement, where a person permanently works either from home or another place outside of the business office.
What Is Outsourcing?
Outsourcing always involves a third-party. It is a process of moving business functions, such as accounting, marketing, HR, or customer services, to an individual or company that’s an independent business entity.
Contrary to popular belief, outsourcing doesn’t refer only to the execution of menial tasks, but it increasingly involves complex business processes that require expert skills.
Depending on the outsourcing model, companies may move entire divisions to a third-party, or delegate some tasks only to be executed by the provider.
For example, an organization may have an internal team in charge of the marketing strategy but lack content production specialists to create assets. In such a case, it may outsource content planning and creation to an external provider that will deliver content under the guidance of in-house marketing strategists.
While cost-efficiency is a strong driver of outsourcing, companies increasingly reach out to external providers to get access to specific skills they lack in-house, speed up project execution, and free up employees’ time.
Cost-efficiency is still the chief motivation behind assigning processes and services to a third-party, but outsourcing presents many more advantages to businesses today such as allowing internal employees to focus on their core role and solve capacity issues.
What Is Offshoring?
Offshoring is an outsourcing model that focuses principally on lowering costs.
Offshoring takes advantage of discrepancies between developed and emerging economies. Companies that offshore transfer processes abroad to save on the cost of labor, operating expenses, and tax incentives.
Some definitions of offshoring also point out that it may require a service provider to be a subsidiary or a partner company to the client, while a “pure” outsourcing company is always autonomous.
The Difference Between Nearshoring and Onshoring
Companies can also nearshore or onshore business processes. The different types of “shoring” determine the geographical distance between the involved parties. However, in all three models, the cost is the primary driver.
Nearshoring moves service providers closer to the client than offshoring. In this model, work is transferred to a company based in a country within the same region as the client.
Because of greater geographical proximity, a company can still benefit from lower wages and more cost-effective processes, while reducing some barriers of offshoring.
Onshoring, by analogy, refers to the transferring of business processes to a business operating in the same country or even city as the client.
5 Biggest Misconceptions About Remote Outsourcing
Modern businesses recognize the potential of remote outsourcing to create business value beyond savings. By delegating responsibilities to external teams with expert skills and know-how, organizations tap company-wide benefits.
They can transform internal operations, expand their offering, enter new markets, and incentivize innovation. Understanding these new advantages of retaining external teams is as crucial as breaking down some common stereotypes on remote outsourcing.
Myth 1: Remote Outsourced Teams Speak Poor English
Globalization has turned English into a lingua franca that connects people around the world. As a result, global English proficiency has significantly increased, and numerous offshoring countries have adopted it as an official business language.
Companies looking to realize the benefits of outsourcing, especially remote outsourcing, can gain a good understanding of English communication skills across various geographies from the EF Proficiency Index, a global ranking of countries by level of English skills.
Popular remote outsourcing regions such as Poland, Slovenia, Czechia, or Romania rank in the top 20, which demonstrates that the language barrier in outsourcing is practically non-existent today.
Myth 2: Hiring Remote Teams Only Makes Sense for IT and Financial Divisions
While technology and telecommunications are the primary industry sectors for outsourcing, nowadays, all businesses could benefit from external teams.
The emerging outsourcing areas include content marketing, SEO, UX and web design, research, data analytics, translation, and localization.
These are highly-specialized services so maintaining an internal team to deliver them on a full-time basis could be quite costly, especially for growing businesses.
To save on these expenditures, these organizations turn to remote outsourcing providers.
Myth 3: Only Big Companies Outsource
That’s probably one of the biggest misconceptions regarding external teams. Moving internal processes to third-party specialist teams have already become a common practice among enterprises. Now, small and medium organizations are embracing that trend. As research indicates, currently, more than one-third of small businesses outsource at least one process, and this number is projected to grow.
Instead of wasting time and budget on part-time workers or grappling with inexperienced interns to get the job done, a tremendous number of SMEs retain skilled freelancers and external agencies to deliver exactly what’s needed, fast.
Myth 4: Communication Barriers Are Impossible to Overcome
Many companies hesitate about delegating work to remote external teams for fear of communication disruptions. Certainly, establishing an efficient communication model is vital for efficient and profitable collaboration with any outsourcing partner, whether an individual or a company.
Fortunately, there’s no shortage of cloud-based collaboration and productivity tools, such as ClickUp, Trello, Podio, or Asana, that connect geographically dispersed teams and enable efficient project tracking.
For these solutions to be effective, a remote outsourcing team must understand each role involved in a project and recognize the chain of command and responsibilities.
By defining communications metrics such as frequency of calls, promptness of response, SLA requirements, or escalation procedures, companies can ensure everyone in the team is on the same page, and provide for a secure and traceable exchange of information.
Myth 5: Working With Different Time Zones Is a Hassle
Dealing with time zone differences can be a nuisance in projects that require frequent meetings and immediate communication, but in most cases, these challenges can be easily managed.
In particular, web development, content creation, database management, and payroll distribution services allow a great deal of independent work that doesn’t require constant oversight or immediate response.
Additionally, in most outsourcing arrangements, there is some time overlap that leaves room for real-time communication. Many remote agencies and freelancers work flexible hours which often means they can adjust to the client’s schedule.
Some companies actually treat the time zone gap as an added advantage: Conducting business with a remote outsourcing staff gives them the benefit of “follow the sun” working model, where they obtain around-the-clock continuity of workflows that allows them to speed up project delivery, increase responsiveness, and avoid delays.
Consider Hiring External Remote Teams to Help Your Business Scale
In the past, the main motivation behind outsourcing work, particularly in the offshoring model, was cost-driven. Now, this traditional approach has changed.
New technologies are dissolving the geographic barriers that once prevented people in different countries and time zones to work together. Now, firms of all sizes retain remote service providers to leverage a global knowledge base, roll out services faster, and enjoy the flexibility so characteristic of dynamic, forward-thinking businesses.