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Decision Point: Pros And Cons Of Outsourcing Overseas

Multi-sided dice with choices

Decisions, decisions.

Virtual employment is all the rage these days.  More and more employees are working from home or even from across the country.

Some companies are taking the phenomenon one step further and outsourcing their projects to overseas independent contractors.

As is the case with just about anything in this world, there are definite pros and cons to this venture.  Let’s take a look at the pros and cons of hiring overseas independent contractors.

Pros of Hiring Offshore Contractors

There are some definite pros to hiring independent contractors from other countries.

+Financially speaking, the situation is great for everyone.

The reason overseas outsourcing is so popular is because businesses can get top-notch labor for cheap.  Whether you are trying to save a few bucks on a project that is pushing the boundaries of the budget or simply want to save money on overall labor costs, outsourcing is definitely the way to make things more affordable.

On the average, Western businesses can pay much less than the local minimum wage and still get quality employees.  Meanwhile, the contractors can earn significantly more than they could in their home countries.

+The hiring process is much shorter.

Because independent contractors are independent, they can usually jump on a project quickly.  If a contractor is looking for work, it means he or she is available to start immediately.  You won’t have to wait for your employee to give notice to his or her current employer.

+The learning curve is not as severe. 

Sure, you’ll have to train the independent contractor regarding the ins and outs of your company – but you would have to do that with any new employee.  Where the perk comes in is the fact that most independent contractors have a very focused sphere of competency.  While some contractors are a Jack of all trades, you can usually find workers who have the exact qualifications you are looking for.  You won’t have to pay extra for skills you don’t need nor will you need to provide a lot of training surrounding the skill you do need.

+You have access to the best and brightest in the world.

Many employers are confused at first about why an independent contractor chooses that lifestyle.  It is not because he or she can’t get a “real” job.  It is because his or her educational background and work experience is so advance, the local companies can’t afford to pay the employee what he or she is worth.

+You’ll never be without candidates.

When outsourcing overseas, you aren’t limiting your potential employees to just those in your city – or even country for that matter.  Because you have such a vast pool of employees to choose from, there will always be plenty of options available.

Cons of Hiring Offshore Contractors

With all those pros, it might be hard to believe there are any downsides to hiring offshore employees.  However, there are a few things you should be aware of.

-There will probably be some language discrepancies.

Many foreign nations start teaching English to their students at a very young age.  Even with years of experience with the language, if English isn’t the mother tongue, there are bound to be some language barriers on occasion.

-You’ll probably have communication issues.

Because of both language and cultural differences, there are bound to be a few miscommunications.  Implied messages will be missed and assumptions will be made.  It could become a major issue if these differences arise close to project deadlines.

-You might be sleeping while they are working.

Time zones can wreak havoc on internationally diverse companies.  If both the local employees and offshore contractors insist on working during the day, there might be some scheduling difficulties.  If you have to wait a day or two to receive a reply to your email, the project could come to a screeching halt.

If time zones are an issue, the employer could insist the offshore contractor switch to nights on occasion – especially when projects get down to the finish line.  This will help ensure communication is happening in real time.

-Contractors could be there one day and gone the next.

When hiring independent contractors, you must acknowledge they are independent.  They really have no loyalty to you.  That means these workers will probably feel very little guilt about abruptly quitting without much – or any – notice.

In a worst case scenario, the independent contractor could steal intellectual property.  Since the worker is overseas, there will be very little you can do.  Therefore, it is usually wise to only confide sensitive information to in-house employees.

What do you think about hiring overseas employees?  Have you ever outsourced to an offshore independent contractor?  Tell us about your experience in the comment section below.

About the Author

Guest author James Dodd works for Trim Nutrition.  The company sells vitamin B12 shots found here.  Trim Nutrition’s founder evaluated the pros and cons of outsourcing some of the company’s tasks overseas.  However, he ultimately decided it was best to keep the production of the B12 shots at a local pharmacy.

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Author:Globial International Business Team

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.


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