Consider a Company’s Employment Philosophy When Selecting an Offshore Outsourcing Partner

Posted on

When considering an offshore outsourcing service provider, companies generally consider pricing, talent, service, management, IP protection, stability etc. These are all critical to include in the decision making process. One important aspect which eludes some decision makers; is a vendor’s employment and human resource philosophy.

Offshore outsourcing companies vary greatly…let me say that again…offshore outsourcing companies vary GREATLY! From the lone developer who works out of the local Starbucks in Chennai and finding customers on CraigsList to the multiple Accenture buildings in Metro Manila boasting more than 325,000 Filipinos serving over 120 countries; there are many different types of outsourcing companies. The way these firms value and treat their employees depends on their individual corporate cultures and policies. And considering these various employment philosophies is a very worthwhile and critical exercise.

Here are seven key questions you should ask and why they are important.

1) Is their culture similar to yours?

Finding a company whose culture aligns with yours is important. Often companies don’t consider this and once a project begins, the misalignment becomes obvious. This can be very disruptive to any project, creating unnecessary risk. An example of this would be a client company which has an autocratic project management style versus an outsourcing company which values team collaboration.

2) Does the company have a benefit program for their employees?

Providing a robust benefits program says a lot about a company. Companies that do provide benefits create a workforce that trusts and values their employer. This leads to a happier workforce and in turn they will be more productive and the end result will be satisfied customers. Also, a company’s high attrition rate can often be tied to poor compensation packages and attrition can delay and jeopardize any project.

3) Are most of the workers full-time employees or contractors?

Companies which make commitments to full-time employees are generally more stable than companies which operate with an unhealthy weighted balance of subcontractors. This commitment to employees translates into a more secure, happy workforce and these are the types of people you want working on your project.

4) Do employees work from home or is office attendance required?

A common practice throughout the offshore outsourcing industry is the model of working from home. On rare occasions this can work, but there are more risks than there are benefits. Oftentimes home workers will ‘moonlight’. That is to say, they will work multiple projects while professing to only be working on your project. Additionally, there are huge risks in regards to IP protection, legal software compliance and even issues as rudimentary as network communications quality.

5) Do employees use their own laptops or does the company provide the hardware and software technology?

The key issue here is the huge risk of protecting your IP. Aside from this though, a company not willing to invest in technology for their employees is probably not the type of company you would want to partner with on your projects.

6) Are employees paid a fair market rate?

As offshore outsourcing companies attempt to capture more margin for their shareholders, they may pay lower than market salaries in trying to reach this goal. It’s my opinion this is very short sighted and hurts all parties in the long run. If they are talented, employees who are taken advantage of will always be searching for their next opportunity. They also may not perform well, because they feel they are being under valued…and they are. So, as you negotiate price, resist the temptation to go beyond a reasonable rate. It is to your advantage to have a happy vendor and a happy offshore team.

7) Are employee’s shifts manageable?

Most offshore outsourcing companies operate on a 24/7 basis. The rub is this…the very best talent have the power to dictate which shifts they work. So if you want top talent, be prepared to be flexible on when you require your team to be available.The answers to ALL of these questions should be verifiable from any competent and well run offshore outsourcing company. If not, I would highly recommend looking elsewhere.

Phil Bartos

Phil Bartos

Phil Bartos has worked extensively in the management consulting and IT/BPO outsourcing industries for Fortune 500 companies including: Accenture, Computer Sciences Corporation, TELUS and Siemens Corporation. Phil’s experience in the offshore outsourcing industry has included operations in the Philippines, India, Thailand, Russia, Mexico and Mercosur. Phil was an early adopter and pioneer entering the Philippine market in 2003; when it was still a small yet burgeoning offshore geography. In 2009, he launched NarraSoft and today serves as its President and CEO. Phil serves on the board of directors of the NC Museum of Life and Science, a globally renowned institution. He graduated from Baylor University’s Hankamer School of Business with a Bachelor of Business Administration in Management and Marketing. If you have any question or comments, please feel free to contact Phil at phil.bartos@narrasoft.com