There is a lot to like about outsourcing. From increasing efficiencies and easing pressure on in-house employees to saving money via reduced labor costs, there is a reason that countless organizations embrace the chance to partner with offshore providers that are in the business of helping other businesses succeed. The global outsourcing market is tipped to be worth $620 billion by 2032 and that would not happen without a lot of companies being engaged in positive partnerships.
That said, not every business has such a rosy experience. Like any industry, not all outsourcing services providers are the same and some relationships simply fail to live up to what was promised. While the benefits of employing a workforce strategy that includes outsourcing services cannot be ignored, one of the greatest mistakes an organization can make is to rush into a partnership too quickly. Like any business decision, it is essential to do your research and ask a series of key questions to ensure yours becomes a memorable outsourcing story for the right reasons.
Questions to ask for outsourcing success
The best outsourcing providers are not afraid to answer questions. In fact, they relish the chance to discuss how they can help complement your business and how they will go about it. They know the key to any healthy relationship is communication and that starts from the moment a potential client makes contact. If a provider appears reluctant to engage in a meaningful discussion or provide the answers one needs to move forward, it is normally a sign that the best option may be not to move forward with them.
So, assuming you have done your research, compiled a list of potential partners and reviewed their marketing material, here are a few of the key areas to explore when it is time for question time.
Operations
Outsourcing providers ultimately thrive or die based on their operational experience and expertise. An organization can employ the best people in the world but if they do not have the resources, infrastructure and systems to support their talents, they are destined to fail. It is crucial to garner an insight into the backroom machinations of your prospective outsourcing partner including where their offices are located, how their staff are supervised and the technology they have in place to negotiate both day-to-day workloads and emergency situations. Key questions include:
- Do your staff work from home, in an office or a hybrid of both?
- What tools do you have to ensure staff remain online and productive 100% of the time?
- Do you operate 24/7?
- How do you manage power outages?
- What is your ratio of supervisors or managers to outsourced staff?
- In instances of bad weather, how do you ensure staff are able to get to work?
Costs and fee structures
One of the most exciting things about the outsourcing industry is every provider has a unique approach. That includes how they manage their costs and fees, which is why the topic of money should be a priority during the discovery phase. There is nothing worse than believing you have secured the deal of a lifetime only to realize in hindsight that a series of hidden costs have changed the game. Avoid this mistake by finding out exactly how the fee structure is broken down before signing on with an offshore partner. Similarly, take the time to know exactly what is involved in dissolving a partnership should the situation require it. Key questions include:
- How much do your services cost?
- How often am I required to pay (eg. weekly, monthly)?
- What are the additional costs over and above the standard fees in the contract?
- What currency do you invoice in?
- How do you manage currency fluctuations (i.e. will my invoice go up and down each month)?
- Do you have a minimum contract term?
- What is the notice period and termination fees if the partnership needs to end?
Recruitment and HR
People are any business’s key asset and many outsourcing providers pride themselves on nurturing and tapping into highly qualified talent pools. To ensure the best staff are doing your offshore work, ask your prospective provider to walk you through their recruitment systems, from how they find candidates and screen their capabilities to the interview and selection process. Once a team member is hired, the focus then turns to keeping them engaged and enthusiastic as that will have a direct impact on the quality of work they perform on your portfolio. Look for evidence of high employee satisfaction and staff retention rates. Key questions include:
- How do you source talent?
- Do you have an existing database of qualified applicants?
- How quickly can you fill roles?
- How involved do I need to be in the hiring process?
- How do you measure employee satisfaction?
- What happens if a team member does not work out?
- What productivity reporting do you provide?
- How do you manage your team’s aspirations to develop their careers while ensuring my own business continuity?
Holidays and leave
One of the joys of employing outsourced staff or teams is no longer being burdened by the financial cost and logistical headaches of managing leave requests and unexpected absences. Even so, it is imperative that you have a clear understanding of how much annual leave and sick days they are entitled to and how such absences are catered for to ensure your workloads are still met. While ignorance can be bliss, it can also be a recipe for disaster. Key questions include:
- How many annual leave days and sick days do your staff receive?
- What public holidays do your staff work to?
- How do you manage the additional costs involved with public holidays?
- What healthcare benefits are your staff entitled to?
Security
One security breach is enough to destroy an outsourcing relationship. It can have a devastating effect on the future of your very business. Never enter an offshore partnership without being fully confident that security is at the forefront of the provider’s thinking. Find out what their security policies are and the level of infrastructure they have in place to manage data and privacy. This extends to the management of their staff in terms of personal device use and access to cloud-based systems. Key questions include:
- What are your security policies and infrastructure to manage data, security and privacy?
- How do you ensure staff cannot access cloud-based applications outside of the office?
- How do you ensure staff are not using personal devices such as mobile phones and USB drives at workstations?
- Have you had data breaches in the past?
- Are you ISO-certified?
Prepare your organization for outsourcing
Whether you are a fledgling start-up in need of back office support, a national corporation looking to reduce costs or a business facing unexpected demand, outsourcing is a tried and tested strategy for tackling workforce resourcing – if done properly. It is all well and good to do one’s research by reviewing multiple websites and seeking out testimonials but the key to getting the right answers is asking the right questions. To assist with your search, this checklist will help you understand your business needs and how to match them with a suitable partner.
Before signing on with an outsourcing provider, it is essential that organizations are aware there are often overlooked costs amid the many benefits. Discover eight examples of hidden costs that, when reduced or eliminated, can result in significant savings.
