The Most Important Question About Offshore Talent Isn't What You Think

You’re probably tired of the same old offshoring story. And you should be. Discussions and articles about offshoring have followed the same script for years: “Here's a list of departments you can move overseas, here's why customer service and back-office work are safe bets, here's the cost savings, blah blah blah.” Well, that conversation is over.

At this point, nearly every business function has already been offshored successfully by someone, somewhere, whether it's finance and accounting, software engineering, marketing, HR or specialized technical roles. If you're still asking, “Can this job be done offshore,” you're asking the wrong question.

The question that actually determines success or failure today is a different one entirely:

Are you offshoring a task, or are you building a team?

One Word, Two Very Different Models

“The word offshore gets used to describe two fundamentally different arrangements, and the confusion between them is costing companies real money and real talent,” says ECLARO Co-Founder Paul Sheridan.

“On one end, there's the traditional outsourcing model, the managed services approach, where you hand a process to a vendor, they run it against a service-level agreement, and you get a deliverable back. It's transactional by design.

“Then there's the dedicated team model. The offshore staff are recruited and hired specifically for your organization, work inside your systems and workflows, follow your standards, and report through structures that look and feel like your own internal team, not a third party fulfilling a contract.”

The distinction may sound subtle. In practice, it's the single biggest predictor for many businesses of whether an offshore relationship will actually work.

READ MORE ABOUT ECLARO'S ECAPTIVE DEDICATED OFFSHORE TEAMS MODEL

Why This Distinction May Actually Cost a Business

Here's some data that just might reframe how you think about this. Traditional BPO and vendor-style outsourcing arrangements run attrition rates of 20 to 40 percent annually, and in some markets that climbs even higher. Dedicated offshore teams, by contrast, typically see attrition in the 8 to 15 percent range, sometimes lower.

“That gap isn't a rounding error,” says ECLARO Co-Founder Tom Sheridan. “A traditional 100-person team running at industry-average turnover can be looking at roughly 35 people a year dropping off. When you factor in the real cost of each departure, ramp time, knowledge transfer and the secondary disruption to the rest of the team, the financial difference between those two scenarios can run into hundreds of thousands of dollars annually for a single team.”

What Actually Drives the Difference

The reason dedicated teams outperform transactional outsourcing for many clients isn't magic, and it isn't really about geography either. It comes down to how people are recruited, hired and integrated into a business.

“In a traditional model, offshore staff work are performing a task for whatever company or companies the vendor tells them to,” Paul says. “Their loyalty, their career path, their sense of belonging, it all points back to the outsourcing company, not to the client whose work they're actually doing.

“In a dedicated offshore team model, the offshore team member identifies with the client's company and takes pride in working with them, because that’s the only client they are supporting,” he continues. “They're recognized, given a growth path, and treated as a long-term member of the team rather than a rotating seat on a vendor’s bench.”

Feeling more a part of a team leads to higher engagement, which translates into lower turnover. Lower turnover is what allows an offshore hire to actually mature into the kind of contributor who understands your business deeply instead of cycling out over and over again.

WHY DEDICATED OFFSHORE TEAMS ARE A FORCE MULTIPLIER FOR YOUR BUSINESS

The Practical Test for Business Leaders

If you're evaluating an offshore partner right now, the best question you can ask isn’t “What roles do you support?” Instead of starting with a list of job titles and asking which ones are “offshore-friendly,” the better starting point is asking how a prospective partner actually structures the relationship.

How are the team members chosen? Who sets the KPIs? Who manages day-to-day performance? Does the team report into your workflows and tools, or into a vendor's separate system? Those are the kinds of questions that get at the heart of whether you're looking at a transactional arrangement dressed up as a "team," or an actual extension of your organization.

Continuing the Conversation

“None of this means location doesn’t matter, or that structure alone solves every challenge of managing people across borders and time zones,” Tom says. “Those are real considerations, all worth their own deep dive. But they're secondary to getting the fundamental model right first.

“A poorly structured relationship in the ‘best’ location will still churn through people and erode institutional knowledge,” he continues. “A well-structured team, built with the right foundation based on the unique needs and goals of the client, tends to perform well regardless of where it's based.”

That's a thread to keep pulling on. Not which functions can technically be offshored, since that ship sailed years ago, but how to structure the relationship so that offshore talent becomes a durable extension of your business rather than a revolving door of vendor staff.

Once that foundation is clear, the next logical questions, from where to build that team to how to keep it running in lockstep with your organization day to day, become much easier to answer.

And we’re always happy to have that conversation.

Click here to connect with us here at ECLARO and discuss a dedicated offshore team custom-built for you.