Explaining the Risks of Offshoring with IT Outsourced Recruiting

It’s fairly common in the Information Technology sector to use outsourced recruiting to maintain staffing levels for project initiatives. Outsourcing some or all tasks in technology allows a business to expand with quality work completed by a diverse pool of skilled labor, without much of the overhead. This is critical in a global economy that is continually shifting.

Outsourcing generally comes down to either choosing a localized IT recruiting firm to work with, or using an offshore team. Offshoring has been a part of the IT world since the mid-1980s, when companies took their clues from manufacturing businesses who were tapping into cheap overseas labor to turn a higher profit. It’s not uncommon to hear about a large business closing down its US office and re-opening one in India, the Philippines, or elsewhere.

Risk Factors to Consider

But for the hundreds of growing IT firms across the nation, is outsourcing to overseas workers really the best answer? We would like you to consider the following factors.

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  1. Offshoring has its own unique set of challenges, magnified by cultural and language barriers.  Prepare yourself when working with an overseas team because you will be faced with ongoing language barriers, misunderstandings, and cultural issues. Work styles are vastly different between US and overseas contractors. Sexism and lack of respect for female management still exists in many overseas countries too.
  2. It can take additional people to manage an off-shored IT team in order for it to be productive. If you choose to offshore your IT staff, you should have at least one US manager for every 5 overseas workers. This person has to be the conduit for all information, management of the team efforts, and controlling time and expenses of every project.
  3. There is a high level of risk when offshoring a bulk of your processes to an overseas team.  A big mistake that many IT firms make is sending all their work overseas. This reduces the company’s ability to maintain confidentiality, control project workflow, and maintain a presence in the states.
  4. Expect hidden costs and excessive costs in the form of added time to process requests. While you may think you are saving money with offshoring, you probably are not. This is because typically with an offshore team, it takes more time to manage all processes and this time adds up.
  5. Overseas team management is more complex and hands on. This goes back to some of the cultural factors that are presented, but in general you will need to more closely manage your offshored IT teams. This means having a more hands on approach that includes complex information exchanges and documentation.
  6. Translating data and communicating contracts and project scopes is a continual challenge.  Overseas teams have vastly different ways of understanding project work scopes and contracts, requiring extra time and management to translate and explain every single piece of information in order to get good results.
  7. Not all IT positions are suitable for offshoring vs. using local US-based talent. This is a key factor when deciding whether or not to offshore vs. use a local IT professional. The actual job duties should be carefully weighed for the right fit.
  8. Quality control is often difficult to manage when offshoring IT project work. Consider how your clients will respond to finding out you are taking jobs from US workers and giving them to overseas contractors? Quality can suffer and you may end up losing out.

For more information and ideas for controlling costs in IT recruiting outsourcing, take the time to download one of ContractRecruiter’s eBooks today!

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