Offshore Outsourcing: How to Solve these 5 Key Challenges

By Daya Mukherjee Sep 23, 2020
Offshore Outsourcing: How to Solve these 5 Key Challenges

“Do what you do best and outsource the rest!”

– Peter Ferdinand Drucker, an American management consultant, author and educator, whose writings greatly influenced modern business corporations.

The term offshore outsourcing seems like an impeccable business tactic today, but it was only in the late eighties that it was effectively adopted by small, medium and large-scale businesses. After going through plenty of changes and adaptations during the last decade, the powerful outsourcing waves strongly impacted almost every industry, mainly including BPO (Business Process Outsourcing), KPO (Knowledge Process Outsourcing) and LPO (Legal Process Outsourcing).

Investing in offshore staffing services has proved to be a life-altering experience for numerous business owners. CEOs from around the world swear by the cost-effectiveness and peace of mind that comes naturally with offshore outsourcing. However, there are some major challenges associated with this business model (as they say – no pain, no gain). Here are the top five challenges of offshore outsourcing and the solutions to overcome outsourcing problems:

5 Top outsourcing problems/challenges and solutions

Challenge#1 – Feeling of Uncertainty for In-House Employees

Let’s say it out aloud – we all have bills to pay. Job insecurity is always a big concern for employees. The announcement of outsourcing work could be alarming for your in-house employees. This situation can affect the bottom line of any company aspiring to outsource work. Let’s understand how!

As soon as you break the news of outsourcing work, in-house employees get the feeling that the organization is cutting costs and hence, their jobs might be in danger. So much so, that they start looking out for other work opportunities, which in turn increases the company’s attrition rate and decreases the work performance rate. This panic among existing employees is probably one of the biggest challenges when you talk about outsourcing problems and solutions.

In outsourcing, attrition is expected up to a certain extent. In such a scenario, retaining your in-house employees is very important. Experts suggest building up a multiple-domain excellence centre, wherein your existing employees can develop skills in different functional areas and processes. Not only will this make your workforce more versatile, it will also make your employees feel more confident and less fearful of losing their jobs.

Challenge#2 –Whom to Choose?

To cater to the increasing demand of offshore staffing services, hundreds of outsourcing providers have jumped into the market to try their luck. Such cut-throat competition makes it all the more important for you to choose the right outsourcing partner. This is probably the very first step towards ensuring the success of your entire outsourcing process. Collaborating with an inappropriate vendor may lead to misunderstandings and frustration, subsequently resulting in messed up or delayed project deliveries.

In order to ensure that you do not select the wrong vendor, you should follow this step-by-step procedure that experts swear by:

  1. Make a list of your requirements (whatever work and support you need from your remote employees).
  2. Shortlist some trusted service providers in the business, and then see who all can fulfil your project requirements in the best way possible.
  3. Most outsourcing service providers offer free trials or test runs to help you be doubly sure of your decision. This is a must before trusting them with long-term contracts.
  4. Get an all-inclusive service agreement in place and do not forget to read the terms and conditions before signing it.
  5. After successful implementation of a project, always be in touch with your virtual employees to monitor the main performance pointers closely. If possible, provide small but frequent appraisals.

Challenge#3 –Misunderstanding Legal Implications

Business owners facing challenges in outsourcing point out that there is nothing more disastrous than misunderstanding a legally-binding service contract. Doing so increases the chances of failure of your outsourcing venture.

Getting wrongfully trapped in legal implications can be easily avoided by following the local laws. Also, it is best to be open and candid about all the terms imposed by both the parties.

Challenge#4 –Confusing Cultural Tangles

Outsourcing work to a different geographical location is intriguing as it invites a lot of fresh ideas and perspectives to make your business stronger and more unique. But it also brings along two types of cultural differences or peculiarities – professional and regional. Resolving these cultural tangles is not as easy as it seems, but here’s how you can overcome this outsourcing problem.

It is always better to start off after some reassuring spadework. You need to comprehensively study the various complexities involved in the process of outsourcing. This will enable the outsourcer to understand how offshore outsourcing is expected to affect the everyday lives of their remote employees with different cultural backgrounds. To establish a system of cultural coherence between both the parties, you could also try bringing in a robust multi-cultural sensitization program.

Challenge#5 –Losing Control over Outsourced Processes

Discussing outsourcing problems and solutions will be incomplete without speaking about this issue. Many outsourcers forget about the work after outsourcing it, anticipating that it will be completed efficiently within the desired time frame. This can either make your remote team over-confident/complacent, or lose your control over your business functions gradually.

Micromanagement is always a no-no, but you still need to track work progress to avert project management hurdles down the road. This will help you in keeping the processes up and running. You can also be in complete control of the outsourced project this way.


Offshore staffing services usually result in happy endings (thousands of successful outsourcing stories from across the globe vouch for this fact). But due to the above-mentioned reasons, many outsourcing ventures also fail.

Business owners who are planning to outsource must remember that their remote team is sitting thousands of miles away from them, working in a different time zone. Managing this extended team with good practices (as suggested above) can be easier and more effective. Spearheading a strong process development using a 360-degree project plan is important to avoid facing challenges in outsourcing.So, be ready to overcome all your inhibitions and start acting confidently to get there.

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