7 Challenges When Nearshoring & Offshoring Business

Nearshoring and offshoring—whether it’s individual jobs or entire teams and projects—are on the rise.

These global workforce strategies involve delegating business tasks to individuals and companies in other countries than your own.

While international outsourcing can scale operations, there are some challenges along the way. It’s important to be opened and honest about these as you’re building out these strategies!

So, in order to proactively build successful nearshoring and offshoring teams, let’s talk about these challenges when outsourcing and how to address them ahead of time.

Nearshoring & Offshoring Challenges

1. Cultural Differences

When working with third-party vendors and service providers in foreign countries, you’re likely to encounter some form of cultural differences. Each country or region has its own expectations and standard practices for doing business. Even if you plan to nearshore services, there may still be some cultural nuances to consider.

Cultural barriers can cause breakdowns in communication and make it more difficult to maintain positive business relationships with your outsourcing partners.

Solution: By proactively researching and understanding each business partner’s cultural norms, you can build your cultural intelligence and ensure that you conduct business in a respectful, productive manner. Having people on staff who understand cultures from both areas where teams are located helps.

2. Language Barriers

If most people at your company speak a different language than your outsourcing partner, you may experience a breakdown in communication. Although modern translation tools make it easier to connect with people who speak different languages, working across a language barrier can still increase the chance of misunderstandings.

Solution: Be sure to ask clarifying questions to ensure that your service providers understand your requests, requirements, and specifications. Make documentation accessible in multiple languages to ensure that both you and your partners have the necessary resources.

Hiring an on-staff translator or working with bilingual team members can also help facilitate accurate communication between you and your service providers.

3. Cross-Cultural Collaboration

The culmination of the first two points is cross-cultural collaboration.

Beyond cultural differences and language barriers, companies must learn how to truly collaborate with their partners when building a global workforce. There needs to be a structure for building bridges and managing cross-team functions. Not only do team members need to understand each other, they need to know how to work together.

Solution: Build a management layer whose focus is to build bridges and close cultural and language barrier gaps between teams. How will a manager in America explain things to a manager in Mexico and vice versa? Who will help bridge those gaps? Who will take what one team wants and be able to translate it and still communicate the business needs? Consider building in this kind of structure to your teams when building a global workforce.

4. Scheduling

Outsourcing may involve working with a company in a completely different time zone than your own. This requires you and your outsourcing partner to work asynchronously and find ways to touch base outside of business hours. Blending teams from different cultures is tough. Then those teams existing in totally different time zones can add another challenge.

Solution: Establish overlapping business hours where you can touch base and communicate about urgent projects and establish regular communication through email and messaging platforms.

If you need support throughout your business hours, you may want to look for companies that offer 24/7 assistance. This can help you eliminate scheduling challenges related to working across time zones.

These can be done by having a partner that manages various global capability centers.

5. Quality Control

Any time you outsource a process or service to another company, you give up a level of control over your operations. Because you’re not directly overseeing how the tasks are done, you may eventually encounter quality issues.

Solution: Set clear quality expectations when you first start working with offshore partners, including measurable key performance indicators that you can use to track quality over time. Then, regularly check in to conduct quality audits.

If you identify any concerns, be proactive about bringing them up and collaborating on a solution. Like the previous challenge, having a partner that manages a lot of their international work out of a global capability center can help ensure higher quality.

6. Setting Expectations

Establishing expectations with your business partner is a key step when building a global workforce. When you manage processes internally, you have full control of the work your team completes.

To effectively outsource those processes, you need to come to an agreement with a third-party company about the scope of the work they’re providing. Different companies may have their own standard processes, and it can be challenging to effectively communicate your expectations.

Solution: When meeting with a potential new outsourcing partner, thoroughly discuss the scope of work you’re seeking to ensure they can handle it.

Have extensive onboarding conversations and provide documents that outline your core requirements. Ask your offshore partners if they have any concerns about meeting your expectations to proactively address potential issues.

For example, you may want to check in prior to key deadlines to ensure everything is on track or build wiggle room into your timelines.

Communication and regular check-ins are key for any sort of international outsourcing!

7. International Contracts

Working with an outsourcing partner involves coming to an agreement and drawing up a contract for your business relationship. When you outsource overseas, you’ll need to come up with a contract that complies with the business laws of both countries.

Solution: Consult with lawyers with expertise in the area of international contracts.

Overcoming the Challenges of Outsourcing

With proper preparation, nearshoring and offshoring can be cost-effective, convenient ways to scale and streamline your business.

Staffing companies can address all the potential drawbacks of outsourcing on your behalf, allowing you to focus on your company’s core operations. By choosing a reliable staffing partner, you can enjoy the benefits of outsourcing that can help you navigate these challenges. Insight Global, along with our Evergreen experts, can help.