Why Outsourcing Is The Future Of Remote Work

The pandemic has taught us that remote work is here to stay. It's no longer a question of whether employees can be productive from afar; rather, it's a matter of how businesses can leverage this newfound flexibility. As labor shortages and rising wages make it increasingly difficult for companies to retain talent, a new trend is emerging: outsourcing jobs overseas.

I talk to five-ten leaders each week about hybrid and remote work, and while a few months ago the exclusive focus was on the return to the office, the conversation is increasingly shifting to cutting costs as the economic situation grows worse. Indeed, the number of people working remotely has been trending up in the last couple of months, according to a LinkedIn survey. And office occupancy averaged across 10 large metro areas fell below 50% after rising above that number in January.

The Rise of International Remote Work

Companies have already embraced the idea of remote work, as they witnessed employees maintain or even increase productivity while working from home during the pandemic. Now, they're taking it one step further by looking beyond our borders for cheaper, yet still talented labor.

According to a recent Wall Street Journal article, 7.3% of US senior managers surveyed by the Federal Reserve Bank of Atlanta said they were moving more jobs abroad as a result of remote work. Nicholas Bloom, an economist at Stanford University, estimates that 10% to 20% of US service support jobs like software developers, HR professionals, and payroll administrators could move overseas in the next decade.

Cultural and Process Shifts Required

Outsourcing jobs overseas is not as simple as swapping out a US-based employee for a more affordable international one. This approach requires significant changes in both company culture and processes. Here are some key considerations for businesses looking to make the leap.

Successful remote work relies on trust. When outsourcing jobs overseas, trust-building becomes even more crucial, as employees are no longer bound by the same cultural norms and legal protections. Establishing trust starts with open communication and transparency about expectations, goals, and company values. It's essential to create an environment where employees feel comfortable voicing their concerns and feel confident that their input is valued.

Working with international employees means juggling multiple time zones and potentially grappling with language barriers. To overcome these challenges, companies must prioritize flexibility and embrace asynchronous communication. This may include implementing a system where employees can leave messages or updates for colleagues in different time zones to access when it's convenient. Additionally, offering language support or training can help bridge communication gaps and ensure everyone is on the same page.

Remote work has already forced many managers to adapt their leadership styles. Managing a team scattered across the globe requires even more finesse. This includes being aware of cultural differences, as what works for a US-based employee might not resonate with someone from a different background. Empathy and understanding are vital, as well as a willingness to adjust management techniques to cater to individual needs and preferences.

International remote work may necessitate investing in new technology and infrastructure. This could include upgrading communication tools, implementing robust cybersecurity measures, and ensuring that employees have access to the resources they need to succeed. Data privacy regulations and compliance requirements may also differ between countries, so companies must be prepared to navigate these complexities.

The Potential Pitfalls of Overseas Outsourcing

While outsourcing jobs overseas can certainly save companies money, there are potential pitfalls to consider. For one, there's the risk of alienating local employees who may feel threatened by the prospect of their jobs being shipped abroad. It's crucial to address these concerns openly and honestly, emphasizing the company's commitment to its existing workforce.

Additionally, companies must be prepared to invest in the necessary infrastructure and training to support their international employees. Cutting corners in these areas can lead to poor performance and ultimately undermine the potential cost savings.

Cognitive Biases: Influencing the Decision to Outsource Overseas

In the decision-making process of outsourcing jobs overseas, cognitive biases can play a significant role, both positively and negatively. By understanding these biases, business leaders can make more informed choices and avoid potential pitfalls. Let's delve into two specific cognitive biases that can impact this topic: the status quo bias and the empathy gap.

Status quo bias refers to the tendency of individuals to prefer maintaining the current state of affairs, even when change might bring about potential benefits. This bias can be a significant obstacle for companies considering outsourcing jobs overseas, as it may result in resistance to change and a preference for keeping jobs within the company's home country.

To overcome the status quo bias, it's important to gather data and conduct a thorough analysis of the potential benefits and drawbacks of outsourcing. By presenting a compelling case for change, business leaders can help mitigate the influence of this bias and encourage a more rational, informed decision-making process. Additionally, involving key stakeholders in the decision-making process and addressing their concerns can help reduce resistance and foster buy-in for the proposed changes.

The empathy gap refers to the difficulty people have in understanding or predicting the feelings, motivations, and behaviors of others, especially when they are experiencing different emotions or circumstances. When making decisions about outsourcing jobs overseas, the empathy gap can lead to a lack of consideration for the impact on employees, both those who may be replaced and those who will work with the new international colleagues.

To address the empathy gap, it's crucial for decision-makers to put themselves in the shoes of their employees and consider the potential emotional and psychological effects of outsourcing. This may involve conducting surveys, holding focus groups, or having one-on-one conversations with employees to gather their input and understand their concerns. By doing so, companies can develop a more comprehensive plan that addresses these concerns and fosters a smoother transition.

It's also essential to consider the cultural and emotional needs of the international employees being brought on board. By developing a deeper understanding of their backgrounds, values, and expectations, companies can create a more inclusive and supportive work environment for all team members.

Understanding the influence of cognitive biases like the status quo bias and the empathy gap can help business leaders make more informed decisions when considering outsourcing jobs overseas. By acknowledging these biases and actively working to mitigate their impact, companies can make better choices that ultimately benefit both their bottom line and their workforce.

As the global landscape of remote work continues to evolve, it's essential for businesses to remain adaptable and open to new possibilities while also being cognizant of the human element that underpins every successful organization. By taking cognitive biases into account, business leaders can forge a path forward that embraces the potential of a global workforce while maintaining a strong and cohesive team.

Embracing the Global Workforce

In an age where remote work has become the norm, outsourcing jobs overseas presents a new frontier for businesses looking to stay competitive. By embracing the global workforce, companies can tap into a deep pool of talent and potentially save on labor costs. We need to remember that hiring overseas talent is an important opportunity for companies to improve their diversity, both from the perspective of DEI and from the perspective of different thinking styles and cultural perspectives.

However, this approach requires careful planning and a willingness to make substantial shifts in both culture and processes. To successfully navigate the challenges of international remote work, companies must prioritize trust-building, adapt their management styles, invest in necessary infrastructure and technology, and ensure clear communication across language barriers and time zones. By doing so, they can unlock the potential of a truly global workforce and reap the benefits of a more connected, diverse, and cost-effective team.

As we move forward into the future of work, businesses that embrace these changes and adapt to the global landscape will be better positioned to thrive. By acknowledging the potential pitfalls and proactively addressing them, companies can harness the power of overseas outsourcing while maintaining a strong, cohesive, and committed workforce.

The next wave of remote work is here, and it's taking us beyond our borders. The question now is, are you ready to ride the wave and make the most of the opportunities it presents? The future of work is global, and it's time for businesses to think big and act boldly.

Source: Dr. Gleb Tsipursky