How To Use Outsourcing To Keep Your Labour Costs in Check
If you are ready to expand your company, there are plenty of exciting perks that come with it. It allows you to bring new, fresh minds onboard, gives you the unique experience of watching them evolve and shape your ideas, and eventually bring them to life. Nothing is more powerful than letting somebody else have a look at an idea that you’ve been picking at for months and give a fresh perspective, regardless of whether it’s an event plan, logo design, or draft lineup.
However, bringing new members into your company does drive up labour costs, especially if you’re hiring only within the United States or Canada. This is where outsourcing can make all the difference. And by outsourcing, we don’t just mean hiring cheap labour from developing countries; we take outsourcing to mean hiring talented, passionate, and motivated professionals from around the globe, which can also include hiring expats who have chosen to live abroad.
For us, one of the biggest perks of outsourcing is the ability it gives you to hire more people and get more done, simply because it is such an effective way to drive down labour costs. It allows you to expand your team, divide tasks, and make use of some of the amazing talent that’s hiding outside our borders.
Here are some examples of the difference in labour costs between Canada and other parts of the world:
Basic task worker: Vancouver, Canada: $12/hr vs. $3/hr in India.
Intermediate software developer: Vancouver, Canada: $70,000 p.a vs. $24,000 p.a in Croatia.
Marketing manager: Vancouver, Canada: $42,000 p.a vs. $18,000 in Argentina.
Our company turned to outsourcing only a few years ago, and we’ve decided to reflect on our experience and put together this guide to help you you expand your business while making sure your labour costs stay manageable. Here’s how:
Prepare for R.O.W.E (Results Only Work Environment)
If you want to reap the benefits of outsourcing, you’ll first want to prepare yourself and your team to work productively in a Results Only Work Environment (ROWE).
ROWEs differ from traditional work environments because they are built around flexibility and individuality. Every person is given the freedom to work whenever and wherever they want, and they are only ever assessed on their ability to complete their work on time and to standard.
Our entire team works in a ROWE, with different teams based in Canada, India, Croatia, and Argentina. Here is how we prepared our team to work in this kind of environment:
Clear and Concise Documentation
The first step to effective outsourcing lies in effective documentation. It is absolutely crucial that you start clearly documenting all your strategies and processes so you can pass them on to your outsourced team at a later stage. Make sure you use a software that is user-friendly and accessible for everyone (we use Google Drive, for example).
These documents should clearly outline how each department/division of the company works, and explain everything from that department’s strategy down to the individual tasks that someone working in that department may be expected to do on a regular basis.
The most important factor to consider when documenting is clarity. You want to be able to give these documents to someone who has never had anything to do with your company and be certain that they know exactly what they need to do once they’ve read the relevant documents.
You also do not want your documents to be too wordy. Make sure to be concise, and only touch on the things that are important to the people who’ll be reading the documents you are creating. It may help to work with a professional writer here.
The way you structure and organize your documentation is completely up to you, just make sure that you pick a style/format and stick to it.
Below you’ll find a basic outsourcing scenario and a short guide on how we would prepare the appropriate documentation to make it happen:
Lets imagine you want to outsource your marketing department. The first thing you would want to do is create a document that clearly outlines the strategy for this department, including its purpose and goals. At myZone, we call this a Departmental Strategy Document.
From there, you would want to document all the programs that the marketing department is responsible for. Lets say your marketing department is responsible for managing your website’s blog; you should create a blogging program document that outlines the purpose, goals, and strategy of the marketing department’s blogging program.
Once you have done that, you finally want to document all the processes that fall under the blogging program (such as posting on the website’s blog, or sharing on of your blog posts on Facebook). These final documents should have clear step-by-step instructions that outline EXACTLY how someone from your marketing department can complete daily tasks.
The scenario we outlined above is very basic and specific, but you can apply the same principles regardless of the process/department you’d like to outsource. The most important thing to remember is that clear and concise documentation is the key to starting off your outsourcing on the right foot.
Don’t expect to be outsourcing your biggest and most complex processes right from the start. When it comes to effective outsourcing, it is best to start small. We started by outsourcing simple tasks, such as creating company emails and giving administrative access to our websites to new employees. From there, we worked our way up to outsource entire divisions of our company.
Document the small, tedious, and monotonous processes that you do on a daily basis, and try outsourcing them first. This will help you get your head around what’s involved, and will serve as good practice before you try outsourcing any bigger processes.
Assess Your Options
When it comes to outsourcing, there are plenty of places you can look for valuable new team members. Like we previously mentioned, we currently have three outsourced teams working from India, Croatia, and Argentina.
While we can only speak from our own experience, we find that where you outsource slightly depends on the work that you need done. For example, our entire development and design team are based in Croatia, while our content team is currently spread out between Argentina and North America. We would recommend that you look into these markets if you are thinking about outsourcing similar parts of your business.
If not, we recommend you shop around and speak with a variety of outsourcing companies. It pays off to invest some extra time in getting to know each of them to see which one is the best fit for your business.
If you are looking to outsource development, design, or content work, feel free to contact us directly as we may be able to point you in the right direction.
Set Your Expectations and Monitor The Performance Of Your Team
Set Some Clear Expectations
Once you’ve found a team that you’re happy to work with, it is vital that you work with them to set some clear expectations for what you want them to do. Sit down and make sure you iron out all the details of what you want them to be responsible for, what you want them to bring to the table, and how you will be monitoring their progress. A great way to do this is by setting some realistic Key Performance Indicators (or KPIs) for your team.
KPIs are a collection of quantifiable measurements that you agree on with your team in order to reflect their success. KPIs differ depending on the kind of work you are outsourcing. If, for example, you are considering outsourcing your social media department, your KPIs may be the amount of likes/shares/comments your company page gets on a specific social media platform such as Facebook, and the amount of click-throughs you get from posts/update to your website.
Remember, while KPIs are a great way to tell you whether the work you set is getting done, they do nothing to tell you about the quality of the work that’s getting completed. This is something you need to take upon yourself, and we will explain it in more detail later on in this article.
Working with your outsourced team to set these KPIs early will help you in the long run, as it’ll make it a lot easier for you to keep focused once the ball gets rolling.
Once you have found a team that you’re happy to work with, make sure they are fully aware of their responsibilities and KPIs. This is where your documentation will come in super handy, not only because the information has already been prepared in a clear and concise format, but also because you’ll be more clear on what you’re looking for.
Makes sure you give these documents to your outsourced team, and work through them together so you can rest assured that they know exactly what you want from them. Also make sure you allow their team to reflect on the KPIs and expectations you’ve set, and listen to them if they think they are unreasonable/unachievable.
Finally, ensure that every member within your new outsourced team is clear on their roles, responsibilities, and KPIs, and then let them get started.
Monitoring Performance, Controlling Quality, and Refining Processes
Once your new outsourced team is on their way, make sure you remain in constant communication in order to stay on top of their performance. Quality control is a super important aspect of outsourcing, and something we’ve found many companies struggle with.
The issue with outsourced work usually doesn’t regard the team’s ability to meet their KPI’s; most outsourced teams are more than capable of “getting the job done,” but the actual quality of the work they are completing can sometimes become an issue. This is where active quality control is key.
Keep the KPIs you set at the beginning in the back of your mind, but don’t let them get in the way of analyzing the actual standard of the work that’s getting done. Remember what we said earlier: KPIs are great for telling you whether your team is doing their job, but they tell you nothing about the quality of the work they’re doing.
If you do find yourself having issues with the quality of work your outsourced team is producing, there are a few things you can do:
First of all, do not blame individual people for the lack of quality. Instead, blame the processes you’ve put in place. Revise the documents you created at the beginning, and work with your outsourced team to refine the processes you included in them.
Once you have done that, continue monitoring the quality of the work the team is producing, and revisit/revise the processes you’ve outlined until you finally reach the standard of work that you are happy with. You may need to do this several times. This brings us to our final point:
Don’t Throw In The Towel Too Early
When outsourcing, perseverance is key, so keep at it! This is a huge endeavor, and it can take a long time to get the hang of things and start seeing the results you’re looking for. We spent countless months preparing to outsource some of our processes, and countless more to find the talented teams with which we work now.
Remember to dedicate some extra time and effort into producing clear and concise documents, and also make sure you’re ALWAYS clearly communicating with your outsourced team. Like we said, this is no ‘quick-fix’ solution, but spending the extra time doing things right at the start will make things a lot easier for you further down the track.
Remember, don’t expect to be outsourcing your most complex tasks first. Start small, and build your way up from there. Actively monitor and control the quality of the work that is getting done, and keep revising those processes until you hit the sweet spot and start seeing the results you want. Once you’ve done that, you can step things up a notch and start outsourcing bigger, more complex tasks.
If you have any outsourcing tips that you think we didn’t touch on, make sure to let us know via the comments below. Also feel free to contact us for any extra help with outsourcing some of your labour.