IT Staff Outsourcing From Foreign Markets Is Not Always the Best Solution

• #Outsourcing

The benefits of outsourcing IT services to the developing world are well-known and widely discussed. A huge pool of extremely talented, loyal candidates at a fraction of the cost. Who cannot like that?

Almost every company, regardless of whether its main product is IT services, has an IT department. Although this is most relevant for large IT teams, companies often stop long-term and profitable projects when faced with a shortage of IT employees.

In such cases, companies look for solutions: they turn to recruitment companies or increase their hiring capacity. But one of the most frequently considered options is outsourcing IT staff from foreign markets. What are the myths of this process and what should be considered before taking this option? We are talking to Aušra Bendikaitė, General Manager of Stafferty Baltics.

Aušra, can you briefly comment on why companies turn to foreign markets to outsource IT employees?

"Frequently, companies experiencing a shortage of IT employees begin to consider the transfer of IT services to another country, usually to developing countries characterized by cheap labor. Companies looking for IT employees in foreign countries hope that they will suddenly have an unlimited choice of IT employees, thinking, that they will be able to offer a significantly better salary compared to their local market and to guarantee themselves a loyal and talented employee. However, how international, large companies see the labor market of developing and economically weaker countries does not quite correspond to what has developed. Popular myths also still exist that are the main reason IT workers are sought after in foreign markets.”

Could you provide the most important myths surrounding the outsourcing of IT staff in foreign markets?

“First of all, it is not as cheap as many think. Yes, maybe in some cases you will pay less than you would pay a local employee, but will the quality of work meet expectations? In most cases, the real top-notch service providers or contractors charge a good amount, regardless of where they are based.

I also must disappoint you – no, there is no such dark warehouse where all the most talented IT workers are sitting locked up and waiting to be assigned to some project. Talent shortages are real everywhere in the world, even in developing countries - in many cases good developers are even harder to find there than in the West!

It is important to add that IT staff turnover is high worldwide, regardless of the pay and conditions offered to them.”

What challenges can companies face when outsourcing IT specialists from foreign markets?

“Perhaps the most important challenge is cultural differences. What is perfectly acceptable when solving problems or reaching out to someone in one culture may be seen as very rude or confrontational behavior in another. How stakeholders interact with outsourcing partners will have a huge impact on the success of the project.

Another big challenge is the language barrier. It goes without saying that large companies will speak English in today's market, but quite often the accent specific to each country or region prevails. Imagine if a company employs a person whose native language is French, who speaks English, but with an accent, and this person must coordinate work issues with a person living in India, who also speaks English, but again, with a completely different accent. All this can lead to many misunderstandings and miscommunications due to the language barrier.

Depending on where the company is established, the time difference between the department and the place where the staff works can be as much as 12 hours. Therefore, it is important to note that not all employees may be ready to help or communicate in the middle of the night.

It is important to mention quality-related issues. The bar is often higher, but the expectations and reality of what's on the market just don't match. Quite often, companies operating in England or the USA and wanting to hire IT workers in the Philippines or Vietnam have been disappointed, realizing that the expectations do not correspond to reality and the employees’ ability to fulfill them.

Lastly, being a freelancer is not only acceptable but desirable in many parts of the world. Temporary workers are usually paid 2 or 3 times more than their permanent counterparts and have many interesting companies and projects waiting to use their services. This can lead to difficulties in finding long-term employees.”