Advantages and Disadvantages of Outsourcing

When it comes to outsourcing I am an expert. I have made every mistake possible costing me tens of thousand’s of dollars or more over the years.

If outsourcing some of your business overseas appeals to you, and it should, then read-on to get a small taste of some of my 20+ years of experience. 

Advantages and Disadvantages of Outsourcing

As you may (or may not) know, outsourcing work or various projects, whether it be website development, social media, SEO, copywriting, or graphic design, etc. can be quite lucrative if you are able to resell or arbitrage the services of others at a higher price.

Sites such as eLance, UpWork, or Freelancer are great places to find people for all sorts of work that you might need done or that your clients may need.

Each site has thousands of freelancers ready and waiting to work for you on almost any type of project conceivable. I will say though, that getting out of those sites and going direct is by far the best move I ever made… as I was no longer limited by the mimimum rates some of the aforementioned platforms forced upon me and therefore I could negotiate much better rates.

Here, at Crucial Advantage, I currently have two Virtual Assistants in the Philippines and 5 full-time developers out of India helping me on various personal and client-based projects. In the past I’ve had as many as 15 full-time outsourced staff in countries such as Bangladesh, Ukraine, Pakistan, India, Spain, U.K., China and more.

Outsourcing Can Suck

Let me tell you straight off that having virtual employees is not easy and is certainly not a game.

These are ‘real’ people living in different cultures, in different working conditions, and you have to be aware of some limitations they may have with Internet speed, older computers, language, etc. 

But if you are willing to put in the time and effort to find and train the right person/s, it can be very rewarding and fruitful. I have built many lasting friendships and forged strategic business partnerships with some, and if done right, they can make your life much easier while scaling your business and increasing profits.

It took me many years to perfect the formula of interviewing, hiring, and testing to find the right employees or freelancers. I have hired and fired many people over the years and it was not without difficulties.

It required a tough skin to stand up for oneself, so sift through attitudes and BS, and to ultimately go with your gut feelings, yet also be willing to be humbled when necessary, and to not make assumptions, yet at the same time to not get taken advantage of. If you have teenagers, you know what I mean!

Do not be fooled by what other’s say, those who promote outsourcing as easy and lucrative, especially if you yourself lack direction and proper planning in your own business and projects. Like any area of business, people tend to more often than not, sell the sizzle and rarely paint an accurate picture of what goes on in the trenches.

Are Good Freelancers or People to Outsource to Difficult to Find?

You will sometimes hear people say that you can’t find good people on Upwork, Freelancer, Fiverr, or similar sites… telling you that you should use a 3rd party outsourcing agency to get the best vetted people.

But honestly, these companies charge exorbitant prices and are making at least 100% profit or more on the rates they charge each month. The fact is that it is just not true.

If you wonder why good talented people would be on these sites, it is simple. Just like anywhere in the world, people need work, and getting employment (at overseas rates) is not easy in a lot of the less-developed countries.

Once you find good people, try to get them out of those sites and go direct… but only once you know they are trustworthy and reliable. That is what I did and now I have access to as many people as I need at rates you could not even imagine.

Unless you have lived in the Philippines, India, Bangladesh, China, etc., you don’t know what their living conditions are, especially in certain areas of those countries, or the opportunities or lack there of.

Outsourcing is Not Bad

There is nothing wrong with outsourcing, just as much as there is nothing wrong with offering your services on one of these sites, or selling your products and services overseas.

At the end of the day the only thing that matters is that the work is completed well and that your business is successful. I was able to multiply my client base because I outsourced and leveraged my time and my skills with that of others. 

If fortune 500 companies are making millions of dollars profit a year and they do so by outsourcing parts of their businesses, then so can you! Besides, it is no-ones business what you do as long as you deliver.

It is true that the more you are willing to pay, the more likely it is that you will find someone with more experience. But there are no hard or fast rules. In some cases, lower cost assistants may take longer to complete tasks than more expensive ones, in effect negating the perceived savings, but that is not always true. In fact it is not. 

Hiring someone from major cities versus smaller towns will cost you more. Hiring from agencies, rather than direct can be limiting for many reasons, like hours they work, loyalty, etc. etc.

Communication Is The Key

At the end of the day good communication is the key…. and I mean YOUR communications with them.

The better you communicate, the more effective your workers will be. Period. There is always a period of time at the beginning where you have to establish your expectations and of getting them up to speed. Factor that in.

There is no 100% set and forget in any employee relationship. I personally use Camtasia to record video explanations and walk-through’s of everything I need. A video is worth a thousand words and saves at lot of time. Skype is great to for chat and screen sharing.

I also make sure to delegate work in bite size pieces and build upon the project in increments until I am sure that they know what to I expect of them. If you are outsourcing then the best country to use will depend upon what services you require.

For instance, coders are great out of India, Bangladesh, Pakistan… but not all are great with WordPress so there may be a learning curve there if they have no real development experience with it. But you may have to work a little harder to get aesthetically pleasing results.

If you want a virtual assistant, Philippines is by far the best. For graphics then more western or eastern European people are better. It just depends.

What If I Get Ripped Off?

Firstly, outsorucing freelance sites all have feedback and escrow systems where you can dispute work that was not completed properly.

Also, most freelancers on these site are looking for regular work. People will take less just because you want them for the long-term vs a one-off project.

It is important however, to realize that ratings do not always accurately represent a workers quality of work as different projects require different skill sets.

Some employers have unrealistic expecations and are unnecessarily hard on outsourced freelancers. So read the comments, but always go with your instincts and make sure to ask the right questions in your interviews.

Generally, it is unlikely that you will get ripped-off via one of these sites. But from other outsourcing sites or from hiring direct where there is no management of the hiring and employment process, you can be more exposed. 

When hiring, always test your freelancers, be smart, be patient, and do not give them access to parts of your business until they have proven themselves as loyal to you. 

Also, never use the same passwords across everything you have passwords for. For example, your PayPal password should not be the same as your website, your social media, etc. Many sites allow you to create sub-user accounts to access them and you should use those whereever possible for added protection.

I have only ever had one person try to steal from me and used my PayPal account to make purchases on other websites. Luckily, my bank noticed as well as PayPal, and I can assure you that won’t ever happen to me again. Other than the inconvenience it was no great loss.

Other than that… I have never had a hint of a problem.

How To Pay Freelances or Outsourcers

Obviously if you are on one of the freelancing platforms that is taken care of for you. However, if you are going direct, then there is only one payment platform I recommend. Remitly.

PayPal is no good in most 2nd-3rd world countries and many payment platforms such a Zoom will shut your account if they realize you are using them for employment services. Remitly is just the best.

It’s easy to use, effective, and inexpensive. Under $4 per trasnaction or in some cases free for different methods of payment and countries.

Freelancers Have a Lower Commitment to Professionalism

Who said?

As a matter of fact, depending on the country, they are far more respectful than their more costly and entitled western counterparts. Sorry, but it is true.

Again, everything comes down to clear communication. Do not expect a freelancer or outsourced employee to deliver things on time if you keep changing your expectations or adding additional tasks to the project. Change of mind equals increased time.

Ask for timelines. Ask for feedback. Be available via Skype or whatever to help guide the project along. Make sure that you are available to answer questions, and check the work as they go. Otherwise, the only person to blame is you. Sorry but it is true. 

Language Barriers Make Outsourcing Difficult

When I personally hire anyone, my number one criteria is that they speak English fluently (my native tongue).

Yes other skills are important, but if you cannot communicate with your freelancer then it doesn’t matter how good they are. You can always train people to do tasks, except maybe programming or more skill-based tasks, but communication is still number 1.

I always hire people with a positive can-do attitude. In the interview process which I do via Skype, I get a feel for how they interact with me, their attitudes, and I read between the lines and in some cases the overly zealous promises that they make.

Many times on these outsourcing sites the photo of the individual may not be correct, even the sex. In some cases the person can be much older than the profile shows. It is no different than online dating really. It is a fact, that people are unfortunately biased when it comes to age and sex. So I accept that as part of the process.

Usually, the older they are the more reliable they are… but again… that could also mean they are less adept at tasks related to social media as they are probably not using it as they have a family to feed.

For me it always comes down to attitude. Overly salesy people, that are like a car salesmen, tend not to be good workers in my opinion. My number one hiring tip is to “Go with your Gut.”

Qualifications don’t mean anything, and examples of past work, unless verifiable, also do not mean much. You will need to spend time with them to get them to where you need them to be. That is always the case.

Take everything into consideration and test them out.

Remember, there are plenty of people looking for work. So don’t just go for anyone or the cheapest or the most expensive. If you are willing to be patient you will find gold. 

Outsourcing is Cheap and Effective 

Not any more! India is getting more an more expensive as western influence settles in more and more over time.

While hiring a freelancer on eLance or Upwork is usually quite affordable, that is changing all the time. When UpWork changed their minimum hourly rate to $5, I could no longer use them for virtual assistants as I could get them for much less with better quality work.

UpWork made the assumption that would make the quality of work better, but the truth is, they were wrong and based that on many complaints from people who did not know what they were doing when hiring freelancers. I stopped using them since and have no idea what changes they have made since.

In some cases you do get what you pay for. So it is a balancing act. Outsourced employees can require more hand-holding, and at odd hours, which is a pain. Having a local person that comes to your office or at the very least lives in your timezone is huge and productivity of local people is usually much better and there is less effort to communicate your needs.

Also with less developed infrastructure in foreign countries, they may have older computers, much slower internet connections, and things like that that make them work-less efficiently not due to a lack of skills.

Also, be wary of freelancers bidding low-prices on projects to get attention and then trying to jack the bid price later when you are looking to hire them. I always confirm their bid or hourly rate before I get into anything else and I block them immediately if I feel deceived.

If they lie on their bid, I’m not interested. No second chances. Have everything in writing. Have a clear plan and outline of what you expect, of the project or work required, see if they read your job post by giving specific requirements in it for them to do as part of their application.

I want personalized attention, not canned responses.

Conclusion

Last but not least, be kind, and be generous. These people depend on you for their livelihood. They have feelings, they have thoughts, and they are humans. Treat them as such and you will create life-long friends and loyal employees. 

If you are looking for full-time Virtual Assistants from the Philippines that can help with Research, Social Media, SEO, website management, office-related tasks, etc. then I can help. I can also offer full-time programmers from out of India at great prices. These are fully-vetted people and are sourced directly from my contacts overseas at great hourly or monthly rates.

If you are interested in pricing, cost, and further details, please contact me at:  zimmaron@crucialadvantage.com 

Originally posted 2015-02-13 04:33:00.