Going Offshore For Workforce? Don’t Miss These 4 Tips
There’s a saying in big business that “your product is only as good as your team.” And I believe that 100%. That means, when you’re securing workforce for your budding company, you need to find the best. And sometimes that best can only be found outside the United States. This is called offshoring, and it happens when U.S. companies go to other countries to find their employees. The question is how do you make sure an offshore workforce brings your company success and not the other way around. In my experience of building three companies from idea to exit, I’ve learned the good, bad and the ugly of offshoring. Here are four essentials to making sure your offshore startup venture is a success.
1. Put someone from home base on the ground. This person should be a seasoned expert in the field, should know your company well and have worked with you before. This person can manage the offshore team day in and day out. Their loyalty and knowledge of your company will help bridge the gap between you and the offshore location. It’ll be easier to share important updates and prevent potential conflicts. When I built my tech company Cartiza, in 2007 I considered several offshore locations and ended up in two – Bucharest, Romania and Toronto, Canada. The Romanian location was a disaster. Why? One single reason – a lack of offshore leadership. We hired someone local based on a referral to be our lead person. Communication and product development suffered because we didn’t have anyone from home base on the ground to translate what needed to be done when and why. The Toronto location, on the other hand, worked very well. The team leader was someone from our home office who moved to Canada to start and manage the project.
2. Pick your offshore location wisely –Be sure to research which countries and cities are amenable to working with U.S. firms. And remember, the list changes yearly. Talk to friends and partners about where they have found offshore locations. When I was looking offshore for Cartiza, a friend mentioned a successful endeavor in Canada. But that experience wasn’t the only reason Canada proved to be a good location. Canada has an abundance of engineering talent – 13,000 new engineers graduate each year to join the already existing 270,000 experienced engineers working there. By comparison, in Silicon Valley, there are many talented engineers, but the majority of them are soaked up by the bigger companies like Apple, Facebook LinkedIn and Google. Canada also has government refunds for part of the research and development expenses to the tune of 50% to 60%. Additionally, Toronto is a global top 10 hub for life sciences and home to the MaRS Discovery District – a 1.5 square million innovation center that brings startups, government and corporations together to increase innovation. Canada is such a fantastic place to offshore that companies like Google and Facebook maintain huge locations there to take advantage of the skilled workforce and overall benefits. Last week Salesforce.com announced a new incubator they are opening in Canada, which is essentially a version of R&D to help contribute to their company. Canada isn’t the only place with perks. Other countries like India and South America have equally as interesting offers as well as a pool of talented and reliable engineers.
3. An ironclad communication protocol. The lines of communication must be strong between headquarters and the offshore location. Typically, the headquarters and offshore sites are in different time zones, which makes communicating challenging. Establishing a protocol of timing and frequency of communication is critical to ensuring that the whole team – at headquarters and offshore — can work well together. When I was with Siara — which was headquartered in Silicon Valley – we also had a Vancouver outpost. Their team was responsible for a part of the software development. The leader was a co-founder of the company and once every two weeks, he came back to Mountain View, California, to meet the home base team. This ensured continuity in the communication between the locations. If there is a lack of communication, I guarantee you that the outcome will be a disaster.
4. Keep management involved. Founders and company leaders should travel to the offshore sites frequently. With Siara, I took trips to my offshore sites to meet and interact with the team at least once a month. I could touch base with our management team and review product requirements and development status. It’s essential that either you or someone from your top management team visit the offshore location at least every two weeks. The offshore team needs to feel integrated with the top management. This helps build bonds. When you visit in person, you can share the company vision, help rally troops and communicate the company’s objective. This personable approach of visiting the offshore site frequently helped build a strong relationships that helped us meet our product development objectives.
If you do it right, using an offshore workforce to build your start up can speed up growth and help you in the expansion stages. If you do it wrong, you can lose precious time and resources. What makes offshoring a win for any company is the personable, face-to-face approach that builds strong relationships to help everyone work together to fulfill your startup’s vision.