Offshoring means getting work done in a different country. This applies not only to manufacturing but also to Finance, IT, HR, and Marketing.
A Project Manager salary is 7 times lower in India:
Annual Salary
Switzerland $120,000
US $72,000
India $18,000
Should we move most Project Manager jobs to India?
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I think it depends, there are factors that should be put into consideration while making the choice. For example in the case of the project manager:
– Does it requires teamwork? Are the other members in the same time zone? What are meetings going to be like if one person is on the other side of the world? Is it going to affect work-life balance?
– Is there a chance that different time zones could affect the capacity of the company to react to different changes?
I do think offshoring has its benefits, not only on the financial side but also it helps give the projects and the company a newfound perspective on current challenges. Personally, I would not offshore core work in the company, for example, if I am P&G I would not offshore the brand management jobs but would be open to offshoring all the support operations.
Love your example Mariale. If we are at P&G, let’s assume that Project Management does require teamwork, members are in different time zones around the world, we have annual in-person meetings, but we interact on a daily basis through Teams. Whether we offshore it will not, per se, affect work-life balance.
What I love about your example is that is for brand management, something that at P&G is “core”. Can you think about another activity that would be that important for Netflix?
Yes, but interactions between different time zones, even in P&G are not completely ideal, for example being in the headquarters in Cincinnati and having to work on a project with someone in Japan makes for some difficult schedules, can it be done? for sure, is it sustainable? maybe not. One way to help with that would be to have short assignments or limit calls to once a week, which was usually the case at P&G while working on global initiatives.
Regarding Netflix, from what I’ve been reading, they have a hierarchal structure but with modifications to ensure flexibility. I would not outsource for example the strategic side of the business, anything related to the development of the plans of the company is not only important for what the outcome is but also because you need people that are 100% living the companies culture and are involved in a deep way in the vision and mission of the company. You could on the other side have in-house software developers (especially the developers that work with the algorithm) but offshore jobs regarding the maintenance of the system.
I think it depends on the type of job/task. Personally, I would feel more comfortable keeping full-time employees or contractors in the country, and only offshore very specific tasks from the job to help with the workload from full-time employees.
For example: I would offshore an easy data entry task because that would help the full-time employee with more important projects such as meeting with decision makers, clients, etc. By doing this it would increase the company’s profit because employees (not offshore) will dedicate more time to projects that require more time/research/meetings.
I would argue that offshoring jobs selectively to balance cost-efficient and job-efficient is the best option. When a company offshores jobs, there are more factors to consider than just cost. Just to name a few, currency exchange rate, political risk, and culture are equally important when offshoring jobs. Generally, companies should offshore their non-risk, non-sensitive, and high salary discrepancy jobs to countries with relatively stable economies and political environments.
I would say that the decision should be made based on a comprehensive analysis, considering not only economic and financial factors but also geographic factors. One may offshore its departments where its core competitiveness is away from, such as manufacturing and aftersales, but hold its design department in the original country to ensure business security. However, one may offshore their IT department to seek technical specialists and resources, let’s say to San Francisco. In this case, it is more convenient for the company to use the resources directly in San Francisco rather than import these resources to its home country. However, the company should consider carefully offshoring which department and to where.
But all in all, I would say that the ultimate purpose is to help the company become cost-efficient.
I think as an employee, I prefer to work at the company’s physical location instead of working offshore. I think the culture and understanding local customers’ interests and shopping habits are important for business development. Immersing in the local environment will help a marketers to figure out suitable and effective strategies. Also the time difference will influence employee’s health, imaging to have 5 meetings from 10pm to 5am. Some of my friends did offshore works during pandemic, and it is stressful and more difficult than expected. As for the company, offshore jobs can help save the cost of the labors by simply assigning the high-cost position to the low-cost country. It is a good choice for saving the budgets.
I would definitely offshore jobs for the following reasons:
– Hire individuals who are skilled in areas that the organisation’s employees aren’t skilled at
– Faster pace and hence more productive/time efficient
– Don’t have to commit to hiring someone full time
As an employer, we should always see things comprehensively:
– Data Security? Nondisclsure agreement?
– Communication and engagement?
– Culture differences?
– Policies from different countries and regions?
With all the benefits from offshoring jobs, these factors all play an essential role in considering if we should send a specific job oversea.
No, the company should not move most Project Manager jobs to India for the following reasons:
– On-ground presence and communication with the team are essential in building a cohesive understanding and execution
– Better crisis management that can be solve or alleviate in real-time since there’s no difference in time zone
I would accept the offshoring job. But it is very depends on which types of jobs we work at. One of the most important reasons to choose an offshore job is that it will lower the salary cost and save a lot on operational costs. Works become more flexible, employees can work at different times due to different time zones. The company does not need to retrain offshore, because they already know what they should do. However, hiring offshore also depends on what types of jobs. For example, if the company needs a highly technical person or the position offered is at the management level, then this can also pose a threat to the company. Hiring offshore in some sensitive positions may result in technology leak out and information leak out of the company, which may also result in loss of interests of the company.
Actually, I think it needs calculation and deep consideration. For a company which is big and needs more markets, sure it should offshore. Like Apple who offshores its different part of jobs in different countries–researching and designing in US, manufacturing in China… I reckon that offshoring not only can cut costs (less salaries), but also can create customers and markets, making the company more well-known in the country it offshores.
However, for companys who is not big enough, offshoring might not work. Offshoring is that employees working in other countries, which means different time and different languages, and that need money–to make employees in different countries working together, companys have to hire bilinguals and face the risk that working hours are totally different. Companys should calculate that well to make sure that offshoring can earn more than cost.
I would say offshoring is a good option to save cost or tap into specific expertise — it’s also important to define which function would be good to offshore (e.g. whether proximity to the market is important, level of expertise, etc). Typically offshoring operational functions would be useful versus strategic (which would be best kept in the HQs).
I believe that for simpler jobs – offshoring would be efficient and would cost low, while also increasing productivity of the company, but also because of the time difference work would be done in a much faster pace. Also experience, other countries might be more experience in certain areas and would be more efficient to hire from there. However, if it’s more complicated job that needs teamwork and human interactions it would be more complicated to offshore in that case. So it all depends on the job/tasks that are offshored.
From the decision-maker’s perspective, offshoring can certainly reduce costs and increase profits. However, it can also lead to the loss of jobs for existing employees, and you may need to pay substantial severance packages. This could also impact your company’s image and reputation. Therefore, offshoring has both advantages and disadvantages, and decision-makers need to carefully consider these factors.
Having an efficient team depends a lot on communication. Therefore geography and time differences could adversely affect a project’s success if the manager is in a different country with a whole different culture, work ethic, holidays, and time zone. Only when it is for very specific tasks should the work be assigned offshore. Or if the entire team share the same qualities I mentioned before. Additionally, I don’t believe that job positions should be handed out based on the cheapest option. The decision to offshore a position should be based more on the individual candidate and their set of skills rather than the job rate within their country.
Offshore hiring expands the talent pool beyond the home country, allowing companies to find specialized skills and expertise that may be scarce or more expensive locally.
i don’t think that is the best way to save costs or increase efficency. Firstly, it’s less convenient to communicate with offshored employees even with online apps, it’s always easier to get the information more precise in person. Secondly, price tends to rise with the increasing of need, so although the price of Indian project manager is way cheaper now, it would change not long after we move more jobs there.