Date posted: 29/10/2024 7 min read

Offshoring to assist business expansion

Offshoring roles can be extremely beneficial when a business is planning to expand, whether locally or into overseas markets.

Quick take

  • Offshoring can be advantageous for businesses seeking to expand, particularly into overseas markets.
  • Businesses based in Australia and New Zealand should look for staff who have experience in the local environment.
  • A range of companies provide offshoring services in areas spanning accounting, payroll, insurance, IT, project management, construction, contact centres, financial planning, marketing, HR, business and subsidiary set-up, and more.

When it comes to the number of businesses in Australia and New Zealand with plans to expand internationally, it depends on whose survey you believe.

A study by global fintech Airwallex from 2022 said 69% of small-to-medium Australian businesses intended to operate outside the country by 2027. A similar 2023 study in New Zealand by Grant Thornton said 76% of Kiwi companies had no plans to expand offshore, leaving 24% who were considering it and just 5% planning to expand offshore in the next 12 months.

No matter what the surveys say, that’s still a large number of businesses looking to make their mark in a new territory. And most that are intending to stay put also have plans for growth.

So, how might offshoring help businesses with grand visions for expansion?

Offshoring vs outsourcing

Before entering such a discussion, says Matt Annear, general manager of commercial partnerships at Intogreat Solutions, it’s essential to understand the difference between outsourcing and offshoring.

“Outsourcing, essentially, is when you go to a company and you give them a list of tasks and they perform those tasks for you,” says Annear. “They will do it within their systems and environment, and they will send the work back once it’s complete.

“Offshoring is different. It’s around the provision of qualified and experienced staff who are based offshore to work for local companies on a permanent basis.

“Companies benefit more from offshoring when they’re not looking at it from a cost-cutting perspective, and instead looking at it with a growth mindset.”

Bringing onto the team a person or group of people based in another territory makes growth, and entry into a new territory, much easier when the time comes.

How does this work?

Matching staff with business environments

For obvious reasons, businesses based in Australia and New Zealand want to employ accounting, finance, and other staff who have experience in the local environment, Annear says.

When offshoring, that doesn’t change. An accountant based in the Philippines might have four or five years of experience in Australian or New Zealand business environments from past offshoring roles.

However, individuals with experience in the territory being considered for growth can also be employed, meaning the offshore staff are truly multicultural—not just in terms of language but also in their regional experience.

“If your plan is to expand into the US, we will find people in the Philippines, for example, who have US experience and who work US hours,” Annear says. “So, the experience and the work schedule match up with that market.”

If such an employee or team exists within an organisation, powerful insights and lived experience are added to the company’s list of advantages as it begins to grow into that country.

Offshoring: start small

There’s no need to bring an entire offshored team on board at once, Annear says. It makes sense to start small.

“At the beginning of an offshoring relationship, it’s all about setting an organisation up for success,” he says.

“Start small, perhaps in roles such as bookkeeping or payroll. And don’t start with five people—start with one or two and use that period for learning. Then you can expand once you’re familiar and comfortable with the processes.”

Ensure the offshoring business linking you with candidates has expertise in the relevant employment area and investigate its cybersecurity framework.

“Most importantly, think carefully about the problem you’re trying to solve,” Annear says.

“Offshoring is generally not about cutting costs. But if it’s about finding new talent and preparing for a future move into a new territory, that could shape the level and type of person you’re after.”

Some businesses, such as Frontline Accounting, Oyster, and Polyglot Group, specialise in certain industries and professions. These organisations cover accounting, payroll, insurance, IT, project management, construction, contact centres, financial planning, marketing, HR, and subsidiary set-up.

Annear recommends researching track records, expertise, and other services offered by offshoring businesses before making a decision.

The right partner ensures not just a good match of individual and company but also offers services such as salary benchmarking, employment contracts, banking, and policies and procedures.

How are offshoring risks mitigated?

The risks involved in employing someone in another country are no different from those posed by local employees, Annear says.

“What are the risks that exist with having someone work from home in Australia?” he says. “Those risks exist no matter where your staff are in the world.

“So, how do you mitigate those risks within your business? How do you have checks and balances to ensure that you and your clients are protected?

“If you have the right systems and processes in place locally, nothing should change just because a staff member is in another country. But the advantages those people offer when you move into a new market can be immeasurable.”