Offshoring's Impact on Human Resources
When companies choose to save on labor costs by sending jobs overseas, it impacts how their human resources departments operate. Offshoring requires HR departments to communicate across cultures and often across time zones, perhaps requiring technological upgrades or management changes. Their role also includes making sure the overseas workers have the skills and training they need to succeed, since employees and customers will associate their performance with your company.
Any discussion of offshoring business operations should involve HR leadership because of the effect on personnel. The HR staff is most able to determine how the selected company would be able to handle your company's requirements, matching what functions you want to outsource with countries and companies that have demonstrated expertise in those areas. HR also indicates what skill sets its offshore workers need, what training will be required and how to best transfer critical home office concepts such as the code of ethics overseas.
Particularly if a business relocates employees offshore to manage overseas facilities or otherwise represent company interests onsite, the HR department needs to formulate a plan for constant communication with offshore entities. This requires working with local officials to make sure the proper legal procedures are being followed, as well as a willingness to be flexible and adapt to the stylistic and cultural differences. Managing offshore employees also means knowing what operations may be more difficult to outsource to a particular area. Consider local attitudes toward confrontation, for example, before offshoring functions that require the worker to engage with employees or customers in situations where disagreement may be expected, such as appeals of adverse decisions on health insurance claims.
Any offshoring likely requires additional training for affected workers. When dealing with offshored facilities, HR training priorities usually fall into two categories. It will likely need to train those hired to perform HR functions overseas on your company’s specific business practices and expectations, because anyone from home dealing with those workers will expect them to have that knowledge. It also may train employees in American cultural norms and rules of behavior, so they can more effectively interact with your domestic employees and customers.
Moving HR functions offshore likely requires the company to make changes at home as well. Communications equipment may need upgrading to ensure a smooth relationship, and management duties may need to be increased. Even with technological upgrades, communications can be difficult if the host country has issues with its own infrastructure and power system.
When operations are sent offshore, your HR department has to serve as the cultural bridge between the domestic and overseas cultures. Local standards dictate how your business compensates and schedules overseas employees. If there’s a time differential between your office and the overseas facility, you may find that employees are unwilling to work night shifts in their location because of safety or cultural issues. This impacts HR, because it needs to figure out how to fill that gap. In addition, benefits overseas may be different than they are domestically, such as providing transportation to and from work or bonuses for married workers on their anniversaries.
When a business sends some or all of its HR functions offshore, it can complicate how its employees use the services and how helpful they find them. Call centers are among the most popular areas sent overseas, for example, but even if the host country has sufficient English speakers, the difference in accents and slang knowledge can make communication difficult. This may be particularly challenging for employees needing to call in for benefit changes relating to a sensitive event like a divorce or the death of a spouse. If employees don’t feel that the offshored HR operations are as responsive to their needs as the previous system was, it may decrease their satisfaction with the company.