If the late Ulrich Beck was right about the current structure of Western society, then we’re a culture increasingly fixed to the idea of risk and risk management with the interweaving of science and technology in our increasingly globalized world.
So if we take this strand and move forward to how it relates to businesses that depend on international cooperation with teams, namely outsourcing and its variations (offshore, onshore, nearshore, and staff augmentation) we can can about the risks that are involved as well as how to minimize these potential risks to get the best out of the workforce.
We’re going to look at the risks and risk management of staff augmentation.
Of course, there are the horror stories of outsourced projects and infamous manufacturing operations that make headlines. Everything from extremely shabby quality, incredible hidden costs, monumental delayed timelines, the leaking of intellectual property, and the complete disconnection of communication.
The truth is that staff augmentation is being increasingly used by companies of all sizes to help deal with the day-today operations of business, and has many benefits from reduced costs to providing scalability.
But don’t get caught out. It’s important to do your research when considering the possibility of working with an agency that offers staff augs. Take into account these risks and their corresponding solutions.
First risk: an untrustworthy agency
There’s a lot of agencies and consultancies that claim to provide staff augmentation services. But it’s hard to actually trust a company – especially when it moves in a sea of competition and is half the world away.
When you’re doing your research on companies that you’re not familiar with, it can seem like the uncertainty is so high. How do you ensure a certain quality and standard or work? Do they have the skills they claim to have?
First solution: do your homework
Like the best students in class, be studious and do your research on the company if you want the best results. There are many factors that you can look at when it comes to your capacity for whatever team you need.
These include looking at portfolios of their work and reading case studies. This way you can get a feel of their accomplishments, the caliber of their work, and what type of companies have already trusted them by working with them. ArganoUV has a list of brands that we’ve worked with on our homepage and also on our clients page to give transparency to any potential partner. Because ultimately, achieving good work together is all about clear communication.
Another good way of researching a company is to Google it and check out its search engine strength. Do they have any digital authority in their industry? Do they keep a consistent line of communication and content available for anyone to see and read?
You can find sources of information on a company through their social media accounts. Here you’ll be able to see how they share information as well as where they post. For example, ArganoUV not only posts daily content on its website but also communicates online through social media, using Instagram and YouTube to share nuggets of more personal information about our culture and our workers. Oh, and we also host a podcast, Recursive Business, where we talk shop as well as the wider ecommerce landscape.
When it comes to their portfolio, some agencies and consultancies will even help you research them by giving you examples of their work processes, a list of clients you can contact, etc. Just ask!
Second risk: external dependency
A potential pitfall of outsourcing is that you become too dependent on the team that you hired to carry out a task or a project. Being fixed to an external company that attempts to control the direction of a project – and as crazy as that sounds there are companies that do try to play this tactic.
Second solution: create a transfer timeline
Each outsourced project should come with a clear timeline for when the external team will transfer knowledge of the project (or the technology) to your internal team. Make it as clear as possible and start developing the timeline before you finalize the agreement to work with an external team.
This is not only about setting a date for the transfer. This is also about how the transfer will be done, as well as who will be responsible for it. The greater the specifics of the transfer the smoother it should be able to be done.
Third risk: hidden costs
Most (all?) companies use staff augmentation in part to cut down on costs. However, there are hidden costs that can lessen the gap between what you expected to pay and what you would have paid doing it yourself. And with each unexpected price hike, trust can be knocked down a peg.
Third solution: control your contract
Be as clear and explicit as possible when it comes to drawing out your budget and when it comes time to discuss the contract with your future partner. Don’t assume anything.
Having said that, there is almost no project that runs completely smoothly from beginning to end without running into a road full of bumps along the way. That is why it is important to include as much as possible any likelihoods that may occur in the contract. Or consider putting in clauses that refer to hourly rates for extra work, etc. before the project begins.
Fourth risk: delays
Any big project is difficult to plan. It would be very difficult to think of every minutuare that could go wrong; the planning process can never work to perfection. Technical issues tend to have a way of cropping up. And beyond the technicalities, there may be changes in staff during a project that would be unforeseen.
Fourth solution: test responsiveness
There are times when an issue appears that just can’t be planned for. Yet, the important thing here is that you can not only trust but have confidence in your staff augmentation team to take care of the issue. Perhaps they’ve been upfront with you before about which challenges they have faced in the past, and how they managed to resolve them. You should feel confident in them through regular and consistent communication between the two of you.
Before you sign any contract, get them to discuss with you what type of delays they have experienced in the past, and what they learned from these experiences.
Fifth risk: different time zones
Despite remote working becoming more and more part of the normal way of doing business, the physical location of the partner business can play a big part. Companies that decide to outsource can find that the time zone really matters when it comes to communicating, monitoring, and working together.
Of course it’s not an automatic disadvantage to offshore parts of your business but the farther it is away from you the greater the distance in time and most likely culture and language.
Fifth solution: consider nearshoring
If you’re concerned about expanding your capacity with a team outside of the US then you don’t only have to consider offshoring. Consider nearshoring. By being closer geographically, culturally, and likely linguistically, nearshoring makes greater sense for greater compatibility. For example US companies working with agencies and consultancies with teams in Mexico and Argentina.
In particular, Argentina has the highest level of English proficiency in Latin America as well as one of the more developed educational systems.