Get Offshore Leverage
How offshore flexible employment saved my businesses
This week alone I heard from three (3) different founders that are desperately trying to get out of their office lease, while cutting up to 25% of their staff. Unfortunately, office leasing landlords aren’t in the habit of rent relief and their employees are straddles with severance costs. Absolutely soul crushing.
Here is what we’ll cover this week:
- How offshore flexible employment saved my businesses.
- Time Tracking software Hubstaff keeps the offshore team honest.
- Offshore talent retention tip – Small town vibes.
“In a sea storm, there are two (2) types of boats that survive – speed boats and ocean liners. All other boats get washed away at sea”. That quote has always stuck with me. Be nimble and be fast, or die.
When my 1st company Sales for Life had a financial meltdown in 2018, I need to cut cost FAST. I had to find a way to reduce or eliminate some of the following:
- $7,000/mo office lease
- >$200,000/mo in employee salaries
Employees are like office leases, sign that contract and there are long-term deferred liabilities you don’t think about.
- Unpaid vacation / PTO
- Benefit packages
- Outstanding reclaimable expenses
- Capital equipment (office equipment)
You want to cut staff, but then you realize there are months and months of long-tail costs associated with each employee you cut. In Canada in particular, the owed severance amounts can be catastrophic to businesses, to the point where letting someone go is too expensive. Better to let them stay on the payroll and fizzle out – which is no good for anyone. As a founder you are angry at the idea that YOUR money is leaving YOUR pocket to pay expenses that will have no material benefit to your company months from now. It hurts, I know…
Unfortunately, part of business is letting teammates go for various reasons. Since offshoring, I can terminate talent and replace that talent in 30-day cycles. Productivity is rarely lost. Expenses are so minimal that there may only be a few weeks of payment overlap.
Don’t accept North American employment severance challenges to be your default status quo. There is absolutely optionality out there for you.
Time Tracking software Hubstaff keeps the offshore team honest
Moonlighting is a reality. Your onshore and offshore team will do it. As you grow and scale an offshore team, these teammates are more accustomed to remote time tracking software as part of their daily routine. This isn’t intrusive in a remote-first world.
The benefits of this played out in my own marketing team at Pipeline Signals. We had a teammate that was actively moonlights DURING the hours of operations of our scope of work. I personally don’t mind our offshore teammates having 2nd jobs, side hustles, other businesses, etc. – as I’m a believer that great teams start with project or fractional work until full-time work is absolutely necessary. But not during MY scope of working hours.
Time Tracking tools like Hubstaff (which we leverage) can capture these moments so you can have objective, critical feedback conversations. This helps you avoid the “why aren’t you able to finish tasks/projects at the same capacity as others?” You have the empirical evidence right in front of you.
Don’t be shy to leverage technology like these, specifically for “Level 1 = Crew” teammates. These teammates are already accustomed to this technology, and may have yet to earn your trust for autonomy.
Offshore talent retention tip – Small town vibes
Since Covid as the world became more remote-first, you may have experimented with talent outside your natural city center, and found talented people that moved to rural communities. Armed with a great internet line, they can accomplish anything. I’ve been noticing the exact same phenomenon offshore. We have teammates in the Philippines, Bangladesh and India either move to “the provinces” into rural communities, or they are suggesting we recruit talent from these small communities.
- Tighter communities to create a referral network
- Less optionality for talent to leave, thus employee retention / loyalty is higher.
Today I had a call with Sander Biehn, CEO of Thought Horizon where we both shared that we have found incredible DevOps / Engineering talent in Rajasthan, India – north west India. We have had great experiences at both referral-based growth of the team, and high retention in comparison to metro-city hires.
Use this tactic as you are scouting for talent offshore. Look for small town vibes!
Don’t Forget – Benchmark your team against offshore talent.
- What is the profit increase you could expect?
- What is the sales relief / reprieve you could expect to generate the same profit?
Get ready to be shocked!