Hybrid Outsourcing: The Ultimate Guide
17 Jul 2023 By: Michael Kansky
Outsourcing is a big decision for many businesses. More than half of all companies outsource to some degree. Yes, it’s a more cost-effective way to manage certain parts of a business, but many business owners worry about the loss of control and the quality of the work being done by offshore teams offering global business services.
Hybrid outsourcing is a way to mitigate those issues. By using a blend of in-house and outsourced teams, businesses can maintain more control and ensure quality while still benefiting from cost savings and greater flexibility. In this article, we’ll talk all about hybrid outsourcing and how to successfully implement it in your business.
Understanding Hybrid Outsourcing
With up to 68 percent of medium businesses struggling to find top talent, some businesses are looking at other companies and labor markets to find expert help. If you’ve got a large, multifaceted project, hybrid outsourcing may be the best option to offload some of the work from your in-house team without the cost of hiring new full-time employees. Hybrid outsourcing provides businesses with more flexibility than offshore, nearshore, or onshore outsourcing.
Hybrid outsourcing allows a business to outsource some of its work to team members in other countries or companies where labor costs are more affordable. This can be done without losing control of a project or division because in-house team members are part of the team and are guiding the work that the outsourced individuals and teams are working on.
Traditional outsourcing comes with potential drawbacks, such as language issues, quality control, and customer satisfaction. Traditional outsourcing can work well for customer service centers and companies that require a huge workforce of customer service representatives. But when it comes to more technical or complicated work, outsourcing can fall flat.
The hybrid model was created to leverage the strengths of both in-house and outsourced labor. If done correctly, hybrid outsourcing can be a sustainable, lower-cost way to scale a business without compromising the quality of an entire project or service department.
Advantages of Hybrid Outsourcing
Depending on your business and its needs, hybrid outsourcing could be the perfect solution to your problems. Here are a few of the advantages that hybrid outsourcing can bring:
Operational Control and Oversight
One of the biggest advantages of a hybrid outsourcing model is that the in-house team is able to work closely with the offshore team members. This means daily or weekly check-ins, frequent reviews of the work being completed, and the agility to change directions when needed.
One form hybrid outsourcing can take is called staff augmentation. This is when a member of another company joins your business temporarily for all or part of the duration of the outsourcing partnership. These quasi-staff members follow the directions of the in-house team and act as a second pair of hands to accomplish whatever work is being done.
In both cases, no one needs to guess what work is being completed. The in-house team or business executives have greater visibility into the work being done. This greatly reduces the risks associated with complete outsourcing.
Scalability and Flexibility
Because skilled employees can be hard to find, having a source of workers via outsourcing partners or contractors means that your business can grow and scale more efficiently. Take advantage of a large talent pool in other locations—don’t let human resources slow down your growth.
If a project demands certain specialized skills or experience, being open to outsourcing opens up the pool of talent you can search through as you fill that need. Having access to talent and communicating with them frequently means you can make quick adjustments to meet changing business demands.
Without reducing humans to numbers, one worker’s salary in country A may be enough to hire two workers in country B. When done carefully, hybrid outsourcing can give you the manpower you need to expand your business or deliver on schedule while you save on overhead expenses and resource allocation.
Implementing a Successful Hybrid Outsourcing Strategy
Hybrid outsourcing can be a bit more complicated than other forms of outsourcing. More complex and long-term projects are usually handled with hybrid outsourcing, making planning and implementation more important. Here are a few best practices you should consider when implementing a hybrid outsourcing strategy:
Identifying the Right Balance
Most people start considering hybrid outsourcing after already identifying a business need. Make sure that outsourcing in that particular area of your business won’t negatively affect your core competencies. You’ll need to decide which functions can be managed by external resources and which need to be handled in-house.
Once you’ve decided on which business functions you’ll outsource, define clear roles and responsibilities. Don’t leave room for any confusion: Tasks can fall through the cracks if both parts of the team think the other is responsible for them.
Choosing the Right Outsourcing Partner
As with any important decision, conduct thorough research on the team or individual you’re considering working with. Evaluate their expertise and track record. Look at their previous work and, if possible, talk to clients they’ve worked with.
While someone’s individual culture, cultural boundaries, and values will differ, make sure that their business values, business culture, and communication practices align with those of your business. Working together can be difficult if those values are misaligned. If you have confidence in your partnership, you’ll feel confident in splitting responsibilities.
Seamless Integration and Collaboration
Once you’ve chosen an individual or team to work with, facilitate knowledge transfer and training. No matter how skilled someone is, they’ll need time to adjust to how your business does project management. Make sure you have someone who will be able to train them and answer questions as they get up to speed.
Establish effective communication channels where team members can freely ask questions about a specific project, ask for help, and share new directives. Consider options such as Slack, Google Chat, and other chat-style communication methods. Email is the old standby, but it isn’t effective when it comes to constant communication.
Encourage collaboration between the in-house and outsourced teams. This might be in the form of a daily or weekly meeting, video chats, or other forms of collaboration. Make sure your project managers are great communicators who know the project requirements.
Challenges of Hybrid Outsourcing and steps to overcome them
Hybrid outsourcing comes with many benefits, but it still comes with the challenges familiar to all businesses that outsource some of their work. Be aware of the following challenges, and be sure you have a way to overcome them.
Communication and Cultural Differences
Developing communication and collaboration between in-house and outsourced teams can be extremely difficult. If you add in language barriers and a time difference, it can seem impossible to communicate and collaborate effectively. There’s no easy way to overcome these challenges. Every business needs to find a unique solution that works for everyone involved.
Cultural differences can also cause friction in the communication process. Social norms are different in every country. The way someone talks may be perfectly normal to them, but it may come off as rude to others. These cultural and language differences can make it difficult to establish shared goals and expectations.
Maintaining Data Security and Confidentiality
Allowing outsourced teams to access secure data can cause security concerns. You may be required to implement robust data protection measures before access can be granted. There are also different privacy regulations in different countries that have to be taken into account. The outsourced team may need to adopt specific data-handling protocols, depending on the situation.
Successful Implementations of Hybrid Outsourcing
There are tons of successful examples of the hybrid method of outsourcing. Here are a few notable ones from companies you’ve probably heard of before:
Alibaba Outsourced Its Web Design and Development
The Asian e-commerce giant struggled to find the right resources and specialists in the 1990s when the company first started. The founder of Alibaba, Jack Ma, outsourced multiple projects, including web design and web development. He was able to find the specialists and offshore resources he needed in the US and integrate their work into the work being done in-house. The website visits and the company in general began growing at a meteoric pace. In 2014, it became the largest IPO in history.
CuriosityStream: Integrating Onsite and Offshore Teams
CuriosityStream is a company that provides video-on-demand streaming services. Curiositystream made the decision to try outsourcing after noticing the growth of its competitors thanks to outsourcing. CuriosityStream hired programmers to create new features for its streaming service. This led to an increase in the number of hours watched through its service as well as a reduction in operating costs. CuriosityStream’s CTO, Andre Silva, saw the benefits of outsourcing and recommends integrating offshore teams with in-house teams for maximum benefit (Unity-Connect).
Hybrid Outsourcing FAQ
Hybrid outsourcing might be the perfect solution to a problem your business is facing. Hybrid outsourcing can give you greater operational control and insight, increase your scalability and flexibility, and keep costs down. But don’t overlook the challenges. When implemented correctly, Hybrid outsourcing can take your business to the next level, as it has with many other businesses.
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