Office Offshoring: Slicing Payroll by Hiring Overseas Employment

Bracha Greenberg needed to hire. Her insurance-consulting business was booming, and she’d placed ads for an administrative assistant and billing associates. But the salaries that even entry-level people now demanded made her business model unprofitable. Desperately, she was now considering her neighbor’s model: she had an assistant in Eretz Yisrael, an Indian website programmer, and a graphic designer in the Philippines. The cost was a fraction of that of US-based employees, and it supposedly worked beautifully.

Is global hiring the answer to local labor shortages?

Tapping the Global Talent Pool

Your best future employees might be living thousands of miles away. Technology advances have made remote work realistic, drastically opening up the potential hiring pool. Google hires software engineers in Silicon Valley, but also in Omaha and India. A hospital in Boston hires radiologists to review digital images from Idaho and Israel. But whereas large companies have been hiring globally for quite some time, managing a global workforce is now a realistic option for many small companies, too.

Big-Prize Potential

The potential prize for employers is huge. Labor costs have skyrocketed, and governments keep adding expensive compliance obligations on employers in developed countries. Contrast this landscape with foreign skills markets where average salaries are 50–80% lower and there are a lot fewer regulatory headaches. Employees in developing countries are thrilled to get steady work, incentivized to be super-attentive, and devoted. Less cost for more motivated workers—what’s not to like?

The Technology Factor

While call centers have been around for a long time, it’s only with cloud computing and Zoom that most forms of white collar work can be done remotely and seamlessly. Affordable project-collaboration software makes it easier than ever to team up and oversee complex projects without maintaining in-person oversight. Virtual phone numbers and video technology have allowed creative companies to move beyond physical presence in a surprising number of jobs.

The Covid Factor

Before the Covid pandemic, you would have done a double take if the live receptionist in your doctor’s office was replaced with a screen. But post-covid, it’s really no big deal. There are medical offices that are saving big money by using foreign staff to welcome patients, review their insurance documents, and direct them to the proper waiting room, all via video and the cloud. This is one example of many jobs that can be offshored at very low cost.

The Cost Factor

Word is spreading quickly that employers can get eager, smart, English-speaking employees across the world at a fraction of local salaries. While there are definitely hurdles to overcome, using foreign employees will inevitably become the norm in many US businesses. Even if someone prefers to have only in-person workforce, it will be increasingly difficult to operate when competitors can undercut the local-only holdouts price-wise thanks to a much lower payroll.

Language First

The most obvious question that comes up regarding global hiring is that of language barriers. But huge portions of the globe learn English in school as a second language. When learning another language offers an easy way to double or triple your income, you can bet that many millions of kids are doing their best to become bilingual. Many millions have passable English, and a portion have excellent literacy. There’s a huge group to choose from, so employers can make a solid command of English criteria number one.

What About Skills?

Some employers in developed countries may simplistically assume that low-income foreigners can’t add real value. But many poor countries have an abundance of bright, educated people. As in America, there’s a huge range of skill and capabilities, but foreigners can definitely be hired and trained to greet people walking into a doctor’s office or follow a recurring checklist to process bills for nursing homes. And with a bit of effort and trial and error, companies can even hire doctors, accountants, architects, and other skilled employees from overseas.

Dispersed Management Challenges

Another concern is how to get productivity out of workers who aren’t in the same office, forget about across the world. The first thing to note is that workers overseas will often agree to work on American time. There is also now software that can capture every keystroke and every website visited and even take screenshots at ongoing intervals. It might even be worthwhile to keep a screen share going the whole day if that’s what it takes to lower salaries by 50–80%.

What About Security?

The most important issue that must be addressed is security. Providing foreign employees access to private data, client information, and company networks seems foolhardy. Indeed, it’s unwise to share bank information or control-level access to websites, especially with a newer hire. But many jobs can be designed in a very low-risk manner. Categorizing bills, directing visitors, answering standard questions, and designing graphics are pretty low-risk, for example. There are also technical ways to limit these risks.

Huge Potential Justifies the Efforts

Ultimately, there are risks in everything, and many will find that they can contain the risk of global employees to a level that works for them. Others won’t. There are also plenty of other hurdles in finding the right employees, setting up the training and monitoring, and more. Indeed, hiring, training, and managing employees isn’t easy even face-to-face, and doing so across the globe adds a significant new level of challenge. But the massive benefit of accessing affordable, motivated workforce options can make it very worthwhile.

The Other Side of the Coin

This article has so far been written narrowly from the employer’s point of view. But what happens to employees if global hiring becomes widespread and job markets tighten? If most American workers are forced to compete with foreigners, things can get pretty ugly for them. And what does it mean for our community? Providing jobs within the community is mentshlich and Torah’dig (karov kodem). Hollowing local incomes would be very harmful to everyone and good jobs are necessary to keep a community, city and country strong. 

We’ll Have to See What Happens

But some companies may have their hands forced by market forces. I also believe that according to shuras hadin, the expectation for hiring precedence within the community does not apply when the alternative is vastly cheaper. Like it or not, this new trend may require everyone to learn how to manage their own global teams, which could increase, rather than decrease, their value.

Thanks to Joel Neuman of Hiring 4 Less, a global employer par excellence, for his input. 

Want to dig deeper?

Try these related articles

Building a Company Culture Remotely: Is it Possible?

The New World of Work: Preparing for the Realities of “Location Anywhere”

Working from Home: Making It Work

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