3 offshoring mistakes

Hi folks,

The world of hiring has totally transformed in the last 5 years.

Before 2020, offshoring was for big companies. These massive offshore compounds, with 500 or even 5,000 people in Guadalajara or Medellin.

Today, even tiny companies can have a global team. And they’re not second-class employees anymore, but full team members, who just happen to live somewhere else.

For me, it’s all about Latin America. (More on why below.) I’ve used Latin American talent in a ton of my businesses. 

And a few years ago, I cofounded a LatAm staffing business with an Argentinian (kind of meta, I know). 

So I’ve seen from the inside how people get it right, and how they get it wrong.

One of the biggest misconceptions is that it’s just about money. 

Yes, hiring overseas is less expensive. But at a ton of companies I’ve seen, the motivation wasn’t budget problems. It was 3 factors:

Put these all together. For a ton of small businesses I’ve seen, it wasn’t that they couldn’t afford an American. They just couldn’t find one. 

So you start seeing people filling those jobs — data scientists, accountants, even salespeople — globally.

If there’s one thing that determines success with any employee, it’s communication. 

But there are different levels of understanding. 

When you’re doing business with a Canadian or American, you can dance around sensitive issues and people get it. 

With employees for whom English isn’t a first language, you have to be much more direct, sometimes uncomfortably so. 

I once saw this in China, where an American owner was speaking in a way that sounded very stilted and awkward. He told me, “I have to speak in perfect high school English and be clear about exactly what I want, so it doesn’t get lost in translation.”

It’s good training. Clear communication is a great skill for any manager. Managers get what they want. Employees know what’s expected of them.

(Latin America feels like a special case here. Fortune 500 co’s have been offshoring there for decades, so there’s a whole stream of the education system designed to prepare people to work for American companies. When you find the right people, it’s a seamless culture fit.)

In the last year or so, we’re seeing an explosion of new companies promising offshore labor.

This is how most markets go:

Established providers build good systems and proof points. Then copycats pop up, try to run the playbook, and disappear three months later. 

But the winners are the more established providers, who have built trust and good systems. 

Because it's about value, not saving the most dollars. 

“Cheap” labor is really expensive. Time is valuable. 

And you’re always better off getting the right hire — who fits, sticks around, and does amazing work — than getting the cheap hire who flunks out or ghosts you. 

It’s why I’m really proud of what we’ve built at my company Near. We’ve been doing it for years now, and helped hundreds of US companies build Latin American teams. I’ve done it myself, multiple times.

But whether you work with us or someone else: make sure they’ve got a track record. 

—

Global hiring is still early. 

We've gone from early adopters during COVID to early mainstream folks now. But a lot of conservative industries haven't even started thinking about it yet.

If you’re interested in talking to the Near team, I’d love to connect you with my cofounder Franco. Just hit reply to this email.

(Alternatively: they’ve crunched a bunch of data and best practices for their free Offshore Hiring Guide.)

That's it for this week! What's been your experience with global hiring? Hit reply—I read every response.

Michael

P.S. If you’re ready to hire, Near will give you 5% off your first placement. Just tell them I sent you, or reply to this email and I’ll connect you with my cofounder.