Determining the REAL Cost of Hiring Overseas Employees

As your business grows, you’ll likely start to explore different methods of building a team. One strategy that gets a lot of attention is hiring overseas employees, contractors, or agencies. While it is an extremely cheap way to get help, it’s not always as simple as people make it out to be. Before you dive into hiring overseas, it’s important to be prepared and understand the potential pitfalls that may pop up.

I’ve worked with several agencies in the Philippines for about two years and have helped clients use overseas methods as well. So, let’s dive into what’s worked and what hasn’t!

Hiring Overseas Employees IS Cheap

This is perhaps the number one reason people often go the route of hiring overseas — because it’s cheaper than U.S. workers. Generally, you can hire overseas employees, contractors, or agencies at a fraction of the cost of U.S.-based options. For instance, an overseas VA agency can cost $10-15/hr, whereas a U.S.-based one is going to be $30/hr or more.

The savings mean you can get more bang for your buck per hour, and it is very attractive when you’re looking to grow your team. However, many people do not factor in the differences in working styles that can eat up a lot of those savings.

Depending on whether you get a dedicated person or not, overseas agencies can rely on a revolving door of people who never get the experience needed in your business to be truly effective.

In general, you can expect a lot more management and training time involved with working with overseas support. In several of my clients’ businesses, we discovered hiring overseas employees generally resulted in 2-3x the effort and time to onboard, train, and manage. Depending on the hourly rate on both sides, this may not actually save you any money when all is said and done.

Consider the Cultural Differences

Another important consideration is how cultural differences may impact fit and interaction. In some cases, these cultural differences can cause huge problems in workflow and effectiveness that can eat into any cost savings.

For instance, in many Eastern cultures, saving face is incredibly important. As such, hiring overseas employees can be challenging because asking for help or saying there’s a knowledge gap is not as acceptable in those cultures. I’ve seen many instances where this leads to disappearing team members because they would rather ghost than admit they don’t know how to do something.

Similarly, it’s very common for overseas workers to say yes to everything because even though the wages are low for the U.S., they are very competitive in the local market.

This leads to becoming easily overloaded and missed deadlines when they can’t get everything done on time.

How Can You Succeed by Hiring Overseas Employees?

While there are pitfalls you need to be aware of when hiring overseas employees, it is definitely possible to be successful with the right foundation and working relationship.

Start by making sure you have the time and energy to properly onboard and train. In general, assume it will take 1.5-2x longer to get an overseas hire up to speed. As long as you plan accordingly, this is not a huge issue.

Similarly, even on an ongoing basis, be prepared to manage more than you’d expect when you are hiring overseas employees. When you are paying such low hourly rates, you need to expect other costs in relation to your time and input in getting the work done.

Build-in quality controls to ensure there are no issues with deliverables. This isn’t something you should only do with overseas teams, but when you add language barriers to the mix, it’s important to allow extra time for the back and forth and updates on any task before it’s due to the client.

Some Tips on Hiring Overseas Employees via an Agency

I’ve worked with a handful of overseas agencies and had both good and bad experiences. The first two agencies were a disaster, while the third has been amazing for quite some time.

Here are a few things to consider:

1. What type of support are you getting?
Be sure to look at whether it’s a dedicated person or a bunch of different people. Many agencies don’t assign a dedicated person for lower levels of support, and that can lead to a lot of lost time and require you to often retrain on the same things.

2. Who is responsible for the training?
With some agencies, there’s built-in supervision and training from the agency around new tasks. This can have varying degrees of success, but it’s definitely good to consider.

3. What are the standard workflows like?
Here, consider how your team member works on a day-to-day basis. What reporting is built-in? How do they communicate? How do they let you know when they need more to do?

4. Do you have guaranteed work hours each day, or do they vary?

5. What happens when your dedicated person (if you have one) is out? Is there any backup coverage provided?

6. How do overseas holidays impact your support? How much notice is given around these?

7. What happens if you don’t have enough to fill your contracted hours?

At the end of the day, hiring overseas employees, contractors, or agencies can be a huge success, but you must be prepared to do your part to make it so. You generally aren’t going to be able to hire someone today and get results tomorrow. It will take time and effort — as with any hire — before your team member is effective.

If you’re considering hiring overseas employees, you need to know what does and doesn’t work. Here’s the real cost of hiring overseas.

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