Cost, labor pool, unemployment rates, language skills, cultural affinity with the target market, local government support and incentives – all well-known deciding factors for companies seeking to locate new outsourced or shared services centers to offshore/nearshore locations.
But are companies really taking the necessary time to explore how their points of differentiation are perceived by the local population? Beyond providing a basic salary, what contribution can businesses make to the lives of the people who will be employed?
Cultural considerations such as these should be an important component of the due diligence process, for they are crucial to the long-term sustainability of the business. Unfortunately, even with their long-term influence on the success of an offshore business, they are too often overlooked, so here’s some advice for making sure they become part of your site selection process.
Act Corporate, Think Local
The most effective way to select a successful and sustainable market, community, and location to facilitate an operation is to spend time on the ground with local community leaders and prospective employees, using the language skill with which you expect services to be delivered. In a sense, this is a grassroots and touristic approach to the region, building on a foundation of previously completed market analysis, research, and the corporation’s strategic vision.
Before investing in a destination, many basic requirements on the ground should be fully identified. These are easily gained through market analysis, research, and by speaking directly with economic and government groups within the country/region of choice.
When identifying the company requirements, consider the following factors as a starting point:
- Local government investment and support
- Technology and infrastructure
- Education Safety and security Tourism
- Like industry success
- Labor pool
- Education level and graduation rates
- Language skill – English bilingualism skills learned (preferred)
- Customer service orientation
- Affinity to Western culture
- Employable population–demographics
Approach to On-The-Ground Research
Once these requirements have been fulfilled, spend time on the ground in the community to truly test the likelihood of success. Ask questions, document observations, and understand the community from which you will hire and where you will be a corporate citizen.
Understand how education works in the destination. Is it public or private? Is it mandatory? What is the local government’s degree of engagement in the education system? How do people get to school? Is there an emphasis on learning English/other language? It’s a good idea to assess the rates of school attendance. Visit a school, university or community college and build relationships with them.
You also need to determine who are the economic and community development supporters and funders in the community. When do they meet? Who are the members? Do they live in the community in which they serve? Attend a meeting of these community development supporters. Take notes and make observations about interactions and behaviors such as tone and pitch in conversation; gender based interactions; non-verbal communication such as eye contact and handshaking. These observations will help you adapt your body language and mannerisms to put people at ease when interacting with the local population.
To help manage your new workforce, attempt to discover the cultural customs of the local community, including holidays, events, and religious ceremonies. Understand the demographics of the region. What is the average employable age and are they male or female? What is the current make-up of the population interested in the BPO industry? Are they well-educated males or single mothers? Are they second income earners or primary breadwinners?
From a touristic perspective, you should investigate local restaurants, shopping facilities and tourist hot spots. Eat at local favorite restaurants, attend a local customary event, read the tourist brochures, and spend time in the recommended areas. This will tell you what the local people are proud of within their country. Knowing exactly what gives a person pride can also act as a motivational tool. This can allow you to better identify with the needs of the people that the corporation will employ. It will allow the opportunity to learn, understand and place value on what is important to the team.
Learn how local services are facilitated and distributed. Are these services valued and utilized? How does the role of the family contribute? Research health care, child care, transportation, etc. This will help provide a more comprehensive view of total costs. It will also help you “design the differentiators” that I referred to earlier to strengthen your value proposition as a “glocal” employer, and can help you in “positioning” your corporate philosophy to your future employees.
Integrate Cultural Components with Business Goals
By integrating the “softer” cultural components of the destination you are reviewing with that of your strategic business objectives and long term priorities, your company will become far more informed and accurate.
You need to be able to answer questions like: is a local staffing agency required to help launch the business? Does it make sense to place the business in the duty free zone or is an urban, centralized location more feasible? What type of community participation and recruiting event will need to be held? What aspects of the corporation should be advertised? What are the value added benefits for employees that will matter most? What are your differentiators as they relate to the community?
On the surface these concepts are relatively simple, logical, and (one would assume) already being facilitated; however, this is not the case in many situations. Cross-cultural communication and a grassroots approach are not often practiced for a wide variety of reasons. These include the assumption that knowing the statistical facts about unemployment rates and government incentives is enough to be successful. Other reasons include: aggressive timelines and low “price points” driving quick transitions, the lack of regional expertise within the organization, or simply an attitude that cultural considerations are an “after thought”.
To truly minimize new geo risk, not only should the selection team conduct the formal process, but drive the due diligence from a grassroots perspective and through a cultural prism. Once this knowledge and, more importantly, experiences are gained, the transition or execution team should act as the “cultural interpreter” for the enterprise. This is crucial to see a new operation through to success.