Culture and Offshoring: Beyond the Transactional 

Recent statistics indicate that an overwhelming 41.6% of American accounting firms (, November 1, 2021) are offshoring talent to some extent. Although the practice of offshoring, or onshoring, has been around for decades at this point, it has ramped up considerably and shows no sign of slowing down in light of the chronic squeeze on talent available to the accounting industry in the U.S. and other countries (Why No One is Going into Accounting, Lindsay Ellis and Paul Overberg, Wall Street Journal, October 6, 2023).  Most firms have historically taken advantage of offshored talent to perform lower-level functions at a lower cost. This often meant that the relationship between onshore employees and offshore talent was very transactional: I send you work, you do the work, I review the work, and you revise the work.  

This was also facilitated by the fact that often, the firm could issue work to be done in its off hours and review it the next day when utilizing talent from countries like India or the Philippines. But offshoring has evolved quite a bit since its inception and with that evolution is an increase in expectations on both sides of the relationship; firms know, after much trial and error, that offshored talent is capable of much more than lower-level tasks and offshored talent wants to be a real part of the firm’s vision and mission, they want to know their future with the firm has promise. Firms are pickier about what offshore talent is hired and employees overseas have a lot more options for employment. And there are more places to find top talent across the globe including South Africa, Mexico, the Philippines, Columbia, India, and more are jumping into the pool every day. 

All of these changes are requiring firms to rethink their offshoring strategies in light of their culture strategies.  Alignment between what the firm is doing for onshore employees and what it intends for offshore ones is becoming the norm. With that, there are some best practices to consider to make sure it goes as well as intended. 

  1. Become a lot more culturally intelligent. What do you currently assume about the culture in which offshored employees reside? Have you and your team had lots of exposure to people from that culture? Cultural intelligence refers to our ability to work effectively in culturally diverse situations. It means we understand cultural cues in a culture we didn’t grow up in. When you approach people with a greater understanding of their culture, you are already going well beyond the transactional.  The cultural exchange must go both ways too. Make no assumptions that your offshored employees understand the firm’s culture. Managing expectations on both sides as to what is the way of doing things, what are the standards, and how each person fits into those standards is paramount to success.  Assume nothing at the outset. Discover instead.
  1. Develop a robust onboarding strategy for offshored employees. When you’ve just started offshoring, spend some real, live time with your offshored employees. Invite them to your firm for orientation and let them meet the team. Send key employees from the firm to the offshoring country to train and develop relationships too. The cost of travel is infinitesimal in comparison to the costs saved and the culture building that can take place in the time spent physically together. The goal should be to make the offshored employees feel and function as your other employees do – part of an important team with paths for them to succeed. Much of good onboarding is culture-related: who is in charge, how do I fit in, where do I take ownership, how do I learn or seek support? When you commit to leading people and not just managing work in this instance, you will accomplish an elevation in the firm’s ability to grow beyond the simple offshoring of tasks.  
  1. Leadership on both sides. Designate clear lines of leadership and accountability on both sides of the firm’s relationships. But also know that it is important that there are many touch points for your offshored employees to interact with the firm’s local team and even the clients they serve. You have the opportunity to do two really important things here: Elevate the skill sets of local employees for leading other people and developing the ability to do that in a culturally intelligent and thoughtful manner, and also, elevate the skill sets of offshored employees to ultimately lead their own teams and complex client relationships.  
    • Please note that the challenges of hybrid working are different than those of offshoring to a hub in another country, although there is admittedly some overlap. In both, technology, processes, and communication are paramount to success. But in hybrid work, the employee is spending time away from a cultural firm hub, i.e., home. In an offshoring scenario, the firm has a cultural hub in another country.  
    • It is important to note that there are many options for offshoring talent, from very specific and compartmentalized tasks like payroll processing to full-service accounting services typically provided by the U.S. firm. Leaders should be thoughtful with regard to what level of culture building and belonging is required given the scenario. 

Related Article: 5 Questions Every Managing Partner Is Asking About Outsourcing

  1. Develop consistent performance measures across borders.  Have the same high expectations for both performance and growth that you have for your local employees! That may sound both simplistic and crazy, but this is an important point. The more consistent you can be with your expectations of performance at every step of a person’s career, regardless of where they come from and where they currently sit, the better the results. The same rules apply, and the same outcomes occur.  Always align what you want all of your people to do with what they want for themselves.  The best performance measures and management occur where you establish the following: 
    • Technical requirements and skill sets 
    • Human skills requirements  
    • Expectations for advancement 
    • Realization/Utilization requirements 
  2. Leave room for change.  Some of the best innovations in the way firms operate and serve clients have come from their experiences with offshored teams. If you can keep yourself both open and engaged with those teams to understand their challenges, their aspirations, and their experiences about working with your firm, you can gain insights you’d probably never get from your local employees in the same way. The bottom line here is that you have the luxury of having an outside view coming inside. Offshored employees can both feel an important part of the firm’s work and future, AND ALSO, bring insights into everything your firm does in a way that someone local might not see right away. Keep the door (and your minds) open for that to happen. When you give offshored employees the same access to your firm, its people, and its clients, you will be more likely to reap the benefits of their unique role in your growth as a team.  

There is no silver bullet to achieving success with offshoring, just like developing a local firm culture strategy. It takes effort, commitment, and intentionality to make it a success. We see lots of firms fail or struggle to find the light at the end of the tunnel. But when they do, we see it working no differently than if the firm was entirely stateside. Assume that this is a 3-year investment and stay up to date with what is happening globally to remain competitive and set goals.