The contemporary business environment has witnessed a drastic shift in the way we work. And even though remote work is not a novel concept, there was a massive transition from on-site to remote working during the pandemic. However, even as the dust has significantly settled and the social distancing measures relaxed, the tendency among the employees to work from home (WFH) continues to persist. Meanwhile, as inflation surges, companies have step up efforts for cost optimization, and hence, outsourcing and staff augmentation continue to grow as instruments for cost optimization, leading to the formation of transnational, globalized teams that are leaner and more fluid in their structure and essence. But, with all its benefits, remote teams based on outsourcing or staff augmentation philosophies inherently suffer from a few downsides, one of which is the growth of silos in the remote workspace over the course of time – something the management must dismantle in order to ensure continued cross-functional growth and efficiency.
What is outsourcing and co-sourcing/staff augmentation?
Outsourcing refers to subletting an organizational function in part or entirety to a third-party vendor that specializes in the field of relevant expertise.
Similarly, co-sourcing or staff augmentation refers to the recruitment of human resources – professionals or subject matter experts – to reinforce departmental capacity in terms of workforce or expertise.
Growing preference for remote work
Even though the remote work culture was prevalent and popular in the United States compared to rest of the world even before the pandemic, majority of the workforce was still used to the on-site work routine.
This, as stated earlier, changed drastically as the US Government enforced stringent social distancing measures amid the pandemic.
However, even though the World Health Organization has not declared the pandemic as over and newer variants of the novel coronavirus continue to emerge, a majority of the workforce is unwilling to return to the pre-pandemic work routine which was defined by daily commuting to and from the physical workplace.
According to research published by Kim Parker, Juliana Menasce Horowitz and Rachel Minkin from the PEW Research Center titled, “How the Coronavirus Outbreak Has – and Hasn’t – Changed the Way Americans Work,” 20 percent worked from home before the pandemic, 71 percent worked from home during the pandemic, while 54 percent want to WFH even after the COVID-linked social distancing restrictions are lifted.
Possible reasons behind remote work preference
While the exact social, economic and psychological reasons behind the employees’ unwillingness to return to the pre-pandemic routines may be too complex and exhaustive to be established and stated here, some research-based findings suggest:
- A rising cost of urban lifestyle is a deterrent and employees are trying to evade the high cost of living by relocating to suburban areas where they will have the flexibility to WFH.
- The price of gas is on the rise. Employees are preferring WFH to save the money spent on commuting.
- Some employees prefer WFH to avoid negative workplace energy.
- WFH has busted myths about the practicality of a remote team achieving the same level of work proficiency and efficiency as an on-site team.
- Some employees are staunch believers of the environmental benefits of WFH. They believe WFH to be eco-friendlier.
- Many believe WFH has benefitted them in maintaining work-life balance.
- WFH is believed to be ideal by many parents.
Flexibility as the new employee benefit
The prevailing labor market trends strongly suggest changing attitudes toward employment. The Great Resignation of 2021 crunched the entire labor market, making one thing certain: flexibility is the new workplace norm.
PEW Research Center survey by Kim Parker and Juliana Menasce Horowitz found that nearly half the staffers who quit jobs during the mass resignation in 2021, a major driver to which was the Great Resignation as well, were unsatisfied due to a lack of flexibility.
The research conducted by Envoy in collaboration with Wakefield Research, in which 1,000 participants were surveyed, reinforces this finding because according to its findings, flexibility is the new employee benefit.
This clearly shows that in the crunched labour market in the US, you will have to grant employee the flexibility of workplace and timing, among other benefits, if you are to successfully hire and retain quality human resources.
Remote work as a driver of global outsourcing
A rise in remote work culture and a persisting reluctance of existing and potential employees to return to offices have led to a growth in global outsourcing.
Remote work has made it possible for companies in developed economies, such as that of the United States, to access talent from across the world, including that in the developing economies, such as those in the South Asia, Southeast Asia and Far East.
With remote work, the export of human resource – manhours and expertise – is possible without the worker physically travelling to the host destination. So, if an SME in Connecticut, US, is looking to hire a finance expert, it has the option of recruiting someone either from the domestic market or from Karachi, Delhi, Jakarta or Manila, for instance – either directly or through an outsourcing agency.
This additionally implies that although, historically, outsourcers in the developing economies were primarily used for cost-cutting, they can now be leveraged for value addition as well.
A classical example is Expertise Accelerated (EA) CEO Haroon Jafree (CPA) training professional accountants from South Asia in trade promotions management – a highly-specialized niche of the US CPG industry for which there is a dearth of trained, affordable human resource within the US market. It is, hence, possible now for the US CPG companies to leverage EA’s outsourcing and staff augmentation solutions to recruit trade promotions specialists from this offshore talent pool. And, similarly, EA is providing professional resources for other specialized finance and operational services.
Downsides of remote working and outsourcing?
While remote working and outsourcing have come with immense benefits, they have a major downside: workplace silos. Since operations in a remote setting are not taking place on a centralized, physical location, the lack of face-to-face interaction among the co-workers paves way for the growth of workplace silos – business divisions operating independently and avoiding sharing of information. This brings about an obvious adversity – absence of one-team culture within the organization.
Outsourcing fusing into remote working
As a matter of opinion, I believe that although outsourcing is fusing well with remote working in the emerging new normal, cultural differences will have a compounding effect in the buildup of workplace silos.
However, I have personally leveraged remote working and outsourcing to achieve cost advantages for my client companies here in the US, I, therefore, suggest the US businesses not to get deterred by this, but, instead, to ensure that workplace silos are dismantled.
Bulldozing the silos
In addition to challenging the development of one-team culture, silos hamper the growth of interactive, value-adding teams and lead to sub-optimized development and utilization of human resources in an organization. It is, therefore, important to dissolve workplace silos.
A unified vision, collaboration, socialization and perception-management are some of the strategies the management can employ to dilute organizational silos in remote teams.
In her research publication titled “How to encourage collaboration and break down silos in remote teams?” featuring in the Strategic HR Review, Sarah Edwards suggests that the HR and business leaders need to ensure cross-functional communication and sharing of information in order to dilute organizational silos.
Knowledge management to counter silo growth
Edward’s findings coincide with the findings of Emin Civi – research Associate at Celal Bayar University in Manisa, Turkey, and Michigan State University in East Lansing, Michigan, US – who maintains in his study titled “Knowledge management as a competitive asset: a review” that knowledge management has evolved to become crucially important for corporate sector entities, because of which companies are investing heavily in the development of intellectual assets today.
The fusion of remote working with outsourcing also calls for knowledge management, one way of which is cross-functional information sharing, so that remote teams embedded with outsourced resources can evade the growth of workplace silos.
Knowledge management framework
Although presented in 1999, the Knowledge Management Process Framework by Bukowitz and Williams is relevant and applicable more than ever before as remote teams with outsourced resources direly need the development of knowledge-based assets proposed in it: knowledge repositories, relationships, information technology, communication infrastructure, environmental responsiveness, organizational intelligence, etc.
A word about Haroon Jafree
Haroon Jafree is a Connecticut-based Certified Public Accountant who is an expert at optimizing cost through outsourcing and staff augmentation solutions. Additionally, he specializes in CPG and retail industry-related trade promotions management and has served years at C-suite levels in notable US companies, delivering phenomenal cost savings through process redesign and reengineering. He is the CEO of Expertise Accelerated.