Offshoring can be a solution to Australia’s skills crisis — but only if done well

For a long time offshoring was spoken about in hushed tones, but in 2022 with a skills shortage that’s the worst I’ve ever seen, I believe it’s time we finally came clean.

We’ve had skills shortages every 10 years for the last couple of decades, but this time round we’re feeling a shortage of people as well as skills.

And that’s exactly where offshoring can help, it provides people to fill the gaps.

Right now, we’re in the midst of a perfect skills shortage storm: we have an ageing population, our immigration is at almost a standstill, and people changing careers and industries during the pandemic have all exacerbated the pain.

We also have a dire supply chain issue — our supply of technically skilled people is up the proverbial creek.

And that’s exactly why offshoring should no longer be seen as a dirty word — it’s one answer to the supply issues we’re facing. 

To be clear, it’s not the only answer and needs to be considered as part of an overall resourcing strategy, but it shouldn’t be discounted when you’re trying to find solutions to your people gaps.

So why offshoring? In Australia, more than 30,000 businesses have offshored work to different countries. The industry is worth $35 billion and growing at 3.3% which shows there’s a huge appetite for it in what has traditionally been a finance, telecoms, banking and other service industry space. 

There are no statistics on how many of those experiences have been examples of sh*tshoring, but with a cycle of three to five years before the work is onshored or in-sourced, you can guarantee that a large proportion of the time it’s because of a poor experience.

Understanding the impacts on your customers and employees is obviously critical before you decide to move any work offshore or to an outsourced provider. Transitioning work to a different person or company needs to be well thought out and well managed.

If your first thought is “this can be done anywhere, by anyone” then you might as well set fire to your cash now.

Underestimating the capability and experience of your current team is a sign of corporate arrogance that is a surefire way to ensure a sh*tshoring scenario.

The current Qantas baggage handling situation is one such example. The impact on customers, because the experience and capability of the team were completely underestimated, means that the ripples of those impacts will be felt for some time to come. 

This is not a new space for Qantas. They offshored their maintenance division a few years ago to Malaysia, but you can absolutely guarantee that their risk management conversations were far more detailed, took longer and were definitely more considered than the decision to outsource the baggage handling work.

This is a perfect example of corporate arrogance and limited exposure of senior leaders to coal-face roles. This is also a side-effect of encouraging people towards university degrees rather than the promotion pathways of the past where leaders came from those very coalface roles so they had a really clear understanding of the requirements of the work when they were making their decision on how and where it would be undertaken.

The reputational damage is difficult to quantify but will be felt on the balance sheet for a number of years to come.

Remember — your employer brand is wedded to your consumer brand. Impact one and you will impact the other. 

Offshoring is one solution to the current skills crisis — but only if it’s done well. 

In 2022 we work in a global world where distributed teams are connected by technology and leadership. Smart businesses will use this to their advantage.

Jude Mahony is global resourcing strategist and director at Optimal Resourcing. Her new book Offshoring or Shitshoring is out now.