I recently had a call with two founders. Their business was crushing it. So much so, they had split it into two separate entities. And they decided to do something a bit different with the newer, second business. They outsourced 100% of the admin to an offshore team in India.
They told me the first 6 weeks were great.
Things ran smoothly, like clockwork.
They could focus on growing their business.
But that’s when the problems started happening. Errors started creeping in, and things got missed. 3 months in, the entire team of 7 had churned.
They had to keep going through the training process.
The same headaches as hiring someone directly. But without the long-term benefits of having a team on site.
That’s why we were chatting, could automation take over from this team of 7 remote workers?
The Promise vs The Reality of Offshore Teams
And I get it, I’ve outsourced work in the past.
Even coding, which is my background. Because the promise of things getting done tempts us.
The Promise
The first bonus is the cost.
I’m based in the UK, and I work with a lot of businesses based in Britain. But also chat to businesses in the US and Canada.
Being able to hire someone fast. That costs a fraction per hour of what it would cost to hire directly.
You’d be mad not to consider it.
Running a business means a hell of a lot of admin.
There’s so much “red tape” running a business in the UK, to take as much of the admin off your plate. It frees up previous time. Your time is meant to be spent on important work.
Founders need to focus on growth, strategy and putting systems in place.
Not forever updating systems.
The Reality
Going back to the 2 founders I mentioned. Outsourcing their admin gave them more problems than it actually solved.
At the start of the hiring process, they were spending up to 2-4 hours a day briefing the team on what they wanted them to do.
As well as having to review the work to make sure things were correct.
As I’ve mentioned, after 6 weeks of this, everything seemed to be running.
Admin was being handled. Business was going well.
Then errors started happening. The quality of the output started dropping.
Now, I’ve no idea why they happen, but I’ve heard about this happening many times.
Maybe the remote company has a high turnover of staff?
That’s what happened in this scenario. After 3 months, the initial team of 7 that the founder trained up moved on. They had to train another 7 people.
Not all at once, but over another 6 weeks.
Then there’s the time difference.
Now, they had an agreement that the team would work UK hours.
But this isn’t always the case. Working across time zones brings another set of headaches. There might be no one online to deal with an urgent issue.
Or it can take 8-12 hours to get a response for a simple question or query.
You know what. It’s not their fault. They are being smart about how they run their business. And outsourcing makes complete sense.
You don’t know what you don’t know.
The Real Problem That Nobody Talks About
Now I’m not saying there aren’t good remote teams out there.
But the problem might be that we are asking them to do things that we don’t like to do. Or that we wouldn’t expect direct employees to do, 8 hours a day, 5 days a week.
It’s not that the tasks aren’t important.
They’re just boring.
Data entry and CRM updates
Chasing documents and following up with clients or suppliers
Scheduling and diary management
Putting together weekly reports
Formatting templated communications, like email.
The problem is that most tasks given to remote teams are rules-based, repetitive, and entirely predictable.
That type of work was never meant to need a human.
It needs a system.
Every single one of those is something automation handles faster and cheaper. And without the management overhead.
The Hidden Costs of Hiring Remote Workers
OK, I’m going to give you some homework.
Wait, don’t close this.
It’ll be worth it.
As founders, we never factor in our time into the cost of outsourcing.
We look at what we don’t want to do. Or what we shouldn’t be doing at all because we have bigger fish to fry. We look at the monthly cost of hiring a remote team.
And the ROI is off the charts.
If you can get rid of say 80% of the business admin to a team, for say £3K a month. We have no recruitment costs or having to review job applications and do interviews.
You’re sold, and honestly, it’s a no-brainer.
But What Does It Cost You?
It isn’t about the direct cost of the team.
There’s your time to factor in, too.
Let’s say the first hour of your day, 8 AM – 9 AM, will get spent on calls with the remote team. Whether that’s updates, firefighting, or just giving someone a bollocking.
That’s 5 hours out of your week.
Doesn’t sound like a lot?
It’s 260 hours a year.
Now, let’s give ourselves an hourly rate. As a founder, your time is so valuable. But let’s set a conservative hourly rate of £150/hour (In practice, it’s more like £500/hour, at least.)
So, £150/hour, multiplied by 260, is £39,000 a year.
On top of the £36,000 a year you pay for the remote team.
The real cost of outsourcing is £75,000 a year.
And that’s if you only sacrifice 5 hours a week.
What if you have local team members getting involved, too?
If we face up to the reality of it. The figure is closer to £100,000 a year.
It’s not a cheaper alternative when you run the numbers.
Both time and money, gone!
It’s A Process Problem, Not A People Problem
So what is the answer?
Well.
What are the tasks your team is doing? Whether that’s a remote, outsourced team, or direct hires. Aren’t a people problem.
What if it’s a process problem?
And what if the process could be fixed once, and run itself from there?
This is where automation and the “dreaded” AI can take over.
If a task is rule-based, mundane, and repeatable, then it can be automated.
But there are also other benefits.
If something is low-effort but high-value, this can also be automated now. But AI can do a lot of the heavy lifting.
Key parts of your business run on autopilot.
The dream of having a business that just works is achievable.
Conclusion: Hidden Cost of Offshore Teams
I’m trying something new with The Automation Blueprint. I’m releasing it in a 4-part series every month.
Next week, part 2 goes into how these two founders started thinking about replacing the offshore team of 7 with AI-driven automation.
That’s how I ended up chatting with them.
Thanks for reading.
Oh, one more thing. If you want help figuring out what low-effort, high-value tasks you can automate. Or what mundane stuff to take off your plate. Check out this 30-minute video course: What To Automate First (Or Next) In Your Business.
