Is middle-management necessary in nearshoring?

Nearshoring is the outsourcing to a nearby or neighbouring country rather than a distant one. It has several advantages over transferring elements of a company to a further country, apart from the obvious proximity. Having an outsourced team closeby ensures ease of communication due to the similar working culture, and there are no significant time zone differences.

Most companies hire an outsourced team to get some work done that they do not have the skills or resources for. The workflow can depend on companies or the type of project, but usually, there is at least one manager in charge of the outsourced team. Thus, the efficiency of the nearshoring team does not only depend on them but also the hiring company.

Nearshoring teams are already used to working under different administrations and might not have problems getting used to various workflows, but having an outsourced team can be challenging for a company for the first time, and many questions might arise regarding the working process. In most cases, there is a so-called middle-manager overlooking the process, who keeps in touch with the outsourced team and reports to a senior staff member about the progress. The question is, are these middle managers necessary? As their primary function is to keep the two parties connected, we could also toy with the idea of discarding middleman to increase ease of communication and eliminate unnecessary bureaucracy.

When is middle-management unnecessary?

The feel of the need for middle-management can derive from a lack of trust and need to check on progress constantly. However, if a company does not trust their outsourced team, it will only slow down the process and create discomfort. In certain cases, it can be better to trust that the team knows what they are doing and let them report directly to the person responsible for them. Startups many times use nearshoring services due to lack of skills within the company. In this case, it might be wiser to let the team do their job, as they are the ones with more experience. Small companies might also not have the resources for several managers to coordinate the same project.

When is middle-management beneficial?

It’s undeniable that middle-managers need a broad set of skills including coordination, communication and supervision between virtual and real teams and possibly different languages. It is not an easy task to juggle, and the more complex the project is, the more work it involves from the manager’s side. If the task is only one part of a large-scale project, it might be advantageous to have a middleman coordinating all this.

Solutions

To make communication smoother, the nearshoring team should also have one responsible person for each project. At Interventure, we call them Local Team Leads, and their main responsibility is to guide the team through an established IT knowledge and good management skills. The Local Team Lead is in touch with the hiring company and ensures the high quality of the performance. For the best possible result, the Local Team Lead should have an adequate amount of freedom to make decisions in case of unexpected events.

Ultimately the management style depends on the company. Smaller companies or startups could consider using just one level of internal management to increase transparency and reduce additional workloads. On the other hand, big companies with large-scale projects could benefit from a middle-manager to keep an eye on the progress of the project without bothering senior member.

Companies should make sure to have a clear strategy before starting to work with their outsourced team to have the best possible outcome. Before applying a strategy, they should consider their objectives and what could be the most efficient way for them to get there. Various factors, such as time-management, company hierarchy and trust should be considered to mention a few. Once these issues are settled, and both parties have a clear idea of the workflow, the cooperation is bound to run smoothly.