In recent times Australian companies have seen major benefits in outsourcing operations to countries such as the Philippines and India where there is a plentiful resource of low-cost skilled labour.

Without a doubt, ‘offshoring’ offers Australian companies considerable cost benefit. In fact, according to global outsourcing group Arno Franz, companies can expect to save up to 40%. But there’s a need to be cautious. What often goes unsaid in the wake of such positive cost benefits is the significant initial investment that needs to be made – a further cost in terms of time, resources and money.

Furthermore, what’s almost never mentioned are the cultural differences that Australian stakeholders will encounter when working with their Indian and Filipino counterparts and how, if not managed appropriately, these miscommunications, misunderstandings and a general lack of Asian cultural awareness can adversely affect operations …. And the bottom line.

It’s not realistic, especially in the beginning, to approach a business relationship with someone from another culture in the same way as you would approach the same relationship here in Australia and expect the same results. Yet, all too often people continue with the same communication patterns, and the same approach and then wonder why they are not understood. Often, to make matters worse, due to time differences, people communicate with email, which frequently adds to the confusion rather than solving it.

Studies have shown that large amounts of information can be missed when we rely on words alone and that our tone of voice and body language can significantly add to a message (From The Horse’s Mouth 2009). In dealing with people from different cultures there will be language impediments no matter how fluent you might be in each other’s native tongue.

It’s a golden rule in doing business across international borders that if you cannot physically meet with someone, then picking up the phone will be your next best option. Don’t send email and hope for the best. This is where the frustrations start and the stress begins to fester, which leads to demotivation, reduced engagement and lack of productivity. Inevitably, projects go completely off the rails: resulting in an unhappy team, and unhappy customers, both of which can seriously impact profitability.

Any company wishing to fully benefit from the cost advantages of offshoring cannot afford to ignore the culture differences they will encounter from working with Indian or Filipino nationals. Acknowledging and addressing cultural nuances up front can avoid costly mistakes. This means ensuring Australian staff have Asian cultural awareness, are able to embrace differences, and be flexible about the way things get done.