You’ve heard of Offshoring, but it’s unlikely that you’ve ever heard of SoftShoring. That’s okay, because I just made that term up. However, if you are responsible for your organization’s strategy or improving efficiency, you should be familiar with the two concepts that SoftShoring describes. They both have tangible, significant impacts for your bottom line, and clear execution paths for implementation. I will cover the first one today, and the second in a subsequent post.
Mobile Work Locations
The first concept is that of mobile or remote work locations for employees – primarily for onshore employees. As a departure from the “office” model where employees commute to a central location to perform their 9-5 job, Softshoring refers to a “soft” as in malleable or flexible work location. That is, letting employees work from their home or remote location of their choosing, with the option to work from a central office when necessary. With the ubiquitousness of cellphones, and low cost of collaborative communications such as conference lines and virtual meeting rooms, a large amount of work becomes location agnostic. Obviously this strategy isn’t feasible for many jobs where proximity is necessary, such as working on an assembly line, but for corporate functions it can easily be implemented for immediate savings.
Implementing this strategy impacts efficiency in two main ways. The first is that it raises productivity. This may sound counter-intuitive, as common sense would cause you to think that if an employee was working from home they would be more prone to ‘shirking’ or doing non-work activities since there is no boss nearby. However, research finds that employees are actually more productive when they work from home or remote locations. This could be due to many factors, such as an increased sense of responsibility or ownership of their work, increased comfort, or reduced distractions. The second way that this strategy improves efficiency is that it lowers the cost of infrastructure. If you allow employees to work remotely, then you can cut back on your office space and related utilities, furnishings, and connectivity. One study finds that these savings could amount to over $20,000 per employee per year.
While this same strategy could be applied to offshore employees in countries such as China or India, the underlying infrastructure largely isn’t there yet, so it’s likely better to have a consolidated work location.