Mark Engelmann: The Top 7 Reasons Why Outsourced Teams Fail

There's plenty of information available about how great Philippines outsourcing is and the positive benefits it can have on your business. But outsourcing successes are only half the story. Mark Engelmann has seen first-hand how outsourcing can fail – and what you need to do to avoid the pitfalls.

We know that, anecdotally, across the industry 50 per cent of businesses who try outsourcing fail to reap any benefits. But why does this happen when so many succeed?

Here are the top seven reasons why out-sourced teams fail:


When you start to think about the cost savings associated with an outsourced team, I wouldn’t blame you for getting really excited, and for good reason. You can hire someone in the Philippines for about 30 per cent of what it would cost you in Australia.

The trick here is not to get carried away by cramming as many unrelated tasks as possible into one job description. You’ll create a position that requires multiple skill-sets and can only be filled by a superhero!

I like superhero movies as much as the next person, but unfortunately they are fictitious. Superheroes don’t exist in Australia, the Philippines or anywhere else!


Often when you engage with an outsourcing provider you can choose to participate in the recruitment process. If you are faced with recruiting your own offshore employee, don’t take what’s on the resume as gospel. We learnt very early on that basic aptitude testing and job-specific testing are crucial in candidate selection.

After working with a Filipino team for some time, I’ve come to understand that they are motivated by different things. The Philippines is classed as a ‘developing’ country and as such many of the people who live there have very different daily struggles to us in Australia. It is always useful to keep this in mind when working across borders and cultures.

3. YES = ?

One thing Australians are well known for is being blunt. The downside is that we expect everyone else to communicate the same way! The simple truth is not everyone does.

You would think that ‘yes’ and ‘no’ are pretty straightforward, but this is not always the case. In the Philippines, people are generally grateful for a job. So if you ask your Filipino staff member if they understand something they will often say ‘Yes’, but not really mean it; we call this the ‘passive yes’. This means they do not fully understand or may have some questions, but think it a poor reflection upon themselves if they ask for help.

There are two lessons in this:

  • Try not to ask closed questions, which can be answered in one word
  • l always check for understanding.


During my time working with cross-cultural teams I have learnt that Australians are generally average people managers. I’ve rarely come across an Australian manager who has a framework they use when managing teams.

In contrast, I find Filipinos love being managed through feedback and KPIs. This means the idea of building an offshore team and putting it on ‘set-and-forget’ is doomed to fail.

To address this, ensure you:

  • Implement a management framework that your whole Australian team understands and uses
  • Develop SMART KPIs for your Philippines team
  • Check in regularly to assess task progress and offer your assistance when needed.


Managing an outsourced team takes time. You will also need to shuffle some resources around to properly integrate local and outsourced teams.

With this in mind, if you are flying solo and in start-up stage you will need to find the time to manage your outsourced team effectively. This may mean giving away some control, or hiring someone in Australia to look after operations and your outsourced team while you grow the business.


Our Australian team works remotely, and we’re all 100 per cent comfortable using web conferencing to meet with each other and the Philippines team. It is today’s technology that has made Philippines outsourcing such an effective option for businesses.

Your computer likely has everything you need to work with remote teams: a webcam, headset and web conferencing software, all of which is inexpensive and easy to set up. From a tech point of view, the only thing stopping you from running an offshore team is a closed mind.


Having well-documented processes is a must-have for building an effective outsourced team. That is why it is especially important to go with a real estate-focused outsourcing provider. Beepo already have staff ready to be placed, trained in industry best practice across all appropriate aspects of property management, sales, marketing and accounting.

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Mark Engelmann

Mark Engelmann is co-founder and Chief of Content at Beepo. He has helped hundreds of companies successfully imple-ment an outsourcing strategy in their business.