How to get offshoring right the first time

While offshoring may sound like a fix-all for contemporary business challenges, employers are being urged to anticipate and strategise against common pitfalls and challenges.

As Australia increasingly sets its sights overseas to fill crucial skills gaps and cut down on local operating costs, HR Leader spoke to Deel ANZ country leader Shannon Karaka to examine the implications for employers and the risks businesses face.

According to Karaka, Australian businesses are not only facing a skills shortage but also a time shortage, fuelling an internationally expanded talent pool search.

He said: “Australian businesses that hire overseas are mostly looking for skills. They usually widen their talent pool internationally because they can’t find the people they need at home, or can’t find them fast enough.”

The statistics tell a story of businesses doing everything they can to move with the times while balancing cost and operational efficiency.

Karaka noted that Deel’s 2025 State of Global Hiring found that software developers were the top cross-border hire for Australian companies, most often from the US and UK.

He also said: “Deel’s data shows the best-funded startups hire for skills too. Among startups founded between 2020 and 2025 that have raised more than $100 million, cross-border hiring is concentrated in high-income markets such as the UK, Canada and Germany.”

Reflecting on these findings, Karaka said that companies tend to hire along familiar corridors, shaped by language, proximity and similar regulation.

However, businesses that don’t inform themselves of the compliance and operational management that offshoring demands can risk falling victim to financial or data-based scams.

“This risk of being overcharged when hiring overseas usually comes from not knowing who is responsible for what. When that’s unclear, a business can be billed for a full salary while the worker receives less or finds out later that tax and contributions were never paid,” Karaka said.

In the same vein, data management and accountability can be overlooked, with Karaka noting that the Privacy Act dictates that an Australian business that sends sensitive information overseas is responsible for how it’s handled there, despite not having the same level of oversight.

As such, Karaka urged employers engaged in an overseas arrangement to check local contracts and payslips to ensure they match the invoice and that the work is being done as required.

Further, he said: “Global hiring works best when it starts with a strategic look at the skill a business needs rather than the cost. Begin with the role you can’t fill locally, then look at which markets have that talent. Choosing a provider on price alone can mean fewer checks and more turnover later.”

In this way, worker classification should be clear to all parties, and all overseas team members should be treated and trained the same way as local staff, including being part of team meetings where possible – especially given that these steps often encourage retention.

For those in disparate time zones, Karaka offered the practice of rotating time zones.

“Every overseas hiring arrangement should have one person in the business who is accountable for it. Before signing with a provider, get written answers on who the legal employer is in each country, the full cost per worker over 12 months, how each worker is classified and where their data is stored,” Karaka said.

In addition, “employers should apply the same pay standards to overseas staff as they do at home, intentionally underpaying wages has been a criminal offence in Australia since January 2025, and the same standard makes sense for someone working for an Australian business in Manila or Bengaluru”.

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