Online offshore business process outsourcing (OOBPO): an analysis of the work relations between Filipino freelancers and their offshore clients

Online offshore business process outsourcing (OOBPO): an analysis of the work relations between Filipino freelancers and their offshore clients

This study explored the relationships between Filipino freelancers and their overseas clients, small-to-medium enterprises, within the framework of online offshore business process outsourcing (OOBPO). OOBPO refers to the delegation of business processes to external freelancers and differs from traditional offshore outsourcing in that no on-site overseas presence is required. Businesses under this structure use online outsourcing platforms such as ‘Upwork’ as transactional hubs to hire freelancers. As SMEs face resource constraints, OOBPO provides an attractive option which enables SMEs to access a variety of services. The OOBPO relationship faces additional challenges compared to traditional team structures for two reasons: Firstly, because team members are geographically dispersed, and secondly, because they typically have no physical contact as they work in a virtual team environment.

The context of this study relates to freelancers based in the Philippines. The reasons for choosing the Philippines is that the country is an attractive outsourcing destination due to its inexpensive labour costs, high literacy rate, good English skills and a drive to participate in OOBPO. In addition, the researcher owns a business that outsources freelancers from the Philippines and has established contacts with freelancers for over 10 years.

A qualitative study was undertaken using Hofstede’s cultural framework and Herzberg’s two-factor/motivation-hygiene theory. The study focused on the perspective of the freelancers and explored their experiences, expectations, attitudes and emotions towards freelancing itself and towards their clients. The study examined the relationships established by the freelancers with clients and the factors that facilitate and hinder their interactions. The sources, consequences and methods of handling conflict were viewed through the lens of Hofstede’s cultural framework to explain the culturally influenced conflict. The study also examined the demographics and backgrounds of freelancers in order to gain a comprehensive picture of their environment.

In-depth interviews were carried out with 30 freelancers, each interview lasting approximately 60 minutes. The interview questions were open-ended and revolved around experiences with OOBPO assignments, including conflicts and general expectations of the hiring business. Participants were encouraged to share their stories and express their expectations and advice in regard to their future work relationships. The interviews were coded according to the elements of the research questions and analysed using functions within NVivo.

The study showed that participants had high levels of job satisfaction despite a lack of certain hygiene factors (home office set-ups); while the presence of other significant hygiene factors caused satisfaction. Both findings contrasted with Herzberg’s two-factor theory, which contends that there are fundamental factors that are required to ensure a base level of motivation; additional factors will then lead to job satisfaction. The participants had two major expectations of their clients: good communication and clear instructions, which was explained by their collectivistic culture in line with Hofstede’s framework. Hofstede’s framework was also used to explain the identified five key factors for successful relationships between the participants and clients.1 Three main sources of conflict were identified: financial issues, misunderstandings and cultural barriers, all of which are largely explained using Hofstede’s framework. The consequences of unresolved conflict ranged from disagreements to premature termination of projects. The participants’ preferred method for dealing with conflicts was prevention, which was in line with their collectivistic culture.

The study identified and discussed key challenges in a culturally diverse freelancer–client relationship. It built on and synthesised the emerging international and national literature on the success factors that contribute towards functional and effective OOBPO relationships between freelancers and clients. The findings are of relevance to SMEs and will assist in improving their freelancing undertakings as well as increasing the viability and competitiveness of businesses. The study also contributes to the sustainability of SMEs who rely on OOBPO.