Orbii founder Ivan Trajkovski urges companies to scrutinise upfront fees, opaque pricing and contractual obligations before engaging overseas service providers.
Australian businesses seeking to reduce operating costs through offshore outsourcing are being warned about excessive upfront fees, hidden charges and questionable service arrangements that can turn promised savings into expensive liabilities.
Ivan Trajkovski, founder of Orbii and an outsourcing expert, said some providers were reportedly demanding more than $4,000 upfront simply to facilitate the engagement of an overseas worker. Others advertise low monthly rates before adding recruitment, onboarding, software, supervision, replacement and termination charges.
“The promise is lower costs. The danger is signing an arrangement you don’t understand and discovering someone else is pocketing the savings,” Trajkovski said.
He cautioned that businesses under financial pressure can become vulnerable to aggressive sales pitches and unrealistic savings claims, particularly when they lack experience evaluating overseas service providers.
“The most expensive offshore service is the one you pay for twice: once to the wrong provider, and again to fix the damage.” — Ivan Trajkovski, Founder, Orbii
However, Trajkovski stressed that high prices alone do not establish fraud. Legitimate outsourcing arrangements involve recruitment, training, infrastructure, security and management costs. The key question is whether these services are transparently priced and actually delivered.
A low initial quote can also create longer-term risks when business processes, customer information and operational systems become dependent on a provider. Switching suppliers may then involve additional costs, contractual disputes and potential disruption.
Trajkovski recommends that businesses request itemised pricing, verify provider credentials, speak with existing clients and establish whether work is performed directly or subcontracted. Contracts should clearly define replacement policies, notice periods, data access, dispute resolution and exit charges.
He also advises companies to begin with a limited, clearly defined engagement before outsourcing an entire business function.
Offshoring remains a potential source of cost savings and access to global talent, but due diligence is essential. Businesses should compare equivalent service offerings, document performance expectations and retain control of their systems and information.
The central message for organisations evaluating offshore services is straightforward: transparent pricing, verifiable delivery capabilities and clear contractual protections matter as much as the advertised rate.