3 Questions companies forget to ask

The 3 Questions Companies Forget to Ask When Sourcing Talent From Southeast Asia

Southeast Asia is no longer a side conversation in workforce strategy. It is a serious part of how many companies are thinking about growth, capability and resilience. ASEAN now represents a market of roughly 680 million people, attracted US$226 billion in foreign direct investment in 2024, and continues to scale as a global business and talent hub. At the same time, Southeast Asia’s digital economy reached US$263 billion in gross merchandise value in 2024, underlining the region’s growing sophistication beyond traditional cost-arbitrage narratives. The demand side is just as strong: ManpowerGroup reports that 77% of employers in Asia Pacific are struggling to find the skilled talent they need, while Deloitte found that 80% of executives plan to maintain or increase investment in third-party outsourcing.

That combination helps explain why more boards, founders and leadership teams are looking at Southeast Asia for talent. But it also explains why so many sourcing decisions go wrong. In practice, companies often ask the most obvious questions first: What is the cost? How quickly can we hire? Which country is cheapest? Those questions matter, but they are rarely the most important. Deloitte’s 2024 survey found that 70% of executives say their traditional vendor management function is not fully mature enough to manage the extended workforce ecosystem properly. That is a useful warning: the challenge is no longer access alone. It is governance, design and execution.

The companies that tend to succeed in Southeast Asia usually ask three better questions early. They are not always the most comfortable questions, but they are often the ones that determine whether a sourcing strategy creates long-term value or just short-term activity.

1. Are we choosing a country, or designing the right operating model?

This is often the first blind spot. Many companies begin with a location decision before they have clearly defined the work, the management model and the level of risk they are prepared to carry. That is backwards. Southeast Asia is not a single labour market. It is a diverse group of jurisdictions with different legal systems, ownership rules, talent pools, language strengths, cost profiles and infrastructure realities. Choosing a market before deciding what work is being done, how it will be supervised, what service levels are expected and how success will be measured is one of the fastest ways to create friction later.

This matters even more because outsourcing and offshore talent strategies are now reaching deeper into the business. Deloitte found that 50% of executives have already used outsourced services for front-office capabilities such as sales, marketing and R&D, while 78% are leveraging Global In-house Centers and 70% have selectively insourced scope back from third parties over the past five years. In other words, modern talent sourcing is no longer just about moving repetitive back-office work to a lower-cost location. It increasingly touches customer experience, intellectual property, product development and brand reputation. That means the real question is not “Where can we hire?” but “What operating model best supports this work?”

A mature sourcing discussion should therefore start with design. What activities belong offshore, nearshore or in-market? Which roles require direct client contact? What level of local leadership is needed? What handoffs exist between the retained team and the new offshore team? What should remain inside your business, and what can sit with a partner? Those questions sound less exciting than salary benchmarking, but they are usually far more decisive.

2. Who will legally employ, govern and protect this workforce?

The second overlooked question is usually framed too narrowly, if it is asked at all. Companies often ask whether a provider can “hire people” for them. The better question is who will legally employ those people, how the arrangement will be governed, and what protections will exist around tax, data, IP, payroll, statutory obligations and local labour compliance. The answer affects far more than administration. It shapes risk allocation, employee experience, commercial flexibility and the credibility of the whole model. This is especially important in a region where growth opportunity is high, but legal and regulatory settings differ significantly by country.

The risk is not theoretical. IBM’s 2024 Cost of a Data Breach Report found that the global average cost of a data breach reached US$4.88 million, up 10% year on year. Forty percent of breaches involved data stored across multiple environments, 27% growth was recorded in intellectual-property theft, and compromised credentials were the most common initial attack vector. For companies sourcing talent across borders, that should immediately shift the conversation beyond headcount. If offshore or distributed teams are touching customer information, source code, financial records or proprietary processes, governance cannot be treated as an afterthought.

This is where ethical providers distinguish themselves. They do not just promise access to people. They are transparent about employer models, data handling, local benefits, statutory remittances, security controls, escalation paths, contracts and the limits of what they do directly versus through qualified legal or accounting partners. That is not bureaucracy for its own sake. It is how serious businesses protect continuity, trust and enterprise value.

3. What employee experience are we actually creating?

The third missed question is the most human, and often the most commercially important. Companies can become so focused on hiring that they forget to design what happens after the offer is signed. Yet retention, engagement and performance are where the economics of sourcing are ultimately won or lost. A technically successful hire that disengages, churns quickly or never fully integrates into the business is rarely a success at all.

Gallup’s latest workplace research is telling. Global employee engagement fell in 2024, costing the world economy an estimated US$438 billion in lost productivity. Gallup also found that 42% of employees who voluntarily left an organisation believed something could have been done to prevent their departure. The replacement cost is material: Gallup estimates that replacing leaders and managers costs around 200% of salary, and replacing employees in technical roles costs around 80% of salary. For companies building offshore or regional capability, those are not small leaks. They are strategic costs.

The interesting point is that retention is not only about compensation. Gallup found that 70% of preventable attrition actions were related to how people were managed day to day, including better manager interaction, career opportunity and workload support. In separate research, Gallup also found that well-recognized employees were 45% less likely to have turned over after two years. This is the part many companies underestimate when building Southeast Asian teams: local talent does not only evaluate the role. They evaluate leadership quality, career progression, communication, inclusion, benefits, work design and whether they feel part of something credible.

That means the right questions are practical. Who owns onboarding? How often will managers meet with offshore team members? What equipment, training and systems access are provided? Is there a career path? What does recognition look like? How are local market expectations reflected in benefits and employee support? In a region where skilled talent is in demand, those details are not soft issues. They are part of the operating model.

A more disciplined way to think about Southeast Asia

The strategic opportunity in Southeast Asia is real. The region continues to attract capital, digital growth and international business attention at a pace that few companies can afford to ignore. But the organisations that do well in the region are rarely the ones asking only whether Southeast Asia is cheaper. They are the ones asking whether their model is fit for purpose, whether their governance is robust, and whether the people they hire will genuinely be set up to succeed.

That is also where provider selection matters. A serious partner should welcome scrutiny on compliance, delivery standards, local expertise and ethical practice. At Ryoss, we have long believed that sourcing talent from Southeast Asia should be done with transparency, structure and respect for both client outcomes and local talent. The real value is not in moving faster at any cost. It is in building a workforce model that is commercially sound, operationally credible and sustainable over time.