Hiring the right talent is only part of the formula for offshore outsourcing success.

Hiring the right talent is only part of the formula for offshore outsourcing success.

When executives explore building an offshore team, they often focus on the calibre of talent available in their chosen offshore location. However, getting the talent right is only part of the formula for offshore outsourcing success. There are many more things that need to be taken into consideration.

A. Talent

Ok, granted, getting the talent piece right is super important. When most businesses explore outsourcing work to the Philippines, they want to build capacity at a lower cost or reduce their cost of doing business. However, do not fall into the trap of becoming intoxicated with hiring “cheap labour”.

Every year over 1 million school leavers are entering the workforce in the Philippines. The minimum wage is approx. $350 AUD per month in salary, and thus folks will happily work in an entry-level call centre role for 20,000 PHP per month, which is equivalent to approx. $550 per month.

Sadly, for this kind of money @ 20,000 PHP per month in salary, you can only hire a junior with little work experience who may or may not have finished years 11 and 12 at school. Plenty of “mega outsourcing organisations” have built their talent acquisition model on hiring thousands of these rookies on the basis that they will obtain quality through quantity.

Whereas a business owner of an SME or mid-market organisation, you simply don’t have the scale to play that game. Nor do you want to. Thus, you need a very different talent acquisition strategy. To maximise the value you get from your offshore employees, you must hire for communication, cultural, skills and experience fit. Yes, you need to pay a premium compared to an entry-level role, but these high-calibre employees can add significantly more value to your business. Filipinos have been diligently working for US, UK, and Australian companies for over 15 years, and you will be pleasantly surprised with how capable they are.

Yes, go to the Philippines to save money! However, don’t hire “cheap labour” but hire offshore talent for communication, culture, skills, and experience fit!

B. Service

When using an offshore outsourcing provider, you buy a SERVICE that sets up your offshore team for success now and in the future. Numerous functions support your offshore team’s success that many executives are unaware of. These things include:

  1. Compliance Work. To hire employees legally in the Philippines, you need to have a compliant legal entity in the Philippines. Most people are amazed when we share the reporting obligations to maintain a compliant business in the Philippines.
  2. Processing Payroll.
  3. Operational Support. To support your employees and solve operational issues.
  4. Human Resources. To manage potential people issues. There is a different labour code in the Philippines, which you need to comply with.
  5. IT Support. Not only will you need advice on the best to set up your offshore team from an IT infrastructure point of view, but your remote team will require desktop support to address connectivity, power issues or IT equipment failure, etc.
  6. Customer Success Support. You will need someone on the ground in the Philippines to be your ambassador to make sure you have a fantastic service experience.
  7. Other. There are several other support functions, for example, legal, to address legal or industrial relations matters, etc.

Also, the level of service provided varies significantly across the offshore outsourcing industry. Like any industry, there are low-cost, low-service models and at the other end of the spectrum, there are premium providers with a high-touch service model. Again, do not be seduced by an offshore outsourcing provider that has the cheapest “Service Fee”. Like most things in the world, you pay for what you get.

This is why we call our proposition Offshore Talent as a Service (OTaaS). To help future customers to understand they are not just buying “talent” but talent bundled with support functions to deliver on our service promise – for our customers and employees to have a fantastic experience alike.

If you chose a low-cost low service provider, you often need to invest in additional internal resources to help support your offshore team. Time and time again I meet with organisations that have found the “bottom of the market” in terms of the Service Fee charged for a professionally run offshore outsourcing business and wonder why they do not get the service they need.

Whereas we provide a high-touch service model but charge albeit a small premium when compared to those providers at the bottom of the market. The additional $200 (ex GST) AUD per month per headcount in Service Fees may seem different, but it allows us to deliver on our service promise.

C. Culture

The reason you use an offshore outsourcing company is that you want your offshore team to adopt your business culture and ways of doing things. However, it’s important to find a partner that is closely aligned with your culture, too.

D. Value Add

If sending work offshore is new to your organisation, you will need a trusted partner who can help you address foreseeable and unforeseeable issues. For instance, providing sound advice on how best to transition to the new way of working with an offshore remote team.

In summary, there are many things to take into consideration before deciding which offshore outsourcing provider to use.