“IF YOU WANT TO SUCCEED YOU SHOULD STRIKE OUT ON NEW PATHS, RATHER THAN TRAVEL THE WORN PATHS OF ACCEPTED SUCCESS.” JOHN D. ROCKEFELLER
A few minutes ago, I needed to phone JetStar regarding an upcoming flight and, once I was connected, I was speaking to a Filipina customer service representative, sitting in a call centre in Manila, not too far away from where I am currently. Just like JetStar, Australian businesses of all sizes are realising the immense benefits of offshoring and are outsourcing functions to low cost countries.
Offshoring continues to evolve and we're now seeing increased trending in 'virtual staffing.' Virtual staffing is the practice of engaging staff in low cost counties, like the Philippines, but these staff work directly for your business. They may be IT staff, or accounts payable staff or admin staff or even engineers, but each day they turn up for work, log in and work a full day, expect they're located in different country. They're also not generally employees - they work on behalf of an offshoring company and each month the offshoring company invoices the client company.
The key driver of virtual staffing is the significant reduction in staff cost. A full time staff member, based in Manila, will cost a business around AU$2500 per month. That's the total cost - there are no additional costs for office space, superannuation, annual leave, workers compensation, payroll, internet, etc. Initially, administrative and IT roles were virtually staffed, but as many businesses are finding, there are really few limits to the range of roles can be virtually staffed due to advances in technology and thousands of available (and free) apps. Companies are now doing marketing, security, social media. HR and even compliance offshored, increasing efficiencies and reducing cost.
Case Study: To illustrate the point, here's a virtual staffing example that I was directly involved in. In 2015 Asia Offshoring, assisted a company hire a graphic designer in Melbourne. The salary range was AU$80,000. It was established that first year costs (recruitment costs, setup costs, etc) were AU$40,000. The total first year cost to hire a graphic designer in Melbourne was determined to be around AU$120,000. A graphic designer was recruited in Manila at a total cost of AU$30,000/year. That gave the client an annual saving of AU$90,000. To date, the client, is more than satisfied with the set up and intends to utilise only virtual staffing for future growth.
But "virtual staff are less productive," I hear you say. It's not true and it's one of the biggest fallacies I come across when talking to Australian businesses about offshoring. I'm based in Manila and every Australian manager that I have met who is offshoring doesn't have a bad word to say. Yes, there are challenges, especially initially but these can now be easily overcome. If you'd like to know for yourself, talk to any company that currently utilises virtual staff in the Philippines and they'll tell you that virtual staff are generally significantly more motivated, more productive, and less of a distraction to achieving business objectives.
The increasing number of millennials that are joining our workforce in conjunction with a broad range of growing technologies is having a positive effect on virtual staffing. Millennials are extremely comfortable collaborating online which is perfect for virtual staffing. The way that Millennials work is both increasing the speed of business and reducing the cost of doing business.
Looking to the next 5 years, the way businesses operate will change radically. All businesses, regardless of size, will be embracing virtual staffing, benefiting from significantly reduced operating costs, lower headcount and increased efficiencies. The bureaucratic, rigid, style that we Australians operate our businesses by will have been replaced by creative, adaptive, agile organisations.
Organisations do not need to wait to implement this change. Tremendous competitive advantages exist right now that will radically improve the way you do business. Follow Rockefeller's advise to be successful and reject the status quo and 'strike out on a new path'.
Andrew Styles is the Founder/President of Asia Offshoring Inc., a company providing low cost, revenue generating services to hundreds of Australian SMEs. Services include: $5/day Digital Marketing; $300 Websites; $100/day Virtual Staffing; and $200 Video Editing. Go to www.asiaoffshoring.com or contact Andrew for more details: firstname.lastname@example.org