If you go the easy path, you do end up paying a little bit extra. You can lease someone and have them in a facility and you’ll overcome all of those problems.
Cost of working direct
For an idea of pricing, there are different programs. Some talk about hiring someone in the Philippines for $1 an hour and $2 an hour. Other employers when working directly with a team member, will pay them between $4, $5 and even $6 an hour depending on skill level and what they’re doing.
It’s a good idea to pay what’s fair, a little bit above and beyond market rates so your team members don’t have to have two jobs. Sometimes if you try to skimp a little bit, they might try and make it up by moonlighting and trying to get a second job late at night to cover things. It still makes fantastic sense financially to pay a little bit more.
Seat leasing cost
The next level down is seat leasing. This is where you hire a space in a facility for your team member to go to work for you. You still end up paying the same amount per team member because you obviously still need to pay their salary. But over and above that, you probably pay around $1000 a month. You’ve got your base rate plus around $250 a week.
What $250 a week will get you is a reliable computer, it will get you reliable internet, it will get you reliable electricity with back up. It will get you the infrastructure that they need to go in and do their job and not be able to use an excuse and say, I don’t have this or I don’t have that.
Agent leasing cost
The top one, when you go agent leasing, it’s a complete, all in one package. The price includes what you would be paying for the facility if you were doing the seat leasing. So it’s an all inclusive price. You’ll find with agent leasing it covers so much more.
The agent leasing will cover things like the thirteenth month. Typically if you have a look at the seat leasing, that doesn’t even include the thirteenth month. At Christmas time, you typically pay an extra bonus through to your Philippines team member as part of the culture over there to have a Christmas bonus. That is the thirteenth month. That is an additional cost over and above. Then there are also things like sick pay and holiday pay that you will pay over and above. The agent leasing includes all of that.
You’ll get HR, you’ll get someone checking in, making sure they show up. You’ll get all of the facilities, you’ll get management. You’ll get the thirteenth month, you’ll get mandated health, you’ll get a lot of these other different benefits. Using agent leasing still works out to be a third of what it would cost to recruit an employee direct here in Australia. You don’t have to worry about super, holiday pay, sick pay. There are a lot of different benefits that come from it.
Maintain your Australian team
That is not to say that you shouldn’t hire locally or that you should outsource all of the jobs offshore, meaning Australians are losing jobs. A good proportion would be fifty percent of your staff located in Australia and about fifty percent located offshore. It will enable you to employ more local people here in Australia than you would have been able to if you hadn’t done outsourcing.
The big reason is that it just makes you more competitive. It gives you more competitive advantage. It makes it possible to run a business and have that extra margin for error. The combination of good agent leasing and having everything covered, with Australian based staff, will give you a significant competitive advantage.
Australia’s wages are some of the highest in the world, particularly for the minimum wages. As well, there are all of these extra costs that you need to add into the mix. The more that you can simplify it, the better you will be in the long run.
Many problems solved by using a facility
Infrastructure problems and supervision issues can get solved by going through a facility. By going for agent leasing and paying a little bit more, you can actually overcome a lot of those difficulties.
With agent leasing, you’ll overcome things like the lack of consistent supervision, the monitoring of the productivity issues and the differences in culture and communication issues. There is the lack of understanding when it comes to health care benefits and the thirteenth month, taxes, local employment laws and the way those sorts of things work. Those get overcome.
With one fell swoop we’ve wiped off a whole bunch of different problems when it comes to technical. Similarly for the supervision issues, with one simple move we’ve been able to elegantly remove a lot of those problems, through using a facility.
Establish your systems and procedures
The third and final piece comes down to systems and standard operating procedures and processes. The low standards and quality and lack of on-boarding, part of it comes from when a team member is inducted into your team. If you don’t set the right framework upfront, if you don’t give them the right training upfront, you’re not going to get the quality output that you’re looking for.
It’s the same when you’re recruiting locally. You can’t just get someone, drop them into a role and expect them to do it like that. You need to get some of this plumbing in place and these systems and processes and rules in place. Look for elegant solutions, find something that can fix multiple problems all in one go.
The importance of systems
You might think, I’m stuck in the day to day work. When on earth am I going to find time to make systems? Who has got the time? Maybe you know that systems are important, you’ve read the E-Myth, you’ve read Work the System, you’ve seen McDonald’s, you know systems are important but you think, where on earth am I going to find the time to do it?
It is that inability or not having those systems in place that is stopping you from growing through to that next level. It does depend where you’re at in your business growth. Everybody is at different level. But if you’ve been in business for more than a couple of years, if you’ve got clients and you’re selling products and services and you’re on the tools and you’re helping deliver, then systems is going to be one of these big breakthroughs.
You need to, at the bare minimum, have the main core systems in place. On-boarding a staff member is important. Have some systems around what some minimum standards are and some of the different services and repeatable processes in your business documented. Have a central place where the team can refer to them and actually go ahead and start to improve them over time.
If you do that, you can start to build a business that will work without you. That’s what you’re working towards. You need to develop the systems and processes so your business works without you.
Begin by recording yourself
You can just start by recording yourself when you’re doing a particular process or procedure. Record it and then take that and pop it into a text document and save it in your Dropbox.
Now you can share that with a VA or someone and say, I want you to build the procedure or checklist that goes around this. That’s something that they’ll then be able to use to guide them through the process. It will hopefully get someone outside of you creating these systems.
If you get this in place, this will start to improve a lot of the other problems that you might think you have when it comes to the lack of on-boarding and minimum standards. Even sometimes the speaking and comprehension levels just come through not having your tasks clearly identified and systems and processes for them to follow.
In the Philippines culture, it is easier for team members to work if they’ve got a process to work from. It will improve the productivity no end.
Put your solutions in place
These are elegant solutions to problems you face in outsourcing. If you can put something in place that solves your infrastructure issues through a facility or agent leasing, then you’re just going to solve all of those problems. If you then, for the supervision and the team based work, go for agent leasing, you’re going to solve a whole bunch more problems.
If you finally establish some systems and processes and procedures, you will make this whole outsourcing to the Philippines work. It will become your competitive advantage. You’ll really start to set yourself apart from the competition… and that’s simply by building a virtual team.
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