Outsourcing vs Offshoring

The use of offshore white collar labour to achieve significant cost savings is a relatively new concept. A number of different terms have been thrown about in describing the different ways that an offshore workforce can be implemented. You may have heard terms such as outsourcing, offshoring, offshore outsourcing, remote staff or BPO, to name a few.

With all the different terminology floating around to describe this phenomenon out there it can be confusing to gain an understanding of what solution will work for you. To make it a bit easier to understand, the general concept of using an offshore labour solution can be defined as either 'offshoring' or 'outsourcing'.

Outsourcing involves the organisation using a third party provider to provide the services required without having direct managerial control over that employee, meaning that the third party has all of the control. Using an offshore solution the organisation utilised the services of an intermediary who facilitates the process whilst the organisation maintains control of the employee.

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Is offshoring right for your business?

Tuesday, Dec 09.

If you have asked the question - Is offshoring right for your business? then you need to read into this article, explaining the pros and cons of offshoring

Dec09

Is offshoring right for your business?

Tuesday, Dec 09.

Many big corporates have successfully offshored for years. Small to medium sized businesses are now asking if this is something suitable for them.

The place to start is with an understanding of what offshoring is…it is where you work with an offshore service provider to assist in recruiting, engaging and managing permanently employed white collar staff for your enterprise. (Many business have the experience of engaging project based staff members in foreign countries…this is called outsourcing and is quite different.)
 

Australian businesses are considering offshoring to:

  • Increase profitability and enhance delivery without the ever expanding costs  
  • Meet business goals and boost productivity by engaging extra staff
  • Access expertise and specialist skills (such as SEO, website design and maintenance, accounting or social marketing) that they have previously outsourced locally
 

If you think that having a permanent team member based overseas is for your business the next high level considerations are:

  • Do you have the strategic and managerial skills locally to provide clear direction for an offshore team member? Successful offshoring experiences generally involve good local management and clear, consistent communication. 
  • Are the roles you are considering clearly defined? There are some roles that work very well in an offshore environment…accounts support roles are excellent a customer liason role is possibly not. 
  • Do you have the right technology in place, or is it possible to have the right technology in place, to allow offshoring to be successful? Considerations here cover internet speed, security and communication. These queries can be easily answered by an offshore provider.
  • Have you considered how this would impact on your local team? It is important that offshoring is communicated well to a local team.
  • Is your IP secure locally and how would you protect it offshore? Again a query that an offshore provider can provide guidance around.
 

If offshoring is sounding interesting you need to determine which provider is right for your business? There are many providers available, with many different offerings…very few apple and apple comparisons to be make. Some considerations include;

  • Length of the contract the offshore provider requires
  • The country the provider offshores from
  • Are they a generalist or a specialist in their services?
  • The quality of the facility and the location of the offshore providers premise
  • The IT capability and services they offer
  • HR Management capability the offshore provider has
  • How will they work with you to engage your team member and how will they help you manage them on an ongoing basis
 
Offshoring feels like an exciting new frontier for many businesses. As a service it has been around for many years but recent changes to technology have made it far more accessible. A good offshore provider will be able to help you navigate the process of engaging a team member so that it feels very much like taking on a new team member at home. If you think offshoring might be right for you it is worth exploring it further.

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The benefits of offshoring

Thursday, Nov 20.

Offshoring has many benefits. These are the biggest:

Nov20

The benefits of offshoring

Thursday, Nov 20.

Offshoring has many benefits. These are the biggest: 
 

Dip into a skilled labour pool. 

Many countries are suffering from a shortage of skilled labour at a reasonable price, but in the Philippines there are nearly 400,000 university graduates each year, a population of 104 million people and an average age of 22 years.
 

Grow without massive overheads.

Offshoring allows you to quickly expand your team without expanding your facilities, fixed costs, and capital outlays in your home country. 
 

Increase your core staff depth.

Offshore staffing can increase your core staffing depth, freeing up resourcing bottlenecks, adding capacity ahead of demand, and increasing your customer engagement. 
 

In-source external functions.

Functions you’ve previously outsourced, such as search engine optimisation, telemarketing, and social media management, can be brought back in-house and performed by your offshore staff for the same amount (or less than) you’re paying now. 
 

Maintain transparency and control.

You have complete transparency and control. Outsourcing doesn’t give you this, but offshoring does. You choose who will work for you, as well as their benefits, and training and career development pathways. 
 

Operate 24/7/365. 

Filipino employees are generally quite willing to work night shift and to customised schedules. The Philippines is in the GMT+8 and EST+12 time zones, so you’ll find it easy to cover hours that may be difficult locally.
 

Maintain market competitiveness.

It will become more difficult for businesses operating only locally to maintain their market competitiveness. Those who don’t take advantage of offshoring’s many benefits might find their competitors do!
 

Explore new business models. 

Offshoring allows you to reimagine the way you do business and the value proposition for your customers. This is particularly true if you’re in the professional services sectors where high-cost structures and hourly billing models are already under significant threat.
 

Focus on what matters to you.

Offshore staff can take over onerous or process-driven tasks and free you and your local staff to focus on core priorities. 
 

Develop the careers of local staff. 

Managers and other employees who learn how to establish, manage and control an offshore team will add a valuable skill to their resume. 
 

Save money. 

The savings from offshoring can be substantial. In the Philippines, salaries are typically about 20–25 per cent of those in Australia and Canada. Office rental is about one-third of the cost. Apart from electricity and internet, which can be more expensive than in your own country, all other costs are either similar to, or less than, what you’d expect at home. 
 
The cost of an offshore team in the Philippines (including our costs) is likely to be 40–50 per cent of the salary cost in Australia or Canada.  
 
Or if you compare the total cost in the Philippines to the total cost in Australia or Canada (which includes rent, electricity, internet connection, salaries, superannuation, payroll tax, workers’ compensation, HR and IT support, etc.), the total cost in the Philippines would be 65–80 per cent less than in Australia or Canada. 
 

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Using offshore Filipino Lawyers

Thursday, Oct 30.

So you have low level legal process work that you need completed but with clients demanding more for less you’re finding it uneconomical to have your junior lawyers do the tasks. What is the solution? One solution lies in the use of offshore Filipino lawyers.

Oct30

Using offshore Filipino Lawyers

Thursday, Oct 30.

So you have low level legal process work that you need completed but with clients demanding more for less you’re finding it uneconomical to have your junior lawyers do the tasks. What is the solution? One solution lies in the use of offshore Filipino lawyers.

Tell me about Filipino lawyers?

The Philippines was a colony of the USA for 15 years and as a result its education systems and universities are based on those in the US. The Philippines’ law degree is therefore quite similar to an American law degree. Students have to complete an undergraduate degree before being eligible to commence their law degree and once they obtain their degree they need to sit the bar exam. Failure rates for the bar exam are very high and in a typical year, only 20% to 25% of students will pass.

There are 105 law schools in the Philippines with the quality of graduates bearing dramatically between them. There are more than 5,000 graduates from these combined law schools each year.

How good is their English?

Law in the Philippines is taught in English and therefore the quality of both written and spoken English is very good. In addition, in the Philippines generally, English is spoken by 94% of the population and in some areas is the primary language.

What are their salaries?

A fresh graduate who has passed the bar exam, depending upon their results and which school they have graduated from, will typically be paid between $750 and $1,000 per month. A graduate who, either, has not sat or passed the bar exam will cost in the order of $500 to $750 per month.

Senior lawyers with five or more years’ experience are likely to cost between $2,000 and $2,750 per month.

What is quality of work?

As is the case anywhere, the quality of the work performed by a particular person will very much depend upon their level of training, experience and ability. With the right education, the right attitude and the right training, Filipino lawyers do of course have the ability to perform high quality legal work.

Can I hold them out as a lawyer in Australia?

No - the Philippines’ law degree is not recognised in Australia and as such you cannot hold out a Filipino lawyer as a lawyer in Australia. They can however work as a paralegal or a law clerk.

University partnerships

We are currently establishing partnerships with a number of the Philippines’ leading law schools to provide us with ongoing access to high quality Filipino law school graduates. 

If you are interested in finding out more about the possibility of using offshore Filipino lawyers at your firm please get in touch with us.

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