A beginner’s guide to offshoring

A beginner’s guide to offshoring

Do you have a growing business but find skilled staff hard to come by or expensive to employ? Check out this guide to what offshoring involves for Aussie SMEs.

“There's two sides to the business, really,” explains Tom Cragg of KMC Solutions, an offshoring business based in the Philippines.

“The one side is the [virtual] office space … we currently manage around 6,000 desks here in metro Manila.

“The other side of the business is what we call ‘staff leasing’. It's essentially hiring virtual teams on behalf of offshore clients, hiring them under our corporate umbrella, and managing all of the HR and payroll moving forward, as well as the facilities management.”

According to Tom, this type of offshoring allows Manila-based employees to become a fully integrated extension of their Australian employer, yet the employer is free from most of the constraints typically associated with taking on new staff.

“I suppose, in a nutshell, all that's left for our clients is the everyday management of the staff,” he says.Map of Australia with ripple effect overlay

This kind of outsourcing, where employees and the equipment they require to work are effectively ‘leased’, provides greater flexibility for busy business owners, enabling them to get with on the job of growing their business rather than sourcing and managing people, says Tom.

“Every company is slightly different. Some CEOs will always want to do a lot of hand-holding, especially initially when we set these teams up,” he says.

“It's really a time-saving device for those senior management guys where a lot of the back office stuff can be handled here in Manila, whereas they've got some of the more customer-facing roles still on the ground there in Sydney or Melbourne, Brisbane, Perth, wherever they're based.”

He adds that for many business owners, their offshoring journey begins with payroll and accounts functions.

“I think that's typically the sort of starting point with these accounts and then people come into the landscape here, realise that there's additional talent or some of those more creative roles or web developers,” he says.

His colleague Joe Curran adds: “I guess a lot of the times as well people aren't fully aware of the extent of which roles ... can actually be outsourced. A lot of people think it's just the virtual assistants or someone like that, but it actually goes much further beyond that to ... higher-value roles.”

The Philippines has seen phenomenal growth in outsourcing in recent years, particularly for businesses based in the likes of Australia and the US because of the time zone and the local proficiency in English.

“A large reason for that is 100 million people [who are] English-speaking, Western-oriented [and have come through] a good education system,” says Joe.

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A beginner’s guide to offshoring
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