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The human side of outsourcing

Chris Moriarty
14 October 2011 5 minute readShare

Philipines-based expat Chris Moriarty of Flat Planet argues that rather than being un-Australian, outsourcing makes sound business sense and is a powerful tool in the fight against poverty, providing invaluable opportunities for the local populations of developing nations.

Myrna Padilla grew up in a hut made of palm fronds on a beautiful beach. But her life was far from idyllic. She tells of going to sleep with the sound of her stomach grumbling drowned out only by that of her mother crying because she had to send her kids to bed hungry. Her dad was an honest fisherman and a good man – but life was hard and they were the poorest of the poor.

At ten she spent her days scrabbling for seaweed and seashells to help feed the family – and while still quite young was already a mum herself to two young kids.

At that point Myrna joined the 11 million Filipinos who leave their families behind to earn money to send back home. She left her two small children and went to work as a domestic help in Hong Kong. It was 20 years before she came back home.

This overseas adventure was no holiday. The family is everything to Filipinos. Walking away and leaving her kids tore her heart. And the work was not easy and not well paid. A domestic help in Hong Kong gets maybe $100 - $150 a month.

However, it seems her family in Hong Kong were not too bad. When the eldest boy turned eight he got into computers. Despite having no formal education, Myrna sat down with the eight year old and learned about computers side-by-side with him.

Then, years later her time with the family was over and she moved back to Davao – the capital city of Mindanao where she was from. There, she used her knowledge of computers together with an old PC she had dragged back from Hong Kong to set up a small IT BPO company.

Today her business is a success.

The families of those who work for her are no longer torn apart by poverty. Despite her own incredible success, what she is most proud of are the photos of her employees standing together with their families, photos of her employees’ kids and cousins graduating from college, photos of her employees standing in front of brick and concrete homes, freshly painted, well maintained small houses that would not look out of place in the back streets of Balmain.

Myrna told her story to a room of 400 conference delegates – executives from around the world. We had endured days of the usual conference fare – a Cisco speaker talking endlessly about virtualisation, professors talking about BPO 3.0, HR specialists talking about career path planning.

So powerful was Myrna’s story (and so brilliant was her delivery) that this hardened and thoroughly jaded audience was mesmerised – and at the end she received a standing ovation clapped all the way off the stage.

Two hours later the President of the Philippines arrived and delivered the closing remarks. President Aquino is a global leader with the silky skills, confidence and entourage to match. But even he and his announcement for a Php500,000,000 grant to promote the industry was overshadowed by Myrna’s story.

Not that the President minded. The problem of family breakups caused by OFWs (Offshore Foreign Workers) is top of his government’s agenda.

When you go to the airport in Manila there are huge holding areas for OFWs. They are miserable places. At any time on any day there are hundreds of Filipinos there, dirt poor, gaunt, with a blank look in their eyes surrounded by family.

There are husbands leaving their wives, mothers walking away from their children, brothers leaving sisters and daughters leaving mothers. They are going to places like Saudi Arabia, Libya, China, Malaysia and others (unofficially many end up in Iraq or Afghanistan).

They become virtual slave labour, enduring terrible conditions often in remote locations – for the men often living in camps. (For example, an employer might confiscate a passport until a contract is complete). For the women, working in domestic situations can involve very difficult circumstances like domestic violence and rape. Every cent they earn they send back to their relatives from whom they may be separated for years.

There are more than 11 million OFWs and 11 million families torn apart.

Too often in Australia we get tied up and obsessed in ourselves. Despite incredible wealth and minimal unemployment (even in the midst of the financial crisis) we carry on about moving jobs overseas.

The business case for offshoring is sound – by being smart and using offshore talent in a smart way any business can transform itself from a business that struggles to stay competitive even in overpriced Australia into a business that can be truly globally competitive.

Offshore talent can transform a small struggling mum and dad training company in Melbourne into a globally competitive training company with super-slick systems, great customer service and an entrée to a global market (China needs 17.6million English teachers trained).

We all know the business arguments and they are beyond compelling.

But Myrna’s story is the human story behind all this kerfuffle.

From the perspective of the Philippines – where there are now 600,000 outsource centre workers --the industry means much more.

Outsourcing means that 600,000 families have not been torn apart. It means that countless children have enough to eat and can attend school. It means the government has a huge new stream of income tax revenue that it can use to fund those schools. It means condos are being built to house the ex-pats and new middle class Filipinos. It means hundreds of Starbucks and 7-11 stores all providing jobs in retail and logistics.

Ninety five percent of Australians who want jobs have jobs. At any one time there are enough job ads to soak up another percent or so.

Sure... we all want more. But all of us have a roof, food, access to transport and access to a world class education system. We all have what we need to at least have a go.

In the whole of the Philippines, serving the whole of the world, there are only 600,000 jobs from offshore destinations – only a tiny fraction are Australian. In Australia alone there are more than 11,000,000,000 jobs. If Australian business sends a tiny fraction to the Philippines... then it will make almost no difference to the labour market in Australia.

But... it will help make Australian businesses more competitive and more successful (and might even create new higher value jobs in Australia).

And certainly what it will do is help lift our neighbours out of poverty. It will create hope and opportunity. It will keep families together. It will make a stronger, richer and more cohesive region within which Australian business could flourish like never before.

You work in offshoring and attend BBQs in Australia and sooner or later someone will pick an argument with you rabbiting on with all the usual bola bola about Australian jobs and being akin to a traitor.

While that person is carrying on like a pork chop to me there is an Australian small business man telling his wife they have to sell the house because they can’t afford the wages, or a potential entrepreneur who just can’t figure out how to get started given a basic web site costs $2000.

Meanwhile there are kids begging on the streets and going hungry in the Philippines, Dads working in Iraq sending back $100 a month to their families, and young girls living with strangers working as domestic help in countries where they don’t even speak the language and have no rights.

Myrna’s story sounded pretty heroic to me. She certainly knows a thing or two about heroics. It is Myrna’s view that it is the BPO companies that are the heroes. What she sees is the opportunity and hope we bring to her people.

Beyond Myrna’s perspective I would add the opportunity and hope that offshore talent brings to business. It can create as much opportunity for Australians as it does for Filipinos.

Finally, what it does is bring people, cultures and nations closer together. We are all, after all, one people.

Chris Moriarty is the Managing Director of Flat Planet Pty Ltd

The human side of outsourcing
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Chris Moriarty

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