There is plenty of debate in Australia and other Western countries about the role of offshoring in business. Here, SME owners share their views.
Some My Business readers have reacted angrily to the very notion of employing offshore staff. One simply said “get stuffed”, while another claimed that offshoring is the cause of dysfunctionality in many businesses, particularly major telcos.
However as Phillip Tarrant, editor of My Business and co-founder of its publisher Momentum Media, explains, offshoring often enables SMEs to scale in ways they would be unable to afford with domestic employees – meaning no jobs are actually lost, because they would not have otherwise existed.
Phillip explains that once a business finds its feet after several years, the next challenge is achieving scale. This can prove difficult as the business struggles to balance wage constraints with completing tasks.
“Often, business owners get stuck doing the $15 an hour jobs when they should be doing the $200 an hour jobs,” he says.
“[With outsourcing,] people can start to look at removing those $15 an hour or $20 an hour jobs … and concentrate on their important stuff.”
Phillip says the somewhat controversial nature of offshoring should be properly debated within the SME community.
“I think a lot of people have preconceived ideas about outsourcing into Manila. [I want to] potentially get people thinking a little bit more about how they can empower and supercharge their business by looking towards Manila,” he says.
Phillip is not the only business owner looking to offshore markets to expand, rather than replace, his existing workforce. My Business has met the leaders of numerous other companies, from web design agencies to call centres and consultancies to printing firms, who have tapped into increasingly educated and English-proficient workforces in other countries to grow their businesses.
Otto Dargan, managing director of Sydney-based mortgage broking firm Home Loan Experts, employs a support team in Nepal, and says his Nepalese team is now bigger than his Australian team.
Speaking with My Business’ sister publication The Adviser, Otto says taking on additional resources overseas has allowed him to significantly boost his service offering for new and existing clients.
“We’ve been able to get support to specialise in different lenders and loan types. We’ve created a post-settlement team that handles construction loans, fixed-rate expiries, annual reviews and product switches,” he explains.
“We can have excess capacity so our brokers never have to worry that we can’t deliver on what we promise. We can have data entry completed overnight, which means we can be faster to lodge an application. We can even have a full-time auditor who ensures that our team is compliant, and receive feedback on if they are following our processes.”