Another episode in the Q&A video series for SME’s and business leaders.
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Intro: I’m Stuart Ayling, in this episode I’m speaking with Nerissa Chaux and Nerissa is Head of Happiness and Co-Founder at Filta. In this episode I’ll be asking Nerissa when should a company consider using an offshore team.
Stuart: Well I’m here now with Nerissa Chaux and Nerissa is Co-Founder and Head of Happiness at Filta and her focus is on helping Australian businesses build and manage local and offshore teams that actually work. So thanks for being here today Nerissa.
Nerissa: Thanks so much for having me Stuart.
Stuart: That’s OK, my pleasure. This is an interesting area for many businesses because they hear about offshoring and outsourcing and there’s all sorts of different options. Before we actually get into the topic of today which is all about when should a business consider offshoring, can you give me just a really brief explanation of what is offshoring?
Nerissa: An excellent question Stuart because a lot of people get confused. They equate offshoring to outsourcing. So let me just cover both of those. First of all outsourcing is normally when you’re outsourcing a project or a task or a job function, and you don’t know who the other person is on the end. So one day you might get Jane next day you might get Tom, so they don’t actually work for you if that makes sense.
And then the offshoring is a much more personalized and I believe a more effective for Aussie small business, as it’s a 40-hour a week solution. Based in an office environment, they’re hired specifically for your business, and you have complete say about who joins your team, and you have complete say about training, workflow processes, and essentially they are an employee of yours. They’re just in a different country.
Stuart: OK that sounds like a lot more manageable process than in the past. I’ve seen other businesses and heard many people talk about the whole process and it seems like it’s something very distant that you don’t really have a lot of control over.
I like what you’re saying there. So that’s good. So look the first thing I want to check with you is when should a business actually consider offshoring? You know, what are the triggers that a business owner should be recognising and starting to think maybe offshoring could help me?
Nerissa: Excellent question. I think it’s a variety of reasons and one of those is space management. So to give you an example I caught up with a gentleman last week, it’s a medium sized business and literally they’re looking at offshoring because they cannot physically fit any more local staff in their office and when they’ve been investigating office space, additional office space, it’s just too cost prohibitive. So space management.
I think the obvious one is staffing costs. But with staffing costs people often think they have to sacrifice quality for a reduced salary which I don’t believe is the case. And just people resources. So that’s pretty much what I think I the main triggers.
So that when businesses are looking at their strategy and their people strategy, and what they are going to do for growth, and also profit margin. Profit margins can get smaller, so people need to look at creative and different ways where they can still have a business in 5, 10, 50 years.
Stuart: Yep gotcha. OK so it really should be part of that consideration for growth planning, as you say there’s lots of different aspects to consider. As a business owner, you know if I was expanding my team and I’m looking at my office space and I’m looking at, well we need to do more. How do we make all this happen, what’s the best way to do it?
What sort of jobs, or what sort of positions are really best for offshoring? And why do you think those sorts of positions are best to offshore vs ones that aren’t?
Nerissa: OK that’s a good question. So I believe that, and my experience, the corporate back-end are absolutely exceptional places to look at first. So that is in the accounting arena, administration, P.A.’s, legal, paralegals, legal assistants. Construction, even with draftsman, estimators. HR, so HR administrators, even recruiters. And I’d say definitely without a doubt developers. So all types of development and creative, creative design & marketing.
Stuart: So, sorry Nerissa. When you say developers, you’re meaning software developers?
Nerissa: Yes, my apologies, software developers, IT support. So there’s a whole range of functions that you can look at. I think also what you need to be very mindful of is in my experience and I think when you’re talking to Australian customers, is client facing customer service facing roles I believe should be still based locally.
Because people like to buy off people. And it’s no disrespect to the resources in other countries that are in you know customer-facing sales lead roles, but I think Aussies like to deal with each other and I think that’s really important to keep that here. I also think that any strategy or team lead roles should be based in Australia.
So I think when you’re looking at your your people and how your business is structured I think what’s really important is to understand what needs to be based here, and what can we look at offshoring? And not every job should be offshored and sometimes not every job should be full-time. Not every job in Australia should be, could be permanent part-time, it could be contracting.
It could be hiring a freelancer for a specific project. So I think you really need to look at and talk to people who can give you the best strategy and what’s best for your business.
Stuart: OK, and really start the thinking there with those administrative office, sort of internally focused roles, more so than the customer facing roles. That’s really best way to approach it.
Nerissa: Yes in my opinion in my experience and having been involved in the offshoring and the local recruitment industry for quite a while, I definitely think that’s best approach.
Stuart: OK excellent. Well look we’re nearly out of time but I’ve got one more question I wanted to ask during this episode. Yeah time goes really quick. Look what are the basic steps, look what if someone’s thinking about offshoring what are the the basic steps? Can you sort of list them off by saying you’ve got to do this this this and this. What should a company be doing?
Nerissa: First of all I think you need to be open and think laterally and creatively about what are the best solutions. So I think you have to have the right mindset about a what people solution best suits your business. Secondly I’ve got quite a lot, actually I’ve got a massive list.
Stuart: Well, just keep it short if you can.
Nerissa: Yeah OK. I think you need to understand what you can, what we just talked about, what you can offshore and get the best benefit and what isn’t going to be effective for your business. I think you need to have a full understanding of the job tasks and the job role and what success and failure looks like in that role when you’re offshoring.
Because you know in terms of the Philippines that 6,000 kilometres away and distance can create issues so it’s really important to understand not only yourself and your team, but also your offshore member, exactly what the expectations are.
And lastly, which I think is extremely critical, is the partner the offshoring partner that you decide to work with. Definitely shouldn’t be a tick and flick, bum on seat approach. I would be assessing their capabilities, their infrastructure, where they’re based, because that has a lot to do with attracting talent in the Philippines. What support they’re going to offer you and your team, and also what benefits and retention strategies do they have in place for their Manila staff.
So those are the things that I would be definitely considering.
Stuart: OK excellent. So there’s certainly a few important topics a business owner or management team should be considering when they’re looking at offshoring and it sounds like they certainly need someone with your sort of experience to help them consider that, so that they’re making the right decisions and not jumping to the wrong conclusions, or or or maybe not thinking deeply enough about it. So that’s really great, appreciate you sharing your insights Nerissa.
Nerissa: Thanks Stuart.
Stuart: OK I look forward to seeing you another time.
Nerissa: Alright thank you so much.