In today's topic, I'm going to share along with you is that I'm going to be discussing "Is outsourcing exploiting low-priced labour and hurting local small enterprises?" And the reason why I open this question up is recently I received a message from a local outsourcing company here that said to me, "Hey Tyrone I think you're really, really not doing a very good job because you're exploiting cheaper labour than what it is than what we're supposed to be charging here." Evidently,it will cost at about $1500 here in the area to engage a virtual assistant for a small company whereas I can teach people how to outsource and find people for about $300-$350 US per month and they're charging about $1500 US about to be able to hire and outsource to these people.
Now don't misunderstand me. I've got no worries with that. And, it's definitely already half the price of what costs to hire just a local executive assistant here. Like any executive assistant, you'd be checking out paying them a baseline of $3000 to $4000 each month just to have them work in your workplace full time and also too, do the work that you might want them to do and on top of that, you're going to include super taxes, etc and so forth so in fact it'll be a little more than $4000. But to hire a virtual assistant, a full time virtual assistant earning a living for 40 hours a week domestically here with an outsourcing company costs you in approximately $1500 and that's included everything. You don't need to bother about the taxes, you don't need to bother about super annuation, you don't need to bother about setting computer for them and many others. And he commented that I feel he thinks that I'm really exploiting it really cheaply because to engage someone for $300 every month is really, really inexpensive like it's less than a dollar or $2 per hour. And, now I'm going to present you with my opinion. I know that a number of people are getting really edgy with this. So I'm going to give you my outlook and how and where I sit on it.
I think, outsourcing is yet another way to provide a job for someone else and also so that you can give them skills and a livelihood. The real difference between hiring someone here and hiring someone overseas say in Philippines, or India or any of those other countries and particularly for me, I hire people in the Philippines, is that their economy is amazingly different. They have a different foreign currency to us. And if you're to go over there and basically live their standard living, the cost of living would be so, so much lower and thus that's why their paycheck are so much lower. However in comparison, they're getting virtually the same say wages as what we would be getting here but our exchange rate exchanges so therefore it looks like it's so much cheaper. Say somebody in the Philippines they're getting paid 20,000Php per month just as a full time programmer. 20,000Php every month equates to roughly about $400 US each month, approximately. Whereas here in Australia, you're probably looking at hiring a full time programmer for roughly about 10K a month like for a really, really serious type of programmer that I'm hiring in the Philippines. Now, 10K -- $10,000 AU versus 20,000Php, 10,000 you can do many items in Australia. Standard living is much higher that's why you ought to be paid that much higher. And also too, $10,000 takes you quite a bit of way but after you pay your mortgages, your food, your expenses and stuff, you might only be left with maybe about 5 or 4K each month or so. So the price of living is very high whereas in the Philippines, 20,000Php really does push them a lot further as well, too. So regarding proportional scale and also the standard living, it's very much relative. And that's the reason why people just don't understand that I'm actually doing a good thing to give a job for people inside the Philippines and paying them that kind of rate. And, if I had to hire someone here, yes person here might not get a job here but I'm actually providing a job for someone overseas. And because we are a global economy now with internet, with quick access with social media, we can know more about resources similar to that. Basically you can contact someone and you will be able to get in touch with someone instantly.
Whereas back then, to access the economies and scales, gain access to all those kind of resources it'll take you days, weeks, months even just so that you can access it. So time does change and if you're not staying in touch, particularly large companies right now like large telecommunication companies, they're outsourcing to Philippines, they're outsourcing to India and they're outsourcing to Russia. All those countries out there, their economies and scales are nearly in proportion but their exchange rate makes it look like as though they're not getting as much back. So that's the reason for me why I'm sure it's not a bad thing, it's a great thing. You actually give a job for someone else. And yes the person in the community, you may lose the job but that means that they'll have to go out and be a little more either a better entrepreneur to look for a job and upsell their skills and be a little more specific and professional because the more professional you are at a particular skill, the less demand there would be.
So I'm just going to reiterate on what I'm saying. It's not a bad thing, we're not exploiting inexpensive labor, we're actually getting a benefit here and also providing a benefit for other people overseas and in addition, small business owners can be helped by this if they think they're going to be hurt by this. If you are not starting to outsource as business in order so that you can compete with medium to large sized companies, you're falling behind the eightfold because I know that a lot of large companies are already doing it already. You may have heard this when you pick up the phone, it gets re-routed over to the Philippines and you'd be chatting with a Filipino. It's very common, I've been hearing that myself and I've even had times when I said, "So which part in the Philippines are you from?" They go Manila, Cebu, I'm not surprised.
Now don't misunderstand me. I've got no worries with that. And, it's definitely already half the price of what costs to hire just a local executive assistant here. Like any executive assistant, you'd be checking out paying them a baseline of $3000 to $4000 each month just to have them work in your workplace full time and also too, do the work that you might want them to do and on top of that, you're going to include super taxes, etc and so forth so in fact it'll be a little more than $4000. But to hire a virtual assistant, a full time virtual assistant earning a living for 40 hours a week domestically here with an outsourcing company costs you in approximately $1500 and that's included everything. You don't need to bother about the taxes, you don't need to bother about super annuation, you don't need to bother about setting computer for them and many others. And he commented that I feel he thinks that I'm really exploiting it really cheaply because to engage someone for $300 every month is really, really inexpensive like it's less than a dollar or $2 per hour. And, now I'm going to present you with my opinion. I know that a number of people are getting really edgy with this. So I'm going to give you my outlook and how and where I sit on it.
I think, outsourcing is yet another way to provide a job for someone else and also so that you can give them skills and a livelihood. The real difference between hiring someone here and hiring someone overseas say in Philippines, or India or any of those other countries and particularly for me, I hire people in the Philippines, is that their economy is amazingly different. They have a different foreign currency to us. And if you're to go over there and basically live their standard living, the cost of living would be so, so much lower and thus that's why their paycheck are so much lower. However in comparison, they're getting virtually the same say wages as what we would be getting here but our exchange rate exchanges so therefore it looks like it's so much cheaper. Say somebody in the Philippines they're getting paid 20,000Php per month just as a full time programmer. 20,000Php every month equates to roughly about $400 US each month, approximately. Whereas here in Australia, you're probably looking at hiring a full time programmer for roughly about 10K a month like for a really, really serious type of programmer that I'm hiring in the Philippines. Now, 10K -- $10,000 AU versus 20,000Php, 10,000 you can do many items in Australia. Standard living is much higher that's why you ought to be paid that much higher. And also too, $10,000 takes you quite a bit of way but after you pay your mortgages, your food, your expenses and stuff, you might only be left with maybe about 5 or 4K each month or so. So the price of living is very high whereas in the Philippines, 20,000Php really does push them a lot further as well, too. So regarding proportional scale and also the standard living, it's very much relative. And that's the reason why people just don't understand that I'm actually doing a good thing to give a job for people inside the Philippines and paying them that kind of rate. And, if I had to hire someone here, yes person here might not get a job here but I'm actually providing a job for someone overseas. And because we are a global economy now with internet, with quick access with social media, we can know more about resources similar to that. Basically you can contact someone and you will be able to get in touch with someone instantly.
Whereas back then, to access the economies and scales, gain access to all those kind of resources it'll take you days, weeks, months even just so that you can access it. So time does change and if you're not staying in touch, particularly large companies right now like large telecommunication companies, they're outsourcing to Philippines, they're outsourcing to India and they're outsourcing to Russia. All those countries out there, their economies and scales are nearly in proportion but their exchange rate makes it look like as though they're not getting as much back. So that's the reason for me why I'm sure it's not a bad thing, it's a great thing. You actually give a job for someone else. And yes the person in the community, you may lose the job but that means that they'll have to go out and be a little more either a better entrepreneur to look for a job and upsell their skills and be a little more specific and professional because the more professional you are at a particular skill, the less demand there would be.
So I'm just going to reiterate on what I'm saying. It's not a bad thing, we're not exploiting inexpensive labor, we're actually getting a benefit here and also providing a benefit for other people overseas and in addition, small business owners can be helped by this if they think they're going to be hurt by this. If you are not starting to outsource as business in order so that you can compete with medium to large sized companies, you're falling behind the eightfold because I know that a lot of large companies are already doing it already. You may have heard this when you pick up the phone, it gets re-routed over to the Philippines and you'd be chatting with a Filipino. It's very common, I've been hearing that myself and I've even had times when I said, "So which part in the Philippines are you from?" They go Manila, Cebu, I'm not surprised.
About the Author:
Curious about the benefits of outsourcing? Mass Outsource is an outsourcing course which drives you through both the basics and the advanced strategies behind successful outsourcing that will let you save time and money.. This article, Outsourcing: Why It Isn't A Kind Of Exploitation From Experience is released under a creative commons attribution license.
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