How Offshore Staffing Can Help Australian SMEs Scale Successfully
Australian Small and Medium Enterprises (SMEs) are facing enormous pressure in the current economic climate. According to recent reports:
With 98% of Australian businesses considered as small businesses, this presents an alarming outlook that necessitates a strategic pivot for SMEs to scale and survive.
“With small businesses becoming increasingly time and resource poor, it has never been more crucial to adopt simplified backend processes and automate cumbersome admin tasks.”
An SME’s capacity to scale is vital to its growth in order to generate revenue without a drastic increase in costs that will only eat up their profit margin. But if SMEs are hindered by limited resources – from financial constraints to talent shortage – how can they invest efficiently to scale their business successfully?
A 2023 survey by Money Transfer Comparison revealed that 60% of Australian SMEs would consider recruiting overseas professionals to address the lack of skilled onshore talent and the increase in local wages. This is where outsourcing companies in Australia can fill the talent gap and provide cost-efficient solutions through offshore staffing services in the Philippines.
Benefits of Offshore Staffing for SMEs
Budgeting operational expenses and hiring skilled manpower are among the top concerns that SMEs need to consider if they want to scale. Outsourcing to an offshore team in the Philippines provides strategic benefits that can address these challenges. Leveraging the country’s professional yet cost-effective talent will empower Australian SMEs to quickly scale their business.
Cost savings and budget management
The cost of living in the Philippines is significantly lower than in Australia, making it a major factor contributing to the substantial savings that SMEs can achieve through offshore staffing.
Aspect | Cost Savings | Rationale |
Labour Costs | Up to 70% | Philippine salaries and benefits are lower* compared to Australia. *Within local competitive ranges |
Payroll Taxes | Up to 15% | Reduced payroll taxes in the Philippines. |
Office Space | Up to 20% | Offshore staffing services provide workspaces, removing the burden of maintaining a physical office space in Australia. |
Employee Benefits | Up to 5% | Simpler benefits packages for offshore staff in the Philippines. |
IT Software Hardware, and other essential equipment | Up to 10% | Offshore service providers equip remote teams with the necessary IT infrastructure and work-related equipment, saving SMEs from investing in these locally. |
Training and Development | Up to 5% | Philippine professionals possess high English proficiency and a wide range of skills suitable for various industries. |
Time Zone Advantage | Up to 10% | Overlapping work hours can increase productivity, giving SMEs the bandwidth to extend their operational hours. |
When creating and managing the budget for investing in offshore staffing companies, SMEs should practise due diligence in analysing these key considerations:
Access to specialised skills and expertise
According to a recent report, 47% of Australian employers are struggling to hire skilled talent in today’s tight job market. The report also revealed that 97% of Australian business executives believe expanding their operations globally is essential to remaining competitive.
Hiring additional skilled employees is necessary for SMEs to scale successfully. But this can be especially challenging for SME business owners given the lack of qualified candidates in the local job market. Offshore staffing companies in the Philippines can provide SMEs with a wider pool of talent, possessing a solid educational foundation and skill sets that can be utilised across many industries.
What started out in the 1990s as being the “call centre capital of the world”, the Philippines has fully established itself through the years as a top destination for outsourcing a broad range of non-core or specialised functions.
Factors that make Filipino workers the ideal choice for offshore staffing | |
Educational background | The K12 educational system in the Philippines provides the necessary preparation for students to become members of a future-ready workforce for global employment. Part of the curriculum involves training for basic technical and soft skills. This enables students to secure work after graduation, even without tertiary education. |
Skill strengths for various occupations | Filipino professionals are renowned for their diverse skill sets and professional expertise. Key roles that can be outsourced to remote staff include customer service support, IT and software development, administrative services, digital marketing, finance and accounting, human resources, creative services, and data entry management, among others. |
High level of English proficiency | Majority of the workforce can write, speak, and understand basic English, making it easier for the core team of Australian SMEs to communicate with their offshore counterpart in the Philippines. According to the 2023 EF English Proficiency Index, the Philippines is ranked at #2 in Asia and #20 worldwide. |
Culturally adaptable | Filipinos are known for their hospitality, which helps them build strong, positive relationships with foreign employers and seamlessly integrate into diverse work environments. |
Exceptional work ethic | Filipino workers exemplify qualities that are highly valued in the workplace. They are hardworking, respectful, collaborative, resourceful, and resilient in the midst of challenges. |
How Offshore Staffing Facilitates Growth
Offshore staffing solutions in the Philippines can create opportunities for Australian SMEs to explore their growth potential without having to make huge sacrifices in terms of time, effort, and finances. In fact, there are more than 300 Australian organisations that employ approximately 44,000 Filipino offshore workers for various non-core and high-level roles across different industries.
Flexible according to business needs
It’s important to understand that the offshore team isn’t meant to substitute your core team. It’s about building a flexible workforce that can be scaled up or down as needed, depending on what would benefit the business.
With the support of a remote team in the Philippines, SMEs can have skilled professionals on their side that can handle more complex business functions. This can help expedite speed-to-market strategies that will empower SMEs to quickly launch new products or explore new markets for expansion.
This flexibility of offshore staffing gives you access to a wider range of skill sets that will be utilised when the business needs it the most at the right time. Having a remote team of specialists opens up avenues for innovative ideas without the burden of high investment costs associated with hiring additional full-time employees.
Frees the core team from non-core functions
A common problem with SMEs is that their internal team is constantly bogged down by tedious, time-consuming but essential business tasks that distract them from their core responsibilities. This lowers their productivity, missing opportunities where they can channel their efforts more efficiently towards business growth initiatives.
Outsourcing non-core tasks to offshore staff can help streamline operations, giving the in-house team of SMEs more bandwidth to focus on their primary goal: expanding the business. Offshore staffing enables SMEs to manage their operating expenses more efficiently, ultimately leading to increased revenue for the company.
Choosing the Right Offshore Staffing Partner
For SMEs that want to scale with the help of offshore staffing services in the Philippines, it’s important to be thoughtful about finding a partner that will deliver successful business outcomes. Here are some recommendations on how to assess and select an offshore services provider.
If you’re short on time, you can always get the help of the provider in working through the below.
- 1First determine your goals, requirements, and expectations
What business goals do you want to achieve as you scale? How will you reach them? What are the bottlenecks to achieving these goals. How can offshore staffing services potentially resolve those? - 2Briefly outline your business processes
This doesn’t need to take long, one whiteboard session should do it. It will allow you to identify which functions of the business should be outsourced and which should remain onshore. Bear in mind the necessary expertise and qualifications that fit your requirements. - 3Conduct a basic cost-benefit analysis
A simple ‘ballpark’ cost-benefit analysis will help you get and idea of how much you’ll save and where you can allocate your resources more efficiently. You can refine this when you engage with your selected offshore staffing company. - 4
Research and evaluate potential offshore staffing partners
Look for outsourcing companies in Australia who can fit the requirements that you’ve listed earlier. Visit their websites and take advantage of their free downloads/resources to give you an idea of how they work. Use the following criteria to help you evaluate your selections:Pricing The K12 educational system in the Philippines Coverage of the fees, upfront costs, long-term savings, and cost effectiveness Flexibility Customised solutions and ability to scale quickly to your evolving needs Expertise Recruitment process, talent sources, and their experience in your particular industry Track record / reputation Reviews, testimonials, and references from other clients Account management Extent of their managed services to ensure quality Infrastructure Tech capabilities, IT systems (hardware and software), data security and privacy protection protocols, and communication channels Communication Consistent communication and transparency throughout the offshoring journey Cultural compatibility Alignment to your company culture, values, and work environment Legal considerations / compliance Comprehensive knowledge of Australian and Philippine labour laws, data protection laws, intellectual property rights, and tax regulations Contract with provider Clearly defined fees, deliverables, service levels, performance expectations, contingencies, and other stipulations - 5Book an appointment
Once you’ve narrowed down your choices, have a meeting with a representative of the offshore staffing company for a more in-depth discussion. Ideally, you should visit the country where the remote team is based so you can see for yourself how the workplace looks and how they work onsite.
Steps to Implement Offshore Staffing
Now that you’ve selected your offshore staffing partner, here are the next steps to ensure that the remote team is well-integrated into your business.
- 1Initial Meeting
The offshore staffing company works with you for an in-depth analysis of your company’s specific business requirements, identifying the precise scope, parameters, and roles needed for the project. A thorough assessment of all aspects of your business is undertaken to ensure the offshoring project aligns with your strategic objectives. - 2
Recruitment
With a clear understanding of what your business needs, the offshore services partner begins a comprehensive recruitment process aimed at selecting top-tier talent using their extensive database of qualified candidates. A meticulous screening of the candidates is conducted to assess both technical capabilities and cultural alignment. - 3
Talent Integration
The offshore staffing provider manages the seamless transition of new hires into your business operations with an adaptive onboarding process tailored to individual needs. New team members are given the required tools and knowledge for immediate productivity. Supervising the remote team’s orientation and interaction with your internal team can smoothen the integration process for a more harmonious work relationship. - 4
Performance Management
Ongoing assessment and feedback processes are essential to track the remote team’s progress, enhance their efficiency, and maintain peak performance. Using the latest employee analytical tools, the offshore staffing company provides precise performance evaluations, offers constructive feedback, and creates tailored career development plans that align with their professional growth and your company goals.
Managing Offshore Teams Effectively
Now that you’ve selected your offshore staffing partner, here are the next steps to ensure that the remote team is well-integrated into your business.
A major concern in outsourcing is how managers can supervise their remote team, with the preconceived notion that there’s lack of oversight. On the contrary, the offshoring method allows you to maintain control over your remote staff. It enables you to set your standards and establish your company culture for your offshore team to adapt to.
Here are suggestions on how you can manage your remote team effectively. An effective offshore services provider can also help you in this aspect with their efficient end-to-end managed services. Beyond recruitment and onboarding, they also provide professional HR consulting, conduct performance reviews, and facilitate payroll so you can focus on the remote team’s quality of work.
- 1Smoothen the learning curve
You and your remote team need time to adjust to each other’s personalities and work styles. Mistakes are bound to happen so be patient with one another. Provide a safe space so they’ll feel comfortable to ask questions or bring up any concerns, and be open to their feedback as well. Filipino workers tend to be reserved at first so it helps to make them feel at ease with you. - 2Set expectations clearly
Be specific about your expectations to ensure everyone is working towards the same goals. Define the purpose of the outcomes you’re expecting from them to build engagement. Avoid making assumptions about the team’s understanding of priorities. - 3Schedule a quick check-in
Set a daily or weekly meeting to update your remote team on their tasks, catch up on their progress, or just simply get to know more about each member. Use video conferencing tools to conduct your face-to-face meeting. This enhances engagement, clarifies communication, and fosters better collaboration. - 4Encourage innovation
There’s nothing wrong with giving them directions to meet your standards. But micromanaging every step of your team’s activity inhibits their creativity. Focusing on the outcomes boosts engagement, empowering your remote staff to come up with innovative ways to fulfil the goals you’ve set. - 5Use the right tools
It’s essential that your remote team is equipped with the appropriate tech tools to facilitate communication, enhance collaboration, and improve productivity. Coordinate with your offshore services provider to ensure that your remote team has access to these platforms.Video conferencing applications For online meetings and presentations
e.g. Google Meet, Microsoft Teams, Skype, and ZoomProject management tools For organising tasks and tracking your team’s progress
e.g. Monday, Trello, ClickUp, and AsanaCommunication and collaboration platforms For maintaining connections with your team
e.g.
Email: Microsoft Outlook and Gmail.com
Instant messaging: Messenger, Skype, WhatsApp, Microsoft Teams, and Viber
File-sharing apps: Miro, Sketch, and FigmaCloud-based services For providing online access to digital assets
e.g. Microsoft Azure and OneDrive, Google Cloud and Drive, Salesforce, and Dropbox - 6
Deal with potential obstacles
Unexpected distractions or uncontrolled events are bound to happen when working with an offshore team. Whilst the remote staff should also be held accountable for managing these situations, you can help by being flexible with deadlines, assessing their workload, or coordinating with the offshore staff provider in finding adaptable solutions to help them focus and accomplish their deliverables to avoid major business disruptions. Empathy is key and both sides are encouraged to understand each other’s stressors and struggles. - 7
Find time for fun
“All work and no play makes Jack a dull boy.” If you want to keep your remote team engaged, add a little fun by making time for online games, treating them to lunch, or schedule a visit to the Philippines and spend time with your offshore team. It’s a great opportunity to strengthen the bond between you and your remote staff.
Overcoming Common Challenges
Working with a remote team can bring its own unique set of challenges. Here are the most common ones with recommended solutions to mitigate these challenges.
Time zone difference | This can affect workflows when working with a remote Philippine team. Schedule meetings during shared hours, use project tools with time tracking, and leverage instant messaging for efficient communication. |
Miscommunication | Filipino remote teams may not be familiar with local jargon, despite their strong English skills. Avoid misunderstandings by using clear language. Conduct online meetings and encourage the team to ask questions so everyone is on the same page. |
Cultural contrasts | Filipino workers may be more reserved, so building trust and fostering collaboration is important. Team-building sessions can help. Include remote teams in company-wide communications so they’ll feel valued as being part of your organisation. |
Conclusion
Offshore staffing services provide more opportunities for SMEs to grow their business. They can benefit from its cost-efficient savings, access to highly skilled overseas talent, and flexibility to scale effectively.
Explore offshore staffing solutions with Twoconnect, an outsourcing company in Australia that can help you build an offshore team of professionals in the Philippines. We provide efficient and effective end-to-end managed services in HR consulting, talent sourcing and recruitment, onboarding, performance management and payroll facilitation so you can focus on business growth.
We have worked with SMEs in Australia who were able to scale successfully with the support of our remote teams in the Philippines.