What’s the offshoring answer for the solopreneur?
By: Patrick Connolly
Tags: Philippines, Remote Working, Entrepreneurship, Offshoring, Outsourcing

I’ll first try and overview my #skininthegame on this topic. I experimented with ‘offshoring’ in 2019 and ran this experiment for about a 4-month period. I had brought on an offshore recruiter who was from and based in the Philippines. I also have a bit of an extra ‘insight’ into Filipino culture as my Mother was born and raised there so should be able to provide some decent thoughts and context due to that.

My notes below will be based on this particular experience (granted it’s a very small sample) and will also be based exclusively to offshoring to the Philippines. I imagine it may be ‘similar’ offshoring to different countries, but each will have certain intricacies or things that make them unique, so I won’t comment in ‘general’. I also mentioned offshoring for the solopreneur in the title but will too make comments on thoughts re organisations/larger companies.

Some random thoughts

I’m not 100% sure how to ‘structure’ this article as of yet so will just start with some random thoughts off the top of my head to begin.

First random thought would be to do the recruitment aspect yourself if you can. You’ll obviously need to engage some sort of service provider with Philippines expertise to look after aspects such as payrolling the resource etc, but I’d try to subtract the recruitment component if possible. I think there is a very large % cost save here which might be somewhat surprising or more than you think. Definitely more expensive from a % standpoint than say bringing on a locally based contractor (Australia) through a locally based recruitment provider (in my opinion/research).

Second random thought as a solopreneur I think the biggest ROI I got from this experience was the ‘accountability’ aspect that it added to my operation. By getting someone else involved in the business it made me get more ‘concrete’ on certain answers to things as a subjective on the spot answer would no longer be sufficient, made me lift standards in certain areas as I wanted to be confident and proud about all aspects of the business I was showing this person, and it also made me ‘document’ certain processes or thoughts in the way I do things that I otherwise would have left undocumented. I’m not a people manager and don’t desire to be one right now but as a note to self as I’m writing this — there might be a way to achieve this ‘accountability’ aspect again that doesn’t involve a hire.

Third random thought is I think that naysayers who make arguments along the lines of offshoring certain roles takes away local jobs is rubbish. I think this is a very ‘fixed’ mindset whereby these people think everything is negative sum. If someone gains something it means someone misses out on something (baloney). I think people with this train of thought are also the same types who will choose sides, pick 1 camp and not waver… they lack the capability to have nuance. One of my former employers’ ethos was Profitability = Opportunity and although a bit corny, I completely agree. If an activity is going to be a profitable one for an organisation this can translate in ability to grow and expand which naturally equates to further job opportunities and probably more senior ones at that.

What was my thinking behind this experiment?

I thought/think offshoring to the Philippines is a massive untapped opportunity. Although I realise it’s not ‘unpopular’ it still ‘feels’ somewhat underutilised to me. If anyone has some data on this, please feel free to send through.

I’m going to use some simple number examples below to try and show what I was thinking… please note I’m just making these numbers up but they shouldn’t be so far fetched that they should work in trying to demonstrate my point.

I thought that if I was going to invest ~100k per annum on a local hire to get let’s say a 4x return on investment you’d need that resource to bring in ~400k. If I was going to invest $35k on an offshore resource to get a 4x return on that investment you’d need that resource to bring in ~140k.

Yes, I recognised there were some obvious challenges with going offshore vs hiring locally, but my thinking at the time if going with the above numbers was — is it really a ~$260k handicap to be based offshore? I was also a big believer in the effectiveness of working remotely long before Covid-19 so maybe was a bit more optimistic than the average.

I as well thought that with the lower cost it would be ‘easier’ to achieve further multiples on the investment for eg only an extra ~70k brought in to get a 6x return rather than an extra ~200k for the local hire which I believed would make ‘scalability’ more achievable. I don’t know if I was right wrong or otherwise in all this, it’s just what was going through my head at the time.

The pros of offshoring

The ‘pros’ column is I think somewhat obvious, so I won’t spend too much time in this paragraph. There’s a ‘cost-save’ opportunity for what might be considered as the ‘same’ task and there’s a well-publicised, very true, and long list of commendable and desirable traits that Filipino’s bring to organisations. To reel off a few these they might include strong work ethic, very respectful, very diligent, competent, good at communicating in English both written and verbal, well-educated etc.

Another pro that I could have mentioned above in my second random thought is that they also offer a different perspective and different ideas, which can potentially lead to an improved way of doing things. This was the case for me and I can think of one particular adjustment off the top of the head I made thanks to it. It can sometimes be hard to get this kind of new perspective when only working with teammates who have grown up in the same culture, worked with similar organisations to you, went to similar or the same schools etc.

The Rainmaker Effect

This is where I feel I might be able to provide some semi interesting or different thoughts. I’ve been thinking about what to call this and I’ve decided to go with ‘the rainmaker effect’. I think this ‘rainmaker effect’ is what caps the potential of these kind of engagements. I’ve chosen to call it this for a couple of reasons — firstly I wanted to make sure to choose a term that wasn’t offensive, as I’ve hopefully made it clear by now that I’m quite proud of my Filipino heritage and think very highly of both the people and culture.

It’s a bit of a side-track but I think this ‘offensive’ aspect is super interesting. I picked up early on in life that I maybe had to choose different words or tones when communicating with my Filipino family so as to maybe be a bit more sensitive but didn’t really think too much of it or know why, I just put it down to a cultural difference. As I mentioned in post 1 how I’ve been trying to learn Tagalog in a bit more detail I’ve realised the language is quite ‘indirect’ and communicates in what I would call roundabout ways, as opposed to the direct, precise or blunt nature of English. After further inquiry it seems Filipino’s just see this as ‘respectful’ and fear appearing disrespectful if they communicate in a precise manner… I now believe this extends to most of Asian language/communication and is probably actually a well-known fact but for me it was a bit of a lightbulb moment. It explains a lot of arguments I had with my Mum growing up.

Anyway, back on track — The way I’d describe a rainmaker is someone who’s quite inventive, does things on their own accord a little, works things out, picks things up quickly, dives into the deep end, and can basically ‘makes things happen’. They perform. A rainmaker probably comes from the school of forgiveness > permission, and forgiveness is usually easy to obtain as they deliver and get results…. They make it rain!!!

Obviously there are cons and obviously not everyone is going to be this kind of high performer but I believe there needs to be a decent portion of these types involved in a company for the business to be achieving strong ROI on it’s employee investment therefore fostering profitability, growth, expansion, opportunities etc (if desired).

In the current state of affairs, I believe your Philippines offshore hire is going to be extremely smart, intelligent, hard-working, diligent, competent, responsive, have a good sense of humour, learn well, communicate with you effectively, have good teamwork etc, but I don’t think you’ll bring on a rainmaker.

To further add to this list I believe Filipino’s are very careful (dislike and rarely make mistakes), and also extremely respectful so probably see some of the traits/behaviours I described in the rainmaker above to be in conflict with that. I think the hire will be expecting a decent amount of direction and will only take action on tasks that they have extremely high certainty on. I also believe this translates into it being a bit more of a time based culture as opposed to an outcome based culture where if you ask a Filipino to work an 8 hour day, they’ll work a diligent 9, make sure this time is accounted for, and see it as being disrespectful to do otherwise. The rainmaker’s mentality on the other hand might be to try and overdeliver on the 8 hour day in less if it’s at all possible, or might work the 9 but in an attempt to deliver ~15 hours worth etc. An offshore hire won’t want to risk ‘stepping out of their bounds’ and will act accordingly in my opinion.

To further try and demonstrate my thought I want to reference 2 Filipino Proverbs below -

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Huwag kang mangahas lumipad kung mahinis iyong pakpak -Don’t you dare fly if your wings are weak

Anuman ang gagawin pitong beses isipin — Whatever you do, think about it seven times

…. Doesn’t exactly inspire risk-taking, action, or being Ok with making a mistake here and there does it!?

So, What’s the answer?

I don’t know. (great conclusion d*ckhead)

I don’t, but I feel like I have good questions to ask or things to suggest thinking about. Firstly, I think Filipinos need to be given the ‘green light’. Not only the ‘green-light’ but it needs to be a super fluro bright green-light! It’s hard to influence a whole cultural shift (not what we’re trying to do anyway) but I feel there needs to be some sort of encouragement of more risk taking or openness to mistakes to help inspire some of the magic you might get out of the performer we described above. As I mentioned not everyone is going to be that kind of worker, but I believe we’re capping potential if we don’t uncover a few here and there.

As an add-on to this green light I think it needs to further extend to the entrepreneurs/organisations trusting the Philippines with higher level requirements. I feel as if we’re always discussing how great Filipino’s are and continually putting together these long lists of highly positive traits that they can offer organisations, but then we put a restriction on what roles (level of complexity, seniority etc) we offshore… If the traits we list are genuine (they are) why would we put this restriction in place?

With the advances in AI, robotics etc organisations may have to look at opening up which roles are outsourced anyway as a lot of what’s offshored today might likely soon be (if not already) able to be replaced by technology.

Further, if we’re to draw a ‘positive’ from Covid-19 maybe it has helped highlight how realistic and effective remote working can be therefore maybe confidence is already increasing in regard to offshoring these higher-level requirements.

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Overall, I think change, improvements, adjustments etc are coming but I think the outlook for this industry remains positive moving forward both for business offshoring roles to the Philippines, and for the Filipino’s working in these engagements. Keen to hear your thoughts. If you know the answer, please let me know. Maraming Salamat.