A direct discussion about offshoring right now
We all know that we are dealing with unprecented times with COVID-19 affecting businesses, communities and people across the world; I'd like talk about how this may or may not affect your organisations desire to offshore
Published 3 months ago
The current pandemic is clearly a multi-faceted, complicated issue that is not only affecting the lives of people directly through infection or employment but our extended communities. I argue that if there was ever a time to be thinking about our global community then now is that time.
I have been following many posts on news outlets, LinkedIn and Facebook where the topic of offshoring has come up; either when a provider is talking about their services or an organisation is considering offshoring and there have been common threads in the subsequent comments that I wanted to discuss, namely;
- Keep jobs in Australia!
- The "shaming" of organisations involved in/with offshoring
- The realities of operating during difficult times
So let's get into it, shall we?
Keep jobs in Australia!
I understand the sentiment that we should be looking after "our own" first, and any of my customers would attest to the fact that I do not advocate moving roles specifically from Australia to the Philippines just for the sake of it, instead we talk about supporting organisational growth targets through offshoring.
I cover the myth that 'Offshoring is about moving jobs overseas' in one of my first published articles here https://www.changefox.com/articles/five-offshoring-myths-ive-witnessed-and-strongly-disagree-with but this is very much expanding on the theme that offshoring is mostly about; hiring staff that you either can not find or afford locally.
I am a proud Australian and I do whatever I can to help my community and friends, but I don't do this exclusively with my Australian network.
Most of my customers are SME's, and often their ability to survive and realise competitive advantage in their industries relies heavily on their ability to pivot and make changes with their strategies to ensure that they can operate cost-effectively and efficiently. This is especially true when there are other economic challenges imposed on them, such as shutdowns due to pandemics or other financial crisis.
The "shaming" of organisations involved in/with offshoring
I have seen a lot of people aggressively commenting on organisations who either offshore or work in the industry and provide services to Australian organisations. To that, I would just encourage people to not make assumptions about the people or organisations you are commenting on. You don't have any clue of what they're dealing with, often they're making tough decisions (and stressing about them!) intending to keep other teams employed.
Try to be more supportive and understanding than making assumptions and throwing your negative comments at them.
The realities of operating during difficult times
There are industries affected in different ways during this pandemic; those that are directly impacted like retail. Even ignoring the customer service roles that are reduced during lockdowns or restrictions, if these organisations are unable to pivot quickly to online selling they will struggle to make enough sales to keep their doors open long term. We have seen huge companies closing down permanently and people have said that they "don't understand why, they are so big they should be able to keep afloat", but the bigger an organisation is, the more expenses they have. Leases are still needing to be paid on huge buildings or space in malls. Salaries and operational expenses are still coming in.
Then we move to technology companies or service providers who provide their products and services to other industries. Where those industries are affected significantly their willingness reduces in terms of investment in new software or services, especially where these are perceived as a pure cost rather than cost-saving.
Further, in tough times service providers tend to over-commit to land new deals. They make offers that are marketed as "special deals" during challenging times (just search #covid and see all the offers out there that have no direct relationship to helping people deal with COVID-19), essentially, they promise more for less money with the sole intention of keeping projects or customers coming in. So assuming this is effective and keeps projects coming in, it then puts significant pressures on operations to deliver in less time and often with fewer resources.
It is in a climate like this that offshoring becomes an especially appealing consideration for an organisation as they often offer significant flexibility in terms of staffing contracts and reduced resourcing (and internal HR & administration) costs while allowing them to meet customer expectations and hopefully still turn a little profit on the backend of the deal.
I am no economist so this is barely scratching the surface in this article, but I hope that it gives a little insight for those who are creating toxic conversations and threads on some of these topics.
Lastly, I wanted to talk about the living realities in offshoring hubs like the Philippines. I live in Makati, Manila and while I am fortunate to have a stable income and good living conditions, things are tough here for your average person here. While people in countries like Australia are dealing with living on government assistance (not suggesting this is easy!), not having enough toilet paper or needing to isolate and social distance; it is different here. Families often living hand to mouth, if they do not get out and work, they and their family members do not eat. It is that simple.
To put things in perspective; looking at population per square metre (PPSQM);
- Melbourne has approximately 20,000 PPSQM;
- Sydney has approximately 16,500 PPSQM;
- by comparison Metro Manila has approximately 43,000 PPSQM!
Before this pandemic, I volunteered for a charity organisation that worked with a community living in a cemetery. They live in terrible conditions; unemployment rates are crazy; sanitation and hygiene were considered a luxury that we tried to assist them with. Mostly though, I worked with the kids living there, who would often show up with torn or missing clothes. All of this was BEFORE the pandemic! More and more families have slipped into extreme poverty.
The reason I wanted to talk about this is that I would like to think that those people screaming about "looking after ourselves first" don't realise the challenges faced by people elsewhere in the World.
A job placed here in the Philippines not only helps an Australian organisation potentially stay open for their other local staff but changes the lives of a family. With that salary, a Filipino team member will most likely provide food and housing for their entire family unit.
It is in challenging times like this that we should be thinking Globally, not just about ourselves and our immediate communities.