The 7 Deadly Sins of Outsourcing to the Philippines

A lot has been said about what employers need to do in order to be successful outsourcers to the Philippines. Now, we want to give you a list of things that you absolutely need to avoid if you want to save yourself from headaches, heartbreaks, disappointments and frustrations.


Forgivable Versus Non-Forgivable Mistakes

When you venture into outsourcing, you should never expect to get everything right, especially if it’s your first time hiring remote employees from the Philippines. Outsourcing is a continuous learning process and a constantly evolving one as well.


There are certain mistakes that are so grave that it can have big and long-term repercussions. These mistakes will teach you a lesson, but it’s not a lesson that can help you in your business operations. Furthermore, these mistakes can make you lose faith and trust in the benefits that outsourcing can bring you and your business.


What are these mistakes that have such a negative impact on an employer’s mindset that you should absolutely avoid them at all costs?


1. Don’t Pay Your Filipino Employees In Advance

Remember, you are not necessarily in contract with your employees, even if you have an agreement on paper with them. There’s no legal remedy for you, and even if legal options are available, it’s a long, expensive and arduous process.


This is why you should never pay your employees in advance. While the Philippine remote workforce is filled with trustworthy employees, you still cannot discount the possibility that you can have employees in your team who are only working for the money. All they care about is getting their salary.


If you give these “just-for-the-money” employees their paycheck in advance before they even deliver the work, there’s a chance that you won’t get what you already paid for.


Filipinos are not used to get their salaries in advance, even in the traditional employment setting. So, never pay your virtual employees in advance, unless you are 100% sure that they will deliver the work as promised.


2. Don’t Provide New Hires New Gadgets

If you’ve ever been a mid-level executive in a company, you’ve probably experienced being provided with productivity gadgets on Day 1. You’re given a new laptop, a company phone, perhaps a new tablet. When you resign, these gadgets are retrieved by your company because the reason they provided you with these things in the first place is to help you do your job well. Once you’re no longer working for them, there’s no reason for you to keep these gadgets.


In the remote workplace where you are continents apart from your employees, it’s not wise to provide your new hires with new gadgets. First, you won’t be able to retrieve them. Second, when you give gadgets to your employees, you’re not just lending the gadgets to them, you’re actually giving it to them.


Never provide new hires with new gadgets. It is okay to give long-term employees (those who have been with you for more than a year) with gadgets if you think it will boost their productivity, but it’s better if you implement a pay-back scheme. This way, you’re not actually giving gadgets to them, but you’re lending money so they can get these new items. To pay you back, they will agree that they will get a reduced salary for a period of time until they pay the entire amount.


3. Don’t Give Your Remote Workers Your Credit Card Information

Some outsourcers become so reliant on their remote workers that they practically eliminate themselves from their day-to-day business operations – including financial transactions. Examples of which are paying suppliers, paying for monthly subscriptions, booking flights, payroll, etc.

Not a good idea at all. You should never ever share your credit card information with your employees because at the end of the day, it’s your finances and your credit on the line. Even if you trust your remote employee, you can never tell what can possibly happen with your credit information. For example, what if they are sharing their computer with someone, like a roommate or a boyfriend? What if this person sees your credit information in their computer?


You can ask your virtual assistant to do all the pre-payment work for you (i.e. sorting out invoices, pencil booking a flight), but when it comes to the actual payment wherein you enter your credit card information, you should do it yourself. The same goes for your PayPal information and other financial information where money is accessible and can be stolen.


4. Don’t Provide Full Access to All Your Files

File sharing is an important aspect of outsourcing. It allows you to be efficient, productive and keep everything in one place. It also allows you to delegate tasks more efficiently. Instead of emailing your employees and attaching files manually, you can just five a file’s cloud location and let your employees access the files themselves and edit right there and then. It saves time and lessens email back and forth.


The easiest way to do this is to do a company-wide sharing, meaning all your employees get access to all your files.


It may take more time to do a selective sharing, but it should be done. A graphics designer does not need access to your invoices. A content writer does not need access to your web development files. In short, every team member should have restricted access and only get hold of the files that they need. Dropbox is the perfect tool for this.


To protect the integrity and security of your files, never share everything to everybody and make sure to constantly review sharing permissions to ensure that only the necessary people have access to certain files.


5. Don’t Hire the Last Minute

If this is your first time outsourcing, it is not advisable that you hire just a couple of days before you actually need that person to start. There can be a bit more leeway if you had success in outsourcing before, but if you’re a total outsourcing newbie, you’ll need to give yourself at least a week before making a decision on whether to hire someone or not.


If you need that person to join your team a few days after posting your job ad, your hand might be forced to just hire the first candidate to apply, or the best applicant among a group of not so qualified individuals. Being time-pressured is not the right way to start your outsourcing endeavor in the Philippines. Plus the fact that finding the right and the best person for the job can take time.


The best way to avoid this is to plan in advance. If you’re seeing outsourcing opportunities in your business, make a list of the tasks that you want to outsource, when do you need them outsourced, and the non-negotiable qualifications that you are looking for. With a carefully laid out outsourcing blueprint, you will avoid feeling rushed into bringing in Filipino employees into your team within such a short turnaround time.


6. Don’t assume that Outsourcing is the Miracle Your Business Has Been Waiting For

You said outsourcing will save me money?”

“You said outsourcing will boost my business productivity?”

“You said outsourcing will allow me to earn more while working less?”

These are some of the questions that we hear from frustrated and disappointed business owners and entrepreneurs who seem to be not getting their expected ROI from outsourcing. Outsourcing has a lot of benefits – saves you money, boosts your business productivity, grows your profits, etc. – but never assume that it is the answer to everything. It’s not a miracle pill that can cure your business.


This is especially true if your business is beleaguered with deeply entrenched problems such as bad management, an unprofitable business model, inefficient and redundant processes and systems. Remember, you are the one outsourcing tasks. How your employees perform is only as good as the managers managing these tasks and the systems that you have in place.


Before blaming outsourcing for the lack of positive results, take a closer and deeper look into the inner workings of your business and identify deeply entrenched problems that are making your business stagnant.


7. Don’t Lowball Filipino Employees

Currently, the minimum wage in the Philippines is 466 Philippine Pesos (PhP), approximately $10.83 per day or $1.35 per hour. This is six times cheaper than the minimum wage in the United States. Now, the question is this –

Is it fair to pay your Filipino employees just the minimum wage?

The first step to answering this question is knowing who gets paid the minimum wage in the local employment context. Filipinos who receive the minimum wage are those who are working in construction, in factories, as messengers – essentially those who are involved in manual and physical labor. In the BPO industry, the average salary is PhP 15,000, plus night pay (for those who work at night), non-taxable food and transportation allowances and health benefits.

When deciding the fair salary to give your employees, your peg should be the BPO industry.

But that would mean less savings for me, right?

The answer is yes and no. Yes, because you wouldn’t get the savings as opposed to when you’d follow the prescribed minimum wage. No, because you would still bank savings as opposed to when you hire someone in-shore.

However, when deciding how much you should invest on your Filipino workers salary, you should not solely base it on the money you’re spending, but more importantly, the quality of the people you’re getting.

What a lot savings-focused virtual employers don’t realize is the fact that when hiring virtual Filipino employees, you only get what you pay for. Low quality comes with a low price tag. Experienced and talented Filipino employees know their worth and they wouldn’t settle for anything less than what they think they deserve.

But let’s say someone extremely competent and talented took your low ball job offer. Human instinct dictates that when you’re not earning enough, you look for greener pastures. What do you think will happen when one day, another virtual employer approaches your worker and offers a higher salary commensurate to his or her talent?

Your Filipino employee will leave you without thinking twice.

To be perfectly honest, Filipino virtual employees have had their fair share of virtual employers who milk their employees up to the last drop and pay extremely low salaries. At this point, it’s no longer a matter of savings on your end, but an issue of ethics. Do you want to be that guy or gal, who in known to being a penny pincher?

Remember, if you pay peanuts, you get monkeys.

So, how much should I pay my Filipino Employees?

Here are some baseline figures for full time (40 hours per week) work, culled from successful outsourcers:

– General Virtual Assistant – $350
– Article Writer – $600
– SEO Specialist – $600
– Junior Web Developer – $700
– Senior Web Developer – $1,200
– Junior Video Editor – $450
– Senior Video Editor – $700
– Junior Graphic Designer – $450
– Senior Graphic Designer – $800
– Project Manager – $700

Take note that these rates are just baseline numbers. There are employees who are more experienced and demand higher salary while there are less experienced employees who are willing to work for less.

So, what if you can’t afford these rates? This is a tricky question to answer because we are strong believers that outsourcing to the Philippines is a great way to take your business to the next level. However, you also have to confront the reality that you have not yet reached that point that you can actually hire staff – offshore or inshore.

You should also consider less experienced employees who can grow with you and your company. You’ll pay slightly lower salaries, but at least the commitment from your employees is there because they see the growth of your business as they growth as well. Just make sure that you stay true to your promise of financial growth as your business progresses.

Another option is for you not to hire full-time. You can hire part-time or freelance. Another trick is to hire employees who live outside of Metro Manila, the country’s capital. Hiring from other cities may mean spending less because the living expenses in these places are lower, hence the lower salary requirements.


Don’t Repeat the Mistakes of Outsourcers Who Came Before You

We were able to create this list because these mistakes have been committed by outsourcers who came before you – lets all learn from their mistakes and not repeat them. Be forewarned – these mistakes can cost you time, money, and bring about unnecessary frustration, stress and disappointment.


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