Businesses are forced to be efficient with their operations. There is only ever, at best, a slim profit margin left over at the end of each month. Once they have paid for their direct costs and overheads, there is maybe only 5%, 10% or 15% leftover. This means that up to 95% of revenues is fed back into the machine that generates the revenues.
And those are the lucky ones. There are many businesses that struggle to make a profit.
As businesses expand, the revenues increase, but so does the demand for inventory, resources and workforce. So it’s very hard for a business to outgrow the fine balancing of income and the need for resources. And usually, it’s the high growth companies that are the most cash-hungry and even cash-flow negative.
Business is tough. Business is hyper-competitive.
Then COVID-19 came along.
Adjusting to a pandemic
As if business wasn’t hard enough already, now with the pandemic, companies have to try and balance their books with plummeting revenues and increasing costs and uncertainty. In September 2021, 18 months after the COVID outbreak, a Census Bureau’s Small Business Pulse Survey showed that 39% of businesses felt that their “normal level of operations” will still take more than six months to happen.
On top of the cash crunch, businesses are dealing with a growing labor shortage and a workforce that demand higher salaries – and want to work from home. In August 2021, a “Road to Recovery” report showed that 59% of US small-business owners said they were having difficulty hiring and finding new employees. The struggle is real.
Not only have salary costs have been continually rising, but the total cost of employing someone – once you add all the employer obligations – can add another 45% above the salary. It is becoming increasingly difficult for businesses to balance their books.
Understanding remote work
There is a silver lining though. The pandemic has made businesses realise that remote work is an option. The lockdowns have forced people to adjust their daily routines and embrace online tools and remote methodologies to maintain their daily business functions – while staying at home.
Not so long ago, remote work seemed like an obscure lifestyle choice, reserved for just a small niche of adventurous workers. But after 18 months of COVID, the entire world has quickly caught up and it is now a part of the ‘new normal’.
As businesses embrace ‘remote’, they are realising that they no longer need to source their staff locally. Some businesses have found that they can just as easily hire offshore staff – at a fraction of the cost. They are able to save 60%-80% of the total employment costs when they hire people from popular offshore staffing destinations. This has been a powerful revelation for some businesses.
Access a global workforce
Thanks to today’s communication tools and remote-friendly processes, employers can now just as easily tap into the highly skilled global workforce. Companies across all sectors are now embracing outsourcing as they have found that they can get the same quality -and same outputs – for a fraction of the price.
Virtually any role can be offshored. Accountants, marketers, analysts, salespeople, designers, developers and administrators can all be sourced. If the job can be done in front of a computer, then the role can be done offshore. Businesses are hiring highly qualified professional staff covering almost any vertical.
Working with a global workforce, especially from an offshoring destination like the Philippines enables companies to dramatically cut costs, while at the same time drive revenues, innovation and growth.
Not for everyone
Outsourcing isn’t necessarily right for every business. If the business is heavily opposed to remote work, or they don’t yet have processes in place, or they can’t yet support a steady workforce, then maybe offshoring isn’t the most suitable solution right now.
The Philippines has a population of 110m people, all of whom speak great English, and there are almost one million college graduates each year. Philippine staff have a strong reputation for being an extremely culturally aligned, hardworking, and highly skilled talent pool.
Due to the lower living costs in the country, employers can find great staff at a salary range of just $6,000-$10,000 per year.
So many businesses are turning to outsourcing recently, so it is wise to explore the opportunity to see if it is right for your business. Employing people globally is enabling businesses to finally get ahead of their spending, and hire the great staff that they need – at a fraction of the cost.