This episode is the third installment of Derek’s podcast featuring Neville Samuels. They will talk more broadly about outsourcing, the future of outsourcing, different outsourcing destinations, and different outsourcing options.
- Neville is the owner and founder of VirtualStaff365. They help small and medium-sized businesses by employing, recruiting, growing and retaining great virtual staff.
- Neville started using VAs for his own e-commerce company.
- According to Derek, a client’s initial engagement and experience are very critical because one bad experience could lead to a client abandoning the whole concept or experience.
- Derek and Neville briefly discussed the different outsourcing destinations and the specialization of each destination.
- The Philippines – customer service
- Israel – Innovation
- India – Tech/software
- Neville also mentioned that although the Philippines is far cheaper than South Africa in terms of the cost of outsourcing, there is still a 30-50% savings compared to hiring your staff in Australia.
- They also briefly touched on the future of outsourcing and its impact to the BPO industry.
- Derek thinks that outsourcing is a rising tide and that we can all benefit from it. So there’s no sense of competition. What we need to do is to cooperate and encourage as many business owners into this thing called outsourcing.
- According to Neville, the Philippines has become the go-to location for customer service and repetitive work.
- It makes a big difference for businesses that are apprehensive, to know that there’s someone local that’ll understanding things. Which is a big advantage for Neville because he is based in Melbourne.
- Outsourcing is a win-win for everyone.
- Neville highlighted the importance of hiring the right people and the difference it would make to your businesses if you get this right.
Welcome to another episode. The Outsource Accelerator Podcast. My name is Derek Gallimore. And this is episode number 125. So today I’m joined again by Neville Samuels. He is the founder and owner of the VirtualStaff365. We’ve actually spoken to Neville before in Episode 119 where we explore the origins of this man, his business and outsourcing experience. Then in episode 122 we discuss his company the VirtualStaff365 and the value he provides for his clients. And then today we talk more broadly about outsourcing, the future of outsourcing different outsourcing destinations, different outsourcing options. So there’s a lot of value in this episode for you especially if you’re looking for a blended outsourcing destination approach. If you want any of the show notes or any more information on this episode than go to outsourceaccelerator.com/125. Enjoy.
Derek: Welcome back everybody. Today I am joined by Neville Samuels again of. Welcome back everybody. Today I’m joined by Neville Samuels again of VirtualStaff365. Hi Neville. How are you doing?
Neville: Hi Derek, Hi listeners, it’s great to be here.
Derek: Thanks. Thanks for coming. And I’m really excited to talk to you again. You’re an oracle of knowledge both in terms of general business but also outsourcing and of course you run and own VirtualStaff365 which specializes in the management and placement of the VAs which are virtual assistants. So I suppose initially we have spent time talking on two podcasts prior so if you want to get back in here Nevels backstory then please do so but Neville do you just want to introduce yourself first.
Neville: Sure. I’m the founder and owner of VirtualStaff365. We help, we help small and medium size businesses get their time back by employing, recruiting, growing and retaining great virtual staff. And we have some other clients that don’t have a need for virtual staff but have a need for something a little bit more. It’s a corporate a little bit larger and that’s really trying to help in the BPO.
Derek: Yes fantastic. So you have an accounting background and you’ve had at least a couple of businesses before. You started your outsourcing journey in 2009 and you know 2011 you came to the Philippines virtually I suppose and started on your Philippine outsourcing journey. And you know ago to do start VirtualStaff365.
Neville: I started VirtualStaff365 in April 2016.
Derek: Right, okay. And so there is that common progression we’ve seen with a lot of entrepreneurs and business people you know that that have a lot of ideas and are excited to start things that people can start their outsourcing journey by scratching or a niche. And get super excited hiring a lot of people because they see the opportunities there and then quite commonly moving into the outsourcing service provision space in Suncrest here another. So it’s good to have another comrade in that regard. Neville.
Neville: Yes and look I started with time with VAs in one of my own businesses in e-commerce and essentially I got out of this business at the end of 2015. After the Australian dollar dropped and various things happen to the e-commerce which had led me to get out of that business. And I was talking to my business partner and he said what are you going to do. And I said you know if I talked to my network here in Melbourne and I said to them who do you go to to do outsourcing they don’t have anyone they don’t have anyone to speak to. They wouldn’t know where to go. They’d probably go to Google and I picked up on that opportunity in total. Given I’ve been working with teams of other teams in the Philippines and in India and VAs. I can show people what I know and that’s what I’ve been doing.
Derek: Yeah and it’s it’s some super super valuable isn’t it? Because it’s just people need steppingstones to outsourcing, I think. At the current situation the way it is is that you know people have to rely on Google. And they’re making phone calls to the Philippines which is in their mind you know a foreign scary country they’re talking to foreign scary people and they know there’s such a huge knowledge gap because they don’t quite know what’s behind the website or behind the person or the phone call whether there’s like a sweatshop environment. And you know so I think people like yourself sitting in Melbourne, it really really adds a huge amount of validation to the whole outsourcing thing doesn’t it?
Derek: It gives people a lot of sense to take that next step.
Neville: Yeah it does and it makes a big difference for businesses that are apprehensive to know that there’s someone local that’ll understanding it. And that’s really the difference. I know a lot of people pick up the phone they’ll get through to someone in the Philippines and I won’t know who and their person’s role is to put bums on seats. And that won’t necessarily be able to work out if the job or the task or the role of this VA is really suitable. And I find from time to time probably at least once a week I’ll tell someone that they’re not ready for a VA or they don’t have the processes in place or they don’t have the time available for their VA. And that’s see that is very much part of my, my role being here in Melbourne but it’s also good for the industry because if we can ensure that 99 times out of 100 clients are successful people are successful it will be good for the whole industry.
Derek: Yeah that’s a win win for everyone is there because obviously their home company flourishes and you know is more successful but then also they hire more outsourcing staff it really is a win win, isn’t it? And because once these people start off a little bit anxious it is so important that their initial engagement and experiences are positive because if the people get a bit of a bad experience and I think they can so easily just can the whole the whole experience.
Neville: Well that’s right and if we can ensure success they’ll come back for more but if it doesn’t work with the first one. They’ll forever be tainted with a bad taste in the mouth and sack I tried it it didn’t work for me, without actually looking introspectively and saying well maybe I wasn’t actually ready. So it’s really important and I think we discussed this in the previous chat we had, really important to find the right candidates. The longest it’s taken me to find a suitable candidate here is five months.
Neville: And that was actually for a recruiter and the recruiter was very specific and everytime I spoke to him I said I’m not sure that I’m going to be able to find someone for you. And she kept on plugging away plugging away when we found the right person and about a week after she started she sent me a message she said it was worth the wait.
Derek: Because there’s always a bit potluck anyway isn’t it? You know like H.R. and hiring and employing is still you know regardless of where you are or what you’re doing it is still a bit potluck isn’t it?
Neville: Correct. You can make a mistake you can make a huge mistake with someone sitting right in front of you and you can employ them it can be all sorts of problems. So, the interesting thing in this case was the client was applying her Australian recruiting principles to her VA on about nine dollars 50 an hour.
Neville: And it was.
Derek: What the Australian equivalent cost for that kind of role?
Neville: Well it will be a recruiting industry. I think she’d be on about 60,000 a year.
Derek: About 20 dollars plus you’d have all of the employment overheads there wouldn’t we as well.
Neville: 60,000 more at 30 dollars an hour plus on costs, so yeah. Plus you’d have to provide them with a desk and a chair and when you’re a recruiter working in a coworking space that’s an extra six seven hundred dollars or 800 dollars if you’re in the city.
Derek: So it’s maybe you’re talking about 40 dollars compared to 9 dollars fifty. So, yeah which is 75 percent savings. Not bad not bad. So let’s talk about the evolution of outsourcing you you know your first introduction was 2009 which incidentally was the first time I started using a Indian bookkeeper and then similarly I moved over to the Philippines with my staffing in 2011 as well. So the same year. But can you tell me through your observations and experience how has outsourcing changed in that time.
Neville: Well I think if if we just think about it as a consumer back in a box I don’t know what 2005, 2006 once the internet really kicked off we were all getting phone calls from call centers in India. And that for me was the start of outsourcing just as a consumer and I went to India to get get myself a customer service agent in 2009 and he was absolutely fantastic. He was just amazing and I loved the experience. The problem I had wasn’t with him as I was saying the problem I had was with the agency that provided him and provided the services in that they weren’t 100 percent honest about how the relationship was working. Now that’s just one particular experience. I know lots of people that are having great experiences in India but it’s not in customer service. So what happened with us was we had this experience and all that really happened was we gave him an increase. He never received it and I said why haven’t you thanked me with something as simple as saying to someone you have that knowledge to increase I gave you and that’s all thank you. As a thank you actually says I’ve got it and he didn’t do that. When I questioned him he said all bonuses and increases for the first two years go to the agency they don’t come to me.
Derek: Yeah it just shows the sort of lack of sophistication of the agency doesn’t it? You know that kind of after short term gain as opposed to building strong relationships. I mean do you see that as a representation of the industry? And now what is it nine years later things that.
Neville: I could never say that because I only had one experience with one company. But what that did was it said to us the next time we get to take on someone else we’re going to go to the Philippines because we’re starting to hear things about the Philippines. So we moved across to the Philippines and that’s where things really took off for us and we ended up with tens of guys working for us in the Philippines that really helped us scale our business. The evolution for us I believe is indicative of the industry. I think customer service is now being done in the Philippines. I think the Philippines the evolution is that the Philippines has become the go to location for customer service and repetitive work. Now repetitive repetitive work doesn’t necessarily mean boring but you could have a lot of graphic design. You could have web development being done in the Philippines but I see a lot of customer service and a lot of call center work happening in the Philippines. A lot of voice and telephony because they’re pretty good at English. And I say pretty because the comparison is the experience I had from about 2005 with these call centers coming through from India. Which did the whole industry a disservice. But it actually really helped the Philippines. What I’m seeing now is I’m saying India is still the go to place for software development.
Derek: Right Currently out there from all kinds of tech oirientated aren’t they? Kind of geared up to development jobs and things like that. But again it’s just super important that I think that you find the ones with sufficient infrastructure and competency within project management. Otherwise it can end up being a bit blindly leading a blind kind of I find.
Neville: Yes. You do hear about horror stories but I think those horror stories. I think that can happen anywhere. Generally what I’m seeing when we talk about the evolution if you say to me where do I go for software development possibly that’s India or Ukraine Eastern Europe states the Soviet bloc states they’re very big in software development Ukraine, Belarus, Hungary. I’m seeing a lot of that.
Derek: And it’s it’s amazing how this is evolving now isn’t it? Because we spoke previously about you know if you’re sitting in Sydney or Melbourne and previously your employment opportunities were within that town and within the borders and and even within two kilometre radius of your office in that town because everyone had to truck into the office. Whereas now when you expand your horizons and you look to the world there’s really a smorgasbord out there isn’t. And as you say by people go to Eastern Europe now for developers they’ve got India for web management and CS, customer support and Philippines is very much about voice and personality and customer support. And you know immediately you’re going from kind of a catchment of maybe half a million people up to maybe a catchment of about half a billion people.
Neville: Well that’s well that’s right and what I’m starting to see my small little pocket of work is we are starting to see work shift as well to South Africa. And that for me is really exciting first because I come from South Africa but I’ve never really worked there other than doing my articles with Price water house which finished in 93 and I came to Australia in 94. I don’t really have a working career in South Africa. But what I’m actually seeing happen in South Africa is because English is a first language and because the education system is very similar to Australia in terms of it being part of the British Commonwealth starting to see a lot of work that we’re doing we’re starting to shift over to South Africa because the quality of the work coming out of South Africa can be so much better. Now, there are certain call centres operating in South Africa like … Foxtail those, that’s customer service call center work and it certainly would be more expensive than in the Philippines. What I’m also starting to see and I think we’re going to see a big shift in in the next five years is digital marketing because it’s split now. South Africa is eight hours behind during daylight saving it’s nine hours behind. So to run a slow call center in South Africa for Australia’s really really hard. We’ve got practical experience with that. It’s been very difficult for us but we’ve been doing it mixed success because the guys have to come to work at 1 a.m. in the morning. It’s easier in fact if we just go back to the Philippines when they work for the USA which is the biggest employer of people in the outsourcing industry in Manila. They start work at about 10:00 11:00 p.m. at night. It’s much easier to go to work at 10 or 11 p.m. at night than to have to be in work at 1:00 a.m. in the morning.
Derek: And it’s so ingrained in the culture now and I think people come over here and just amazed at you know you can go to Eastwood in Manila and the places you literally alive at 4:00 a.m. in the morning just because most of the people are halfway through their shift. And.
Derek: Such a culture of kind of a 24/7 shift cover mentality and a lot of that as you say is because the initial outsourcing sort of nascent beginning with the U.S. which which is just crazy times isn’t it. And there’s now an entire industry an entire sector just built on the the normalcy of people working around the clock. And I think also when I first actually came over to the Philippines I did that because I needed a 24/7 cover. And you know that’s just unheard of because I worked in the hotel hospitality sector. And that is just unheard of in the UK that you could really have a team working around the clock whereas it is so much more normalized and so much and obviously so much then more affordable when you come to places such as the Philippines where it is just you know as common if not more common than a normal 9 to 5.
Neville: Well I think it’s it’s considered to be quite a sought after career these days in the Philippines to be working in and in a BPO.
Derek: Yeah absolutely. And even call center you know because you don’t get any call center professionals in the UK they are pretty much transitional students doing it until whatever they get a real job in inverted commerce where you actually get people dedicated to the call center profession here. So you get a higher professionalism and people take it far more seriously.
Neville: Yes. So Derek what we’re now seeing, we are now seeing roles that can be done work it can be done outside of traditional working hours. I’m seeing that going to places like South Africa and I think we’re going to see that trend is going to be even more so. So just I’ll tell you a few things about South Africa. They’ve got a very good education system very high unemployment. The South African Rand is at around 10 somewhere between 10 and 11 Rands to one dollar. When I came to Australia I think I’ll go to I think I’ve got a dollar for 2 and 17 and it’s now for 10 Rand fifty. So the cost of wages in relative terms is coming down and it’s not at the same low level as the Philippines but it’s still attractive. So you can get people to do things like blog writing, PPC, digital marketing, social media. All of that can be done in South Africa for roughly 30 to 50 percent of what it’s costing people in Australia. And it can be done with your eyes closed because you can find staff you can find guys freelancers that are really really good at what they do. They don’t need instructions. Whereas my experience of the Philippines is it’s hard to find those, those resources.
Derek: Yeah and things are slightly more process oriented here and they follow a standard operating procedure.
Neville: That’s right.
Derek: Kind of map out the stages. Yeah it’s fascinating isn’t it. So do you see you see quite a bright future in outsourcing in South Africa then?
Neville: Well I see a bright future for outsourcing everywhere because I think as the world gets smaller there just new opportunities springing up in new places. You know in terms of my business are not essentially country agnostic. It’s more about where I can find good quality candidates and resources for my clients. So if a client comes to me and says to me Neville, we want to do something. And I don’t think I can give my client a good result in the Philippines. And I think I can get them a better result in South Africa and I’ve got the ability to source the resources there. I’ll do that. I’ve recently just had a conversation with a business in South Africa that’s got excess capacity in terms of office space and they are saying to me Neville, we will be your BPO, we will build this for you. We’ve got the resources. You know that might be where things go, I don’t really know. But I think what’s going to happen is overtime a business can be based anywhere and it can be run by anyone as long as there’s direction. So if there’s someone in Melbourne that wants to start a business and it doesn’t have to be physical or the physicality of it either is a small component you can have people doing work everywhere whether it’s in the US or the UK. Or it’s in Russia or it’s in the Philippines, it doesn’t really matter where they are. I think I think over time we are going to see these various regions are going to become far more highly specialized than what they are today.
Derek: I agree. I agree. It’s kind of a network effect isn’t it like you know you go to Silicon Valley and you get programmers you probably wouldn’t get very good. I don’t know like customer support in Silicon Valley. So you kind of pick and choose your areas for their specialisms don’t you.
Neville: That’s right.
Derek: And it gets more of that smorgasbord as you say. And so it’s people such as yourself that’s important to connect the dots and curate a, you know like an outcuts of people that aren’t too orientated as you.
Neville: Yeah I’ll take a little bit further if someone generally people don’t come to me for innovation. They come to me to find them people to save them time to get their work done well to get things done that they just can’t get to at the moment or to give their team additional resources to get their work done. But if someone came to me and said Neville we want innovation. We can’t find the right people here where can we go for innovation. Quite simple. You’d go to Israel. It’s the number one innovation country in the world hands down.
Derek: Yeah I agree. I agree
Neville: But it doesn’t mean that the coding and the software that comes out of Israel is actually written in Israel. They outsourced it to Eastern Europe.
Neville: Why should they waste their time doing coding when they can do more highly valuable or provide greater input into the software that’s being written. They get the actual code done elsewhere. And this is a generalization. And in my understanding, there’s a lot of code for the Israeli startup industries down in Eastern Europe maybe you wanna know where Google and Apple and Intel are getting their innovation from.They’ve outsourced it to Israel. So there are different pockets around the world that will become known for different specialties in outsourcing.
Derek: Yeah. Yeah it’s fascinating isn’t it. And it’s only just beginning really isn’t it. People I think are finding their specialisms now they’re finding you know their strengths and then it’s because of that local network effect it’s really building on those strengths. And as you say I think it will become quite siloed won’t it and places will become known for specialization. Where do you see. I suppose in the future of outsourcing there’s a bit of concern in the Philippines at the moment that things like artificial intelligence and kind of automation will reduce a lot of the outsourcing roles. And also the outsourcing bodies are calling the industry almost what they are calling a sunset industry because a lot of the big players that can outsource are already outsourcing you know where’s my argument is that actually the growth is and should be in the SME sector where all you know on the very few that are already engaged. What are your thoughts in terms of the upskilling of outsourcing. The impact of artificial intelligence and the general direction that it’s heading in the next 10 years.
Neville: I have absolutely no idea no idea because if you’d said to me five years ago what would I be doing now or 10 years ago what would I be doing now. I could never have imagined that I could never have imagined when I was at University studying that I would be in the outsourcing industry sending work to different countries and helping my clients find more time. Time wasn’t a scarce resource back in the back in the late 1980s because I’m an old guy. So, I have no idea what’s going to happen in the years to come but I do know this. Increasingly it’s becoming more and more expensive to find the right people in Australia. It just is, everything gets more expensive and people don’t want to work. So for the foreseeable future I see outsourcing as having certainly the amount of work that’s going to be outsourced from Australia I think is just going to grow. And I think current or existing businesses they have to consider whether or not they want to outsource. I think new startup businesses growth businesses businesses that are going to start onto two or three or four years time they’re not going to have to decide if they’re going to outsource or not. It’s a fait accompli. They’re gonna be outsourcing.. It’s just a matter of when they outsource to and what work they get other people to do for them.
Derek: And the process outsourcing how they engage with it. It is fascinating, that isn’t it? I’m trying to obviously, I advise SMEs and I’m trying to encourage even startups and people not even yet in business to consider outsourcing because you know it’s not. Let’s wait until I’ve got five people and then begin outsourcing. It’s figure out how to outsource and build your company build the foundations from that base because it just it adds rocket fuel right from the start.
Neville: Well that’s right. And it does come down to having processes and being consistent in what it is you want to do. And the good businesses are the businesses that automate. You know if you can automate things and automate doesn’t necessarily mean robots. It doesn’t it certainly not having people. But if you can automate and process drive processes within your business that every time someone contacts you. This is what happens. This is what you do. Three days later this is what you do. Sure you can use automation software to do it for you. Someone’s going to drive that automation software.
Derek: Yeah, yeah.
Neville: I, you know. I don’t, well outsourcing in the Philippines where someone wants to see it as a sunset industry. I said. I’m not sure I think maybe they’re just looking at the opportunity within the large corporates that already there, you know Telstra is not going to grow massively.
Derek: I agree, I agree, that sunset within the big end of the market because it’s you know it’s already saturated that SME space is only growing. And also I think there’s a lot of innate protection from automation in the SME market because by then nature is very quickly evolving. They’re pivoting a lot. They’re kind of frenetic little companies and it requires a lot of generalized skills and applications. So you just inherently don’t get as much what you get as much. You don’t get as much processes and you don’t get as much standardization of tasks which can be replaced by automation. So I think there’s a lot of protection there within the SME market and certainly you know I think it can be the big conglomerates that test out AI and automation for the next kind of 10 15 years. They can refine it and then SMEs will be able to pick up on that as a kind of secondary market and really benefit from that. But certainly because of the kind of frenetic activity of SMEs it’s likely not to be adopted quite so early.
Neville: Time will tell Derek we’ll have to wait and see.
Derek: And it’s exciting though isn’t it. It’s certainly an exciting.industry.
Neville: It’s exciting, it’s a very interesting it’s a very interesting industry to be a part of and it’s very interesting to watch what what’s going on within the industry. And you know we were also part of that both you and t. So we’ll also drive where it goes in the future as well.
Derek: Absolutely. And I mean it’s it’s great to have you on the podcast because I think that it is that you know it’s a rising tide and I think we can all benefit. So there’s no sort of sense of competition. I think we all just need to cooperate to encourage as many business owners into this thing called outsourcing.
Neville: Quite right, quite right and not every outsourcing provider is suited to every business. So while I might not be able to help one person and there’s always someone else that can.
Derek: Absolutely. yeah it’s because these things you know are trying to help people and outsourcing partnership really is a partnership isn’t it. More so than a lot of other kind of contractual providers because they’re really sitting side by side with their staffing and you or your human resource so it’s really a much bigger partnership than many others you would get in business.
Neville: Well well it is, you’re essentially a business as H.R. department and that’s a lot of that that is how we see ourselves when it comes to our virtual staff that are working for our clients. So we do have to work closely together and we do have to know if there’s anything critical goin on in the business or at least the staff have to know and they have to be educated. And it’s a challenge. We every time we try and do better.
Derek: Absolutely not. It’s a very very valuable service you offer. Thank you so much. It’s been a huge insight. And if people want to get in touch with you. How can they do that.
Neville: Look. Phone calls are always the best. I like chatting so where they know I want to pick up the phone and give me a call my number 0402116606 but my website is www.virtualstaff365.com.au/. Oh they can just pop me an email www.virtualstaff365.com.au/
Derek: Fantastic. And that’s an Australian number obviously and we will put all of the contact details in the show notes. Thank you so much Neville. And we look forward to chatting again.
Neville: Great thanks Derek. Thanks listeners. It’s been a pleasure.
Okay. That was Neville Samuels. I hope you enjoyed that. He is from VirtualStaff365. if you want to get in touch with Neville or want to know anything about this episode then go to our website at outsourceaccelerator.com/125. And as always if you want to get in touch with us or ask us anything then just drop us and you know to [email protected] See you next time.