How to outsource roles the right way
Last updated August 28, 2019
I was recently interviewed by Abdo Riani of StartupCircle.co. For those audiences in the startup community, this is a great episode. I want to encourage more and more startups to consider outsourcing for their early-stage high growth human resource needs.
Derek Gallimore: Welcome to the Outsource Accelerator podcast. This is a short format podcast where we explore business and outsourcing mastery. My name is Derek Gallimore and I am really excited to bring you the leading podcast in outsourcing.
Derek Gallimore: Hi and welcome to another episode of the Outsource Accelerator podcast. My name is Derek Gallimore and this is episode number 235. So today I am being interviewed by Abdo Riani of StartupCircle.co. This is a fantastic community website educational website and encourage you to go and check it at StartupCircle.co. I am interviewed by Abdo about surprise, surprise, outsourcing. And I really enjoyed my conversation here. I got a little bit carried away, maybe a little bit over enthusiastic, but that’s what I do when I’m sort of unleashed on the topic of outsourcing. Of course at those audience is the startup community and you know, this is a fantastic area. typically pretty, advanced people, techie people, younger people, so that potentially the earlier adopters of outsourcing. and I just want to encourage more and more startups to consider outsourcing for their, early stage high growth human resource needs. So anyway, without further ado, enjoy this episode. If you want any of the show notes or if you want to check out startup circle, then go to outsourceaccelerator.com/235 enjoy.
Abdo Riani: Hey founders, my name’s Abdo Riani. Thank you very much for joining another live session. I’m sorry I’m circling. If you miss this session, the next one starts on Monday. Join US below full of these structures and look forward to having you live answering your questions live and contributing to the success of your entrepreneurial journey. Our partner for the sessions, needles, needles, is a product that allows you to create, iterate and optimize Facebook ad campaigns automatically seamlessly. Thanks you. It’s AI powered innovative technology. Derek, thank you very much for being here.
Derek Gallimore: All right. Thanks so much for having me.
Abdo Riani: Thank you, Derek. I’m very excited for this session. You are the founder of Outsource Accelerator where you provide business owners, small business to medium size businesses as mentioned on website, on average 2,500 employees with all the needed tools, the resources and the education to leverage outsourcing to grow their businesses. Today we’re going to talk about how outsourcing can help your business grow and how to do it right. But first, Derek and the beginning of every conversation, we like to put things in context. So tell us about the journey that led you to building Outsource Accelerator and how it evolved over time.
Derek Gallimore: Yeah, absolutely. So as most people in outsourcing, I kind of fell into outsourcing as a result of using it for my, myself, my own business. So my prior business was a corporate housing business, based in central London. And very quickly I realized that I needed 24/7 customer service and bookings functions, and that was just not viable or accessible in the UK because of the cost. It was cost prohibitive. So a colleague of a business friend of mine, he suggested that I went to the Philippines to look for outsourcing. I did, that was in about 2011. I got my first fulltime staff member. We built a 24/7 office there. I grew that up to about 70 people sitting in Manila. and I then just had a smaller team of about 20 people in central London managing our 250 properties. So, it’s almost reversed the triangle where we had the bigger team and the bigger operations in the Philippines. then as of about 16, 2016, 17, I built Outsource Accelerator because, you know, outsourcing is a huge, incredible, tool and opportunity for businesses. But there’s no aggravator platform. There’s no way of people to find out about outsourcing with independent knowledge and advice and then also to connect with outsourcing suppliers. So that’s what we, that’s what we’re doing now.
Abdo Riani: So Derek, you mentioned, in on your side as I introed you said that, your target is those that are running businesses with 2,500 employees, more or less, right? Not, not necessarily 25, close or that range.
Derek Gallimore: We do, you know, we say sort of two to 2000 employees, like anywhere, anywhere along the spectrum really. But it’s not necessarily a, not necessarily a solidprenuer of any, any sort of small and medium size business.
Abdo Riani: So that was going to be my follow up question. Derek. When is it time for an entrepreneur solo or growing to start considering outsourcing? some tasks, some responsibilities.
Derek Gallimore: Yeah, absolutely. Look, I’m, one of the critical aspects to growing a business is, you know, you need human resources. you obviously need to be able to afford those human resources, but outsourcing allows you to, grow a team and get people working for your business and scanning your business, at a far more achievable, price and far more accessible and far earlier within the development cycle of your business. So, you know, in theory, I reckon your first employee should be an outsourced employee, because you’re looking at maybe, you know, 12 to $1,500 a month instead of the five or six grand a month. also if you’re an existing business then you know, you can start outsourcing right now. so it’s really a flexible model, but we certainly, you know, a large part of my education is to differentiate between the sort of the upward, the freelance of the Tim Ferriss kind of outsourcing, which really isn’t outsourcing. you know, there’s a lot of people that get disappointed, they invest a lot of time trying to find freelancers the relationships don’t work and they’re not really scalable. Out of freelancing is fine for certain projects. If you want to $5 logo, if you want the book edited or proofread. But for a scalable solution, scalable staffing solution, professionalized outsourcing is really the best option.
Abdo Riani: You obviously created a resource for this Outsource Accelerator kind of trains and finds the right people for you. You made sure that the bright people that you hire are the right people for the job. so without Outsource Accelerator, Derek, you recommend working with perhaps an agency or hiring a solo contractor and working with them directly.
Derek Gallimore: Sure. So we Outsource Accelerator isn’t an outsource of we don’t do outsourcing. We are really a broker, between the outsourcing suppliers in the Philippines with the businesses in the west. It’s a little bit like Alibaba connecting the Chinese manufacturers with the businesses in the west. So we represent about 630 outsourcing suppliers in the Philippines representing about 1.2 million jobs. so we can connect people to the right, they called BPOs, the right BPO for their needs. I definitely suggest that people go with a, a professionalized supplier typically they have maybe a hundred to 5,000 seats, you know, staff or employees already. And then they add your account and your needs to that and they are very experienced at running, setting up and building and supporting teams that you want to build. Yeah. So
Abdo Riani: Derek, before we get into the specifics, the specifics of, of contacting the right person, managing the right person, making sure that they’re delivering the work on time. tell me about the type of work that the outsource teams can do for your business.
Derek Gallimore: Yes. So, I really want people to think about sourcing like employment. Okay. So instead of hiring your next person that sits next to you, wherever you are, it is identical. So you treat the role, the training, the relationship the same except they’re sitting in another room in another country that’s as simple as that. What roles can be done is literally anything in front of a computer. 20 years ago that was less, now it’s virtually 99% of jobs. if you’re out there and you’re a plumber or a builder, there is still vast amounts of your company that can be managed remotely and probably far better than you can do or a local team that you have around you and just some rather extreme examples. Some of our partner Bpos, they have a trained, well, I don’t know what they call it, even qualified naval captains, navigating, oil tankers in the open sea from an office in Manila, Philippines.
Derek Gallimore: And we also have partners that are, analyzing and optimizing satellite dishes over Denmark for the telecommunications suppliers. And they’re tweaking them by half a degree so that it optimizes the mobile signal. They are doing that from Manila, Philippines. Equally, websites are being built. you know, social media is being managed, bookkeeping as being done. It’s any literally any almost any function in business now. Interesting.
Abdo Riani: Interesting. Yeah. Let’s start with the first step. If I am a business owner and looking to hire someone, I know this specific role for the position, I know that tasks that this person needs to do on a daily or a weekly basis. what do I do next? So, you know, Outsource Accelerator, you mentioned earlier how going through a broker or a professional team can help you minimize risks, can help accomplish so many calls but haven’t reached the right person. Do we do the training first? Do we, do we do a test perhaps a projects? How do we make sure that we’re on the same pain from the light show?
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Derek Gallimore: So, so, okay. The outsourcing suppliers, which are, which, you know, we will call BPOs, it’s really about finding a BPO that you gel with. Well, okay. They will be a very close business partner of yours for many years to come. Potentially. Once you set long BPO, then they, you will specify what roles and pretty much provide them with a job spec for those different roles. They will then go out and shortlist candidates for you. You will then do whatever you want with them. You can do final interviews, you can test them, you can whatever your standard or preferred, screening processes for any employee. When you find the personal people that you’re comfortable with, you within on all of them.
Derek Gallimore: and you know, this is where I think people sort of slightly expect everything to be outsourced. It’s requires investment from you as the employer to onboard them, train them, let them know of your processes. If you haven’t matched your processes, you need to map your processes, but also critically you need to onboard them with your culture and your mission. You know, so that these, you know, I say everything is done in front of the computer screen, but they aren’t a computer. On the other side of the monitor is a human and you’ve got to get them on board with your mission. so people almost sort of forget them without sourcing. and it’s a critical part of, of building a team. But really, as I said, it’s not really any different to a hiring or recruiting locally.
Abdo Riani: And that’s I was going to mention like you mentioned earlier, it’s as if someone is sitting on another in another room in another contrary and everything else stays the same. That location is just the same.
Derek Gallimore: yeah, absolutely.
Abdo Riani: And Derek, I’ve worked with many outsource teams in the past. Sometimes, you know, perhaps quality is not at its best at some point in time, although in the beginning you might start great but things happen later and the quality is not maintained. How do we make sure that, that, that things are moving in the right direction? Obviously communication and the culture, like you mentioned right now are very important, but are there any strategies or tools or methods that you have employed to make sure that people are working as expected?
Derek Gallimore: Yeah, absolutely. Look, I think there’s, I, you know, this, Tim Ferriss did amazing things for outsourcing, but I think people are maybe steering a little bit too towards it the cheap end. A lot of people do part time, VA outsourcing. A lot of people do work from home. and a lot of people do project based stuff. Those things fundamentally kind of a less effective than a fulltime strategy. And this is equally comparable to if you hired someone in the US or UK, if you’ve got them part time working from their sofa, you’re probably not going to get the kind of top quality output. Now if you put, well if you recruit within a professionalized services from like a BPO, then you know, you’re setting yourself up to succeed and also that team member to succeed equally if and when things go incredibly well, when you scale, you bring more people into that office so that they form their own culture. You know, forming an organization within this, within this BPO that is, is you and your operation. so as momentum gathers then you know, you’re building a company culture and you’re building momentum with that team. Now of course teams can fall apart. You know, you can get sort of, bad employees, you know, it is a bit like kissing frogs and that really is, is no different to managing a team onshore, offshore or you know, even, sort of in another town from you.
Abdo Riani: So I understand the importance or the advantage of hiring someone full time, Derek. But what if you’re hiring one person and this person is perhaps working from home at the end of the day. It’s the same thing as you were hiring someone part time and they’re working from home and they can slack off if they want to. You can open an office just for one person. I’m also understanding now why you prefer working with the teams that are, have with companies with 2000 to 2,500 employees because you can take over everything and help them manage a big team in Manila. what about those who are hiring, you know, one to three people and don’t necessarily need an office for it and working out work hour day
Derek Gallimore: Look, we, I understand there is there is, every sort of scale of business. I think if you ask most entrepreneurs, most start ups, most business people, you know, 10 years from now, do you want to be hustling in your bedroom with one and a half part time VA’s or do you want to full time team? I think most people would say, look, I kind of want to build a full time team. I understand that, you know, revenues only allow for what makes an allow for. but you know, you aren’t, I think you want to structure things that have, a scalability and sustainability. Now I’m work with clients that have one employee. You know, I don’t necessarily just work with the big guys, but we would recommend that you put in, so you don’t need to build an office and this is what the BPOs provide.
Derek Gallimore: the BPO is if you think of them as kind of like a, we work office, it’s an environment where everyone comes in, they know they need to turn up nine to five or whatever their hours are. they have a great facilities. I have proper hardware, property, computers, profit, Internet, and they have HR, they’d come and contributions are paid for and these are professional people. Okay. And so immediately you’re going to get a better result than hiring a 20 year old that doesn’t have the distance that’s sitting on a sofa. And also, you know, you as a client, they probably have five other people that are juggling as a client as well. And if you’re paying 10 bucks an hour or whatever, three bucks an hour, they’re going to jump across to the $5 an hour person, as soon as they get one off upwork.
Derek Gallimore: So there are sort of slightly cheaper ways of doing it, but you know, for about a thousand dollars a month, not $500 a month, you will get an incredible scalable, professionalized service. and, and that is the differentiator.
Abdo Riani: and Derek, one of the things I asked was tools. Do you, do you recommend any tools or do you just recommend the employer to implement or use some tools like project management tools like, like Trello or hour tracking for whatever it is to make sure that everyone’s on the same page on a daily basis?
Derek Gallimore: Yeah, absolutely. you know, it really is up to the, the employee, the person and the tools that they already use. If we’re talking about the smaller end of business, the startups, what you find is that founders, especially high growth environments, founders, they struggle with the process and growth themselves.
Derek Gallimore: they might also come like come to the Philippines and in hiring in the Philippines thinking that this is a developing nation and they’re all over it, but then they come to the Philippines. They have been specializing in outsourcing and process optimization for the last 25 years and realized that actually this incredible sophistication in the country, and it’s all about process mapping. It’s all about, managing, measuring inputs and outputs, monitoring KPIs and an incredible levels of, sort of optimization, efficiency and precision. So, you know, and these are things managing people alone is a skill that new employers, you know, it’s a big thing and I’ve been managing people for 20 years and I’m still reading management books and I’m still learning how to do it, you know, so it’s certainly a, process and also managing people remotely is, is a different process and managing people remotely in a slightly different culture is also a different process.
Derek Gallimore: So these are all subtleties and nuances. We’re getting back to your point, the tools, all of the standard ones, you know, whatever you’re used to Trello or Asana, you know, Slack. but what I find is the simpler tools are best, but effectively whatever tool you maintain is the best tool because there are some fancy, amazing tools out there, but they never get updated and those don’t work.
Abdo Riani: Yeah. Look, Derek, as you mentioned, you’ve acquired so much knowledge and experience over the years managing in house and outsource team. So tell us about the difference. What have you learned, is different between doing both and what have you learned, is effective in managing outsource teams.
Derek Gallimore: Joe Show? look, there are cultural nuances that you have to be aware of. the, the Philippines likes to be managed. I mean it’s, it’s hard to generalize, but they like more clear processes.
Derek Gallimore: there’s, you know, a massive kind of, there is a growing startup culture in the Philippines, but they don’t like much the, the kind of everyone fence for themselves, no sort of clear direction. and we’ll just figure it out as we go. They actually prefer to be more diligent, more process oriented, which is both a good thing and a bad thing. Millennials will, if they’re given a spreadsheet and they have to work through figures, they’ll probably quit within a day in the US. Whereas in the Philippines, that is, that’s awesome work. You know, people, people are quite diligent and quite, detailed and process oriented. you know, and so there are cultural differences. You just have to really, get used to them. But even, you know, as you start to grow a business, you will notice there, you know, regardless of where people are sending whatever country they’re in, you have to manage introverts differently to extroverts.
Derek Gallimore: You have to manage Germany, accountants differently to creatives. You have to manage the coders and developers different to all of those people. so, you know, again, I’ve been outsourcing now for 10 years and I’m still learning, but it’s a, it’s an iterative process.
Abdo Riani: And one of the things I learned right now, Derek, is that the culture of the company in the country is very, very important. And is there a reason why you picked the Philippines?
Derek Gallimore: Yeah, absolutely. so the Philippines is, I believe, I, I’m branding as the Swiss banking of outsourcing. it has been outsourcing the longest, alongside India. It is smaller, a smaller industry than India. Philippines employs about 1.2 million people in outsourcing and the India is about three times that size, but the Philippines was a conquered for better or worse about 500 years ago by the Spanish.
Derek Gallimore: At that point, Catholicism was introduced, which meant that again, for better or worse, they are very culturally aligned with western values and beliefs, which really can’t be understated. They were then concrete again, if the better or worse by the Americans, you know, about 60, 70 years ago, which introduced the better or worse, pizza, NBA, youtube, Netflix, and these kids are growing up on a diet of, of America. you know, and the millennials now they are teaching themselves via Youtube, via the code camps, via at y Combinator, online resource, via the mood. so you’re really getting huge, homogeneity, within the societies. If you walk down streets in the Philippines, there is no local language. again, for better or worse, all of the streets times are in English, the taxi drivers speaking English. you know, and you’ve got all of the brand names down the street.
Derek Gallimore: So that is why, the Philippines I believe is by far the best. not only has it been doing it the longest, it has 25 years of executive experience in outsourcing. but also it is the most culturally aligned to country in the world. Plus, I might also add, there’s sick while there’s 110 million people living in the country, it is the third largest English speaking country in the world. a third of the population are under 20 years of age. It’s just super young population. There are 650,000 university graduates every year. And those graduates as they come out of college with the college degree are expecting about $400 you asked per month. Okay. So, so that is why I choose the Philippines as being the, the outsourcing, capital of the world
Abdo Riani: and, and look, Derek, that is what they expect. You know, it’s not like that’s what’s available is what they expect. In other words, if you, if you offer them, you know, 600 or a thousand dollars, you not necessarily undervaluing their skills, you’re, you’re paying for what they have expected in the first place.
Derek Gallimore: I mean it was like any job market. I mean, you know, to put it in perspective, the, I’m just, I’ve got to do my fingers right yet, but, you know, a nurse, a qualified nurse working in the hospitals will get about 200 US per month. So a graduate working in a fancy Google looking office that’s about 22, 23 years of age will earn about $400 a month working at funky office, have a super cool career path, have trainers, you know, and it’s sold a bit like we work. and they will have, they will earn four to $500 a month and they will be super, super happy. You know, of course like any job market, you know, coders, senior managers, experienced people, salesforce developers, what have is in need. They, they get paid more and more and more, but you know, you’re really looking at senior managers would may get paid 1500 US per month. so, you know, there’s, there’s significant, generally face value is about a 80 to 90% cost saving to the sort of major centers of the West.
Abdo Riani: Derek, many of our listeners are software startup founders, digital product and digital, service providers and many also are coaches and consultants. So for this group, it can be obviously divided into three sub subgroups. How have you seen outsourcing help their companies grow? And if you’d like to use one of your clients or one of your users as a case study, don’t have to mention names would be great.
Derek Gallimore: Yeah. Yeah. So, digital is, is huge and you know, if you’re trying to sell, I don’t know, bathroom furniture, it’s harder because, there’s a cultural awareness that people need. Whereas digital marketing, digital services, it, there’s actually no cultural sort of friction. people, as I said, the millennials in the Philippines or growing up on exactly the same diet, you know, how to build a website, SEO, SEM, paid traffic and things like that. So you can get a very, very effective workforce in the Philippines for that. the Filipinos, they are maybe not as mathematical, maybe not as strong in some of the hardcore coding and mathematics and analytics as maybe eastern Europe or India. But generally they are, they’re far better generalists and then the language and cultural sort of assimilation and makes up for those gaps. they are very, very strong in creative.
Derek Gallimore: Okay. So a lot of the Hollywood post editing, a lot of the CGI, a lot of the marvel movies now are being all created or post edited in the Philippines. A lot of the animation movies now, all of the Hollywood or whatever they called, Disney ones are all being completely made in the Philippines. The Philippines is very good at CAD. so what I’m saying is for the digital, for the more creative aspects of, digital businesses, building websites, you know, basic kind of, UI, fullstack, wordpress kind of simplest staff, the funnels, all of that is well within, what I, what I do see a lot is, you know, again, the sort of the, the, the hustlers, they’d probably get five hours from a guy in here, then they go to eastern Europe for eight hours there and you know, we find there’s a lot better, sort of sustainability and longterm results if they just kind of stick to one spot and, you know, build a team. So actually, you know, as, as one, I do have a client just now in essentially actually just flowing into Manila is a, a web guy and he earns about sort of five to 10 websites, earns a reasonable money. and he is exactly that. Like he’s got about eight to 10 people around the world. There’s one dude and eastern Europe, there’s one guy in South Africa. And, and what that creates is he is the hub and then everyone else, just the spokes and everyone goes through him.
Derek Gallimore: He is the bottleneck for getting everything signed off. If one person leaves and he’s got a recruit, replace train and you know, I said to him, look, centralize everything in the Philippines, get them turning up to the office at nine in the morning. They all meet around the water cooler and maybe they start dating each other. Usual kind of workplace stuff. If someone leaves, the senior person starts to recruit, he can have final say, but then the senior person on boards, them tells them about the culture. Of course they learned the culture because they’re all sitting in the same office. you know, and this is where, the, the founder starts to be able to relieve themselves of being that hub. and they have a hierarchy or structure in place that is the beginnings of a scalable solution.
Abdo Riani: Yeah. Perfect. One last question, Derek. the time difference with the Philippines, at least here in the US or in the and more specifically the west coast is unbelievable. And half a day. So how, how have you learned, that people could deal with this time difference?
Derek Gallimore: Sure. So just a set expectations right from the beginning of the Philippines, outsourcing industry was built with the US now it’s expanded to other countries. So the industry was born out of night shift working in the Philippines. If you walk around, excuse me, seven, corners, certain pots of Manila, at three or 4:00 AM that’s basically they had lunchtime. The streets are bustling with people. it’s like rush hour and that is three or 4:00 AM no one’s drinking of course, cause they going back to work in a few minutes. the whole outsourcing economy is built around US hours. It’s becoming less so in the last five, 10 years. but you asked someone to work night shift, and that is, that is so normalized and so common. that is not funny. You know, if, if your, it depends what you do, but if some jobs aren’t a time dependent, like you know, kind of whatever hot in her coding development creatives, then you know, you could maybe let them work Monday to Friday or have crossover shifts. but people are completely open to US hours and also, you know, very commonly, 24/7 shift cover is never viable in the US or anywhere else because of the costs and how completely attuned to it in the Philippines.
Abdo Riani: Well this is for this session. If you miss this live session, next one starts on Monday. Join US below. Look forward to having new life and answering your questions live. Derek, thank you very much for sharing. All those insights are vested in this.
Derek Gallimore: It’s been a pleasure. Thank you.
Derek Gallimore: Okay. That was me being interviewed by Abdo Riani of StartupsCircle.co as I said, if you want to check out Startup Circle, then just go to their website, which is at StartupsCircle.co and if you want any of the show notes, if you’re on any other links that we talk about the go to outsourceaccelerator.com/235 and as always, if you want to ask us anything and then just drops an email to [email protected] see you next time.