Navigating Offshore Staffing & AI with Rodney Frost of IntegratedOS

Rodney Frost, CEO of IntegratedOS, guests on the Outsource Accelerator Podcast to share how the offshore staffing landscape — and his own model — is being reshaped by AI, rising onshore costs, and the rise of risky low-touch employment structures.

With 20 years of experience building dedicated teams in the Philippines, Rodney laid out where the industry is heading and where buyers should be careful.

IntegratedOS

Australian-headquartered IntegratedOS delivers dedicated offshore staffing in the Philippines to roughly 60 partners. Client teams range from individual contractors up to groups of 50, with their largest global partner scaling to 27,000 people.

Founded in 2006 to solve Rodney’s own staffing problem in print and manufacturing, the firm now employs around 420 people across IT, engineering, marketing, finance and admin functions.

“I’ve been in the print and manufacturing sector since I left school in the late ’90s. 2006, our print manufacturing business needed some IT development, and I decided to look overseas for the resources that I needed.

Ended up setting up a business with a lady named Grace Montero in the Philippines… we’re at 400 and 420-odd people across 60-odd different partners servicing Australia and New Zealand primarily and slowly broadening into Europe and the US.”

How the industry changed from data entry to technical roles

Rodney has seen the Philippines transform from a data-processing and call-centre destination into a technical-talent hub. Recalling his first visit in 2006:

“It was a lot of data processing, a lot of call centers, a lot of very basic tasks, not a lot of technical tasks. If you imagine if that was now and AI came in, well, it would’ve been an industry that was severely under threat.

But over the years, those things still exist. A lot of automation has probably covered off on a lot of the data processing things.”

IntegratedOS now focuses on what Rodney calls “people with AI roles” or technical positions where AI is a tool rather than a replacement.

“We’re focusing on those people with AI roles where AI becomes a really good tool for them to use. So you’ve got a resource that is a far more competitive cost to the local market, utilizing the same tools.

Our average age on the 420-odd people is still under 27 years of age, so they’ve all grown up with phones in their hands and different devices. They’re very quick with using these tools.”

Building AI adoption into the quarterly cadence

Rodney has institutionalised AI conversations inside IntegratedOS through a structured quarterly meeting agenda.

“A part of the agenda now is AI adoption, and it’s built by two parts. What are you doing today with AI as one part — a bit of an explanation as to how they’re utilizing AI in the tech stack we’ve got, including what’s new that we’re not using within that tech stack.

And then the second one is: what do you wish you could use AI for?”

The second question matters as much as the first, he said. The team brainstorms unmet automation opportunities every quarter — for the company, for clients, and for the team’s own day-to-day.

“We’re going back to old school brainstorming… every team member’s got input into what do you wish you could automate that we can’t?

Or what can AI do for us, and more importantly, do for our customers and people we partner with? As well as what can AI do for our team members?”

Why the EOR model is the industry’s biggest risk right now

Rodney was unusually direct about a model he sees gaining traction at the expense of quality.

Rodney on Employer-of-Record providers:

“I’m seeing that the risk to the industry at the moment is these EOR companies, these employer of records. I know of at least half a dozen where they don’t even have ownership in the Philippines. They live in Singapore. They fly over, they set up an entity, they handle the recruitment part, the team member’s sitting at home.

Unfortunately, the infrastructure in the Philippines isn’t as good as what some people expect, so they may not have internet, they may not have power. Sometimes they may even get sucked into trying to work two jobs on two different machines.”

The pitch is low cost, but the structural exposure goes well beyond money.

“The EOR is no care and no responsibility, and someone gets sucked into them because the cost is low.

And it has potential in the future to give models that have offices and have infrastructure a bad name because they look good and they look cheap, but they actually don’t deliver, and they’re very risky.”

What IntegratedOS actually sells — Trust, not staff

Rodney reframed the offshore staffing pitch entirely as a trust transaction.

“A lot of people think that we’re selling dedicated teams over in the Philippines, but we’re actually selling trust.

They need to know that they can trust a critical part of their business, core part of their business, to be done overseas. You’re building trust with them, and they’re placing their faith in you by setting up their teams with you.”

That framing shapes the company’s commercial model. IntegratedOS caps its net profit at 10% and currently operates at around 3%, with full visibility for clients.

“A part of that which does make us different — we actually cap our NPAT at 10%. So our profit is capped, and that is transparent for anyone to talk to me at any time. We log into Xero and have a look. There’s no smoke and mirrors, no rubbish that goes across any of our financials.

It just allows us to sit underneath any of the companies that are owned by private equity, et cetera, and make sure that we’re uber competitive.”

Why going to the Philippines closes deals

Rodney said one experience converts virtually every prospect — walking into the office in person.

“I don’t think I can tell anyone that’s ever been to our site in the Philippines, met our team, been through our process — 100% of them have set up teams with us. We haven’t had one company or person go there and not proceed. If anyone’s ever on the edge or they’re listening at the moment and they’re not sure, I’d urge you to try and narrow down, utilize OA.

Narrow yourself down to two or three people and go over there, fly, meet, actually see the sites, meet the people, and I’m sure you’ll be comfortable by the time you get on the plane and fly back.”

The physical office is also, in Rodney’s view, the dividing line between a real offshore operation and the EOR alternative. This is particularly true for a workforce with an average age under 27.

“You can’t have a team when you’re sitting at home. The stuff you learn around the water cooler and how you learn from each other… you don’t get 98% retention like we’ve got without having happy people.

And a part of that is — activities we’re able to have, like we have weekly badminton and all that sort of stuff. That all comes from getting the guys into the office and being a part of something, not just sitting at home being lonely and doing their work and waiting to feed their dog at night.”

To learn more about IntegratedOS, visit integratedos.com or connect with Rodney Frost on LinkedIn, where he’s happy to help anyone exploring offshore staffing, even prospects who aren’t considering IntegratedOS.

If you’d like to learn more about what we do in the outsourcing space, send us an email at ask@outsourceaccelerator.com.