Outsourcing in the Philippines
Last updated November 21, 2019
Business Growth Time podcast
Today I am being interviewed by Janet Johnson of the Business Growth Time podcast. Janet asked me a range of questions that general business people really want to get their heads around.
So there’s value in having a listen to this while the tables are reversed, and I’m helping people with the concept of outsourcing.
I hope it provides value and I certainly enjoy getting out there and discussing the outsourcing which I’m very passionate about.
Terry Bean: Hey, it’s Terry Bean. We’re back with another fun episode of Business Growth Time. Today we’re joined by Derek Gallimore of Outsource Accelerator. We’re going to talk about outsourcing the Philippines.
But before we introduce Derek, let’s say hello to my good pal, longtime friend, the lovely the talented, the one and only Facebook Maven, Janet E. Johnson. How are you, Janet?
Janet Johnson: Good. What’s the “E” stands for today?
Terry Bean: Gonna stand for everything because that’s about all I can think of right now. It’s everything. Could stand for “entertainment” because of the meeting that I had last night maybe. Okay. I like that
Janet Johnson: Entertainment. Okay, we always have an E. So I’m like, wait, he skipped the E.
Terry Bean: Maybe we are out of practice. Holy cow.
Janet Johnson: We haven’t actually done the podcast interview. We batch so many at once that we did, like, eight in a row. And we were so ahead that we kind of took our summer off. So Derek, welcome. You are the first one we’ve interviewed here for about two months. So, we’re out of practice a little bit. So bear with us. Bear with us.
Derek Gallimore: Fantastic I’m excited to to be your first after a –
Janet Johnson: Little break, yeah. You know, summer’s tough when – I live in Minnesota, Terry’s in Michigan, so we only get this much summer. So we have to take advantage of it.
Derek Gallimore: You should.
Janet Johnson: Oh, awesome. Well, welcome, Derek. I appreciate you coming on. I love this topic. It’s such a topic for me – outsourcing the Philippines – because I have, like, I mentioned to you, I’ve been doing this for some time. My virtual assistant, my graphic designer, both in the Philippines. So I’m looking forward to talking about this
Derek Gallimore: Absolutely. Thank you so much for inviting me super excited, stoked.
Janet Johnson: I am, too. Definitely. Let me give you a proper intro and then I’m going to let you take it.
So, Derek, you are a serial entrepreneur who has experienced the fullest highs and lows of the entrepreneurial roller coaster. Yeah, Terry and I are with you. He has built multimillion-dollar property portfolios, bootstrapped a $20 million business and seen it all come tumbling down only to rebuild it again.
Derek has lived and worked in five countries and traveled through dozens more. He has embodied remote online and international work since 2008. Well, before the phrases were even coined. Derek has been outsourcing in the Philippines since 2011 and believes that outsourcing is one of the most potent and transformative business tools available today.
As a result, he founded Outsource Accelerator, which is the Alibaba of outsourcing, provided the gateway for businesses to connect with outsourcing suppliers. Like once again, welcome Derek. I’m super excited to talk about this topic.
Derek Gallimore: Absolutely. Thank you, Janet, and thank you, Terry, as well, for inviting me and I get really excited about this topic. So yeah, where would you like to start?
Outsourcing and employment
Janet Johnson: Well, how did you get into doing that in the first place? How did you go Oh, outsourcing in the Philippines?
Derek Gallimore: Well, I mean, one of my previous businesses was hospitality based in central London. And it occurred to me quite early on that we needed 24/7 customer support, sales support, and it just clearly wasn’t available in London, it’s too expensive. No one wants to work 24 hours anymore or overnight.
So a business friend of mine suggested I went to the Philippines, not physically, but just looked for staffing in the Philippines. And very quickly, I realised that this was a good source for staffing.
I got my first staff member there within a month or six weeks of looking. That was in 2011. And between then and about 2016, I’d built the Manila office, up to about 70 or 80 people then to basically run the back-end, but then it worked up the value ladder.
And we did everything there from marketing to sales to management to HR business strategy. Really climbed the value ladder. And we basically then ran eventually our London company, mostly from Manila, Philippines. That was the start.
Janet Johnson: Wow. Wow. Very interesting. So how does your company work? I mean, I’m curious about that because, as I said, I’ve done found the Philippines and I recommend how to find the Philippines. But there are two questions with this.
And then I have found some Philippine workers can be just tremendous. And others – I’ve had some ones that have worked for me for over a year and they just disappear off the face of the earth. You probably heard of that. So if you want to touch on those points, too.
Derek Gallimore: Absolutely. I mean, I suppose, clarified that was my previous business. Now, my business that I’m doing is Outsource Accelerator, and that is basically helping people such as yourselves, navigate the outsourcing market and all of the outsourcing. There’s a lot of different flavours out there, a lot of different types of outsourcing, so we help you navigate that.
Look, the way I like people to think about outsourcing is really just the same as employment. And there’s a lot of different types of employment. There’s project work, there’s full-time employment, there’s part-time employment, there’s contract work. And really, it’s no different from outsourcing. It is really just offshore employment.
So a lot of the fundamentals that you find in general employment can also apply to offshore or actual outsourcing. Unfortunately, there are some bad eggs in terms of potential candidates or employees that you get. The bad is the same all over the world.
You have to be careful with the processes. And it is slightly heightened because of the fact that you’re in different countries. But that’s also why we are here and the outsourcing suppliers to help smooth the ride for you a little bit.
Janet Johnson: Got it. So with your outsourcing, do people work through you or do you help them line up with somebody and then they go on their own? Or is it through you?
Derek Gallimore: Yeah, so unlike staff augmentation, we formally employee the candidate on your behalf, so they’re within our sort of proper legal entity in the Philippines. They are fully compliant, all the government taxes, their health insurance is all paid for, they go to work in an A-grade office, they have colleagues.
So we very much normalise the kind of employment in the work environment so that all they need to do is just concentrate on your deliverables and your task for your organisation. Everything else is taken care of, right from the HR recruitment, employment, all of the hardware internet, the safe, friendly, and enjoyable work environment with colleagues.
And then so it’s just down to business in terms of their relationship with you, and kind of building the processes for your particular organisational needs.
Janet Johnson: So you better them already.
Derek Gallimore: Yeah, We do like, first round, we obviously source candidates according to your job description and your requirements. And then we source them, we do the first-round vetting, and we can do references of course.
Then we can introduce them to you, shortlist. You can then do interviews, you can give them tests, and then you onboard the candidates that are suitable for you.
Terry Bean: So then, do you already have a specific bench full of professionals? Or do you go out and find them per project? Or is it a combination?
Derek Gallimore: It’s a combination. Generally, if suppliers have a lot of people on the bench, you have to sort of ask why and where they’ve come from. It often is best if people are sourcing specifically for your needs, according to your job description.
But if it’s a more common role, such as customer service or content or creative, then they’re probably going to be faster turnover and we’re going to have some on hand. Whereas if it’s something a little bit more unique, like a certain profession, or a lot of years of experience, then you really have to go out to the market for a minute then just take a few weeks like it would in any normal recruitment process.
Outsourcing in the Philippines
Janet Johnson: Interesting. What is the average cost per – for instance, I’m VA. And we get help with our podcast, of course. So we do the podcast, we can send it there. She’s been with me three, four years, she’s going to be listening to this because
Terry Bean: You better have that right.
Janet Johnson: I know it’s terrible. I just did – I lose the years, you know. But anyway, and so she’s working with me. Somebody like that, what kind of – or even graphic design or web development, I mean, just a range of what? Because you said you’re saving obviously from the US –
Derek Gallimore: Absolutely. And one of the key motivator is you saving pretty serious money here. But as well, it’s the availability. There are 110 million people in the Philippines and about 650,000 graduates every year. And there’s just an incredible, highly-qualified and very eager, very loyal workforce here.
And generally, we suggest you can save about 70%. All in. So, obviously in the US, you have a salary, then you have all the government contributions, and then you have the office costs and all of that sort of add-on costs. When you compare like for like, it would be 70% savings generally. So it’s really significant.
If you want to put a few figures to it – base salaries, so if you’re just looking at the base salary – it would be somewhere between about $500 per month up to about $1000 per month. Pretty much for – these are college graduates.
The 500 a month would be kind of two to three years post-grad, and then up to $1,000 a month, you would start to get senior management, you would start to get professional, like accountants and like mid-level accountants for their web designers. So you know that you get a really good range between about $500 and $1,000 a month. Now that’s the base salary.
And then there are the facility costs on top and the employment and government contributions, which can often have up to about another five or $600 per month. But it’s still an incredible opportunity for both sides. Everyone in the US and the Philippines.
Janet Johnson: Well, I think, when I recommend people – so that’s, the cool thing is like, I get asked like I said all the time. But then a lot of people, what happens is they use some people and they figure it out. But it doesn’t work for them. So I think I really like how it’s vetted with you.
You know what I mean? Like you’re in control of them. You’re the third party that helps. You’re there, which helps, they’re in your office. So I think that makes a big difference. And definitely would help for sure.
Derek Gallimore: For sure. It can sometimes be, for the smaller businesses, a big leap, but getting someone full-time and dedicated, and also getting someone that comes into an office. So obviously, it’s professionalised and they have a routine.
It just ensures success. Versus a lot of people start out on UpWork or Freelancer or OnlineJobs.pH, and sometimes that can just be a little bit disappointing and people are a little bit tainted by it. And they say the whole thing doesn’t work.
Janet Johnson: Exactly.
Derek Gallimore: And unfortunately it can be two steps forward and then two steps backward. We can really sidestep all of that. You get one or two successful onboardings, and then there’s no stopping now clients. Very soon, people are building up to 10 or 20 or 30 staff, because I just can’t believe the incredible quality and opportunities in outsourcing in the Philippines.
The population of the Philippines…
Terry Bean: I got absolutely down a rabbit hole while we were talking. When you said 110 million people. I was like, wow, we thought the Philippines was kind of small in terms of geographical size.
So now all of a sudden I’m like, all right, well, how big is it? Well, it’s 300,000 square kilometres. Okay. So the United States is over 9 million, right. So one-third the number of people in a size that’s half the size of Texas. Texas is 600,000 square kilometres.
No wonder there’s a tremendous density of folks there is every I look. I can see through the window behind you there’s obviously some high rises, just vanilla just kind of stacked on top of each other.
Derek Gallimore: It’s one of the biggest cities in the world now. I think it’s sort of 22 to 25 million I don’t think they really know how many people live here. It is one of the densest, most highly-populated cities in the world. You know, the country is very disparate in that Manila is very dense, lot of 70 to 80-story buildings, and very sophisticated as well.
But then they also have about 7,100 Islands, many of which is just incredible deserted islands, white beaches, stunning scenery, that is very remote. Just what you would mention, sort of a tropical paradise. So there’s many sides to the Philippines.
Janet Johnson:: That’s crazy.
Terry Bean: That makes it easier to live there. I would imagine when you can hop on a boat and be at a deserted island within 45 minutes or so.
Derek Gallimore Yeah, and it’s never cold. You never need more than a T-shirt, which also helps.
Terry Bean: I just saw it was 81 degrees. It’s 9:50 pm, so it’s 81, it’s almost 10 o’clock so…
Derek Gallimore: Yeah, it’s crazy. It’s pretty much 81 like, whether it’s midday, midnight, or six. It’s crazy.
Janet Johnson: I suppose. No humidity either. Okay,
Derek Gallimore: The killer. Yeah. That’s why I need to get to the beaches so you can cool off.
Janet Johnson: The girl that works for me, Joanne – Hi, Joanne again. She loves snow. Her biggest dream in life is to touch snow. I’m like, I wonder if there’s a company that can mail her snow.
Terry Bean: We should send her snow as a thank you. Act surprised, Joanne when you get it. Act surprised. Plenty.
Janet Johnson: I think it’s so odd though because I’m like, snow? Growing up with…. But I suppose if somebody who’s never seen snow, that kind of different.
Now, one of my many questions – I’m doing this because I think this is a great opportunity for anyone. Us as a small business, I mean, I’m a very small business. I have somebody in the United States that works for me, and then I have two, but I have a third one that works on my own websites in the Philippines.
And how I’ve been able to afford to have a full-time graphic designer for – he’s been with me like six or seven years and a couple before that flaked. But he’s stuck strongly with me and to have a full-time graphic designer and have a BA and have somebody to help me with my websites is affordable. Like, I’d have to charge exorbitant pricing as my agency if I was not paying the Philippines. So I think it’s just such an opportunity for people.
The one thing that I did when I started doing – this is a question for you – is part-time. And I still have, some are part-time or full time. Do you offer part-time or is it always full-time because you have to bring them to the office and provide all that.
Derek Gallimore: Possibly we certainly can look at things. But again, it’s a bit like employment. You generally don’t find the best candidates that are hunting ground for part-time jobs. So there is a little bit of a hurdle in terms of…
If you want dedicated professionals, then really they start in the full-time market. Now, ironically in a sort of, I suppose, obviously, but in the Philippines, there is everything that you get in the US. So there are agencies or web development agencies or creative agencies, marketing agencies, content agencies.
And you know, what is so powerful about the Philippines is if you get a small core team and then you’d say to them, Look, I know You’re not a web designer, but go and find one of the good agencies in Manila to build me a website. And then, you have access to effectively, whatever resources you would get in downtown New York, that add Manila prices. So it gets incredibly powerful when you just know how to access these things.
And so everything is out there. And, of course, there are the OnlineJobs.ph and the Freelancer and UpWork, they’re all out there. But when you go into the gig economy, it’s a little bit like going down to Central Park in New York and ask the dude with a long beard to do a bit of legal work for you.
It’s probably not going to end up so good as if you went to a professionalised company to get it done. Because there are the processes that they adhere to and there’s just more confidence in the process thing. So, anything’s now…
Janet Johnson: Makes sense. It makes sense. So when people just need a few things part-time, those would be the place to go. But then if they’re ready to finally take that leap to really up their game, it would be going to use a company like yours. That makes a lot of sense. Okay.
Derek Gallimore: But do reach out to us anyway. Depending on what it is, we can also point you in the right direction.
Janet Johnson: Good point. Very good point. Okay, so, I got another question in my mind. Terry, do you have anything?
The process of outsourcing
Terry Bean: I just like the process. So do you normally work with large companies for small projects? Do you work with small companies on big projects? How does someone know when it’s actually time to outsource?
Obviously, Janet’s been doing it for a while and had tonnes of success because of her great virtual assistant. But what about other people? How do they know when to get into it? Why would I want to use somebody to do something?
How do I know when it’s time to say, I’m done trying to do this on my own, I should call there?
Derek Gallimore: So, if you’re in small business and you’re a solopreneur, or you’re starting off and you’re wondering when to start, I think it’s all of our ambitions to really grow and scale a company.
If you’re kind of just working by yourself, then you’re effectively in a job. But you’re the boss and the employee, you really sort of hit a sweet spot of business. When you start to scale the business, when you start to build processes, when you bring people on board to execute those processes, then eventually, you can remove yourself from being sort of a critical cog in the wheel of the function of your operations.
So this is all a process, again, which is natural within the business. And then whether you’re employing someone stateside or you’re outsourcing, they’re really the same. And it’s going through that maturation of the of a sort of company growth, where you start saying, look, this is too much work for me. I can bring someone on board.
Then once you sort of hit that stage, you start to map the processes, you start thinking about the processes, who you can delegate this work to, the skills that they would need, then that’s really the beginning of building a business.
Now, the nice thing about outsourcing is that there is a 70% discount. So the lumps are smaller. Hiring people is very lumpy, it’s very expensive, it’s kind of scary. And also if it goes wrong, it’s a very expensive exercise.
Whereas, outsourcing minimises that exposure, that risk. It also means that if you’re a sort of slightly more mature business with a few employees already, it means that you can bring on one or two or three people without so much exposure risk, you can test a few new ideas, few new business models, few new activities without the sort of exposure.
So, yeah, it’s a good opportunity at any stage of the business.
Janet Johnson: Absolutely. I love what you said at the beginning. It’s like, as a solopreneur, you’re just trading your hours for dollars. So, how I think of things is like, should I be doing this task? That’s kind of how I look at things. Like, should this be something I focus my time on?
So for instance, the podcast, we record, we do the podcast. But then, you know, all the fulfillment – I felt, I’ve learned everything that I do. And then I do videos and train and show what to do it but I know if it’s something that we do again and again and again and again, why not train somebody else to do that?
Derek Gallimore: Absolutely. And I pictured, there’s an analogy of the rocket ship trying to get out of the ozone or the atmosphere. It’s really hard, there’s a lot of friction, there’s a lot of stuff pushing it back down to earth.
And that’s a small business getting going, it’s really hard to pass those stages. But then as you do and you get a bit of scale and you write down the processes and you have a bit of momentum behind you, then it kind of gets easier as you go into space.
But also, you know, outsourcing staffing isn’t just about getting the administrative work done. There’s a lot of lead generation, there’s a lot of sales opportunities. There’s a lot of proactive things that can actually contribute towards building your revenues, which should help you get to those next stages faster.
Janet Johnson: Expand on that a little bit.
Derek Gallimore: Well, this is where I really challenge people to think. A lot of people that start considering outsourcing are kind of racking their brains to think of what can I possibly outsource?
But I actually try and flip that around and say You know, actually just assume that every job in your company can be outsourced. And then there will be maybe 10% of those roles that should really stay at home.
If you’re a plumber, you kind of need to be there to fix the toilet. But every other role within a plumbers business can be done remotely. And as we go, we’re talking now on zoom, everything is done in front of a computer, and you would find that generally 95% of jobs in any sector really can be done remotely.
That means in front of a computer, and then it doesn’t matter if you are sitting in an office, you’re working remotely from home, or you’re in another country altogether. So you really only limited by your imagination.
We have clients that are sitting in Manila, they are trained Naval, sea Captains, and they are steering oil tankers around the ocean. We have people that are looking at analytics from satellites from Danish mobile phone satellites, and they are tweaking the satellites in space somehow, for mobile for optimising mobile phone coverage. We have doctors and nurses consulting from the Philippines, into the US.
You’re just really limited by your imagination now. It’s incredible what you can do now over an internet connection.
Janet Johnson: Wow, that’s crazy. Well, this is good. I mean, I think there’s a lot of people that could use this. It’s just like, I think what you said is it.
I think people really need to think hard about how they could use it and I think having a call with you or something like that, to kind of just work through things. Sounds like you coach and consult a little bit on this, too, so that you can work through what the needs are set.
Derek Gallimore: Absolutely. And we’re happy to have a chat to people and just kind of explore it because it’s a little bit scary to think, it’s a little bit new. You know, you’re dealing with a country that is off the radar a little bit so, we can have a chat to people and help them explore.
Janet Johnson: And then you have a podcast too. Correct? I saw something on your website.
Derek Gallimore: We do indeed. It’s called the Outsource Accelerator podcast. I probably could have put it a little bit more thought or creativity of that but yeah, we’ve got the-
Terry Bean: Best name ever good…. I like it.
Derek Gallimore: What it says on the label. So we’ve got about 250 podcasts now. I do my best to interview BPOs, which is outsourcing owners, or senior management, senior figures in the industry, and also some clients and people that have outsourced before, business owners and things.
Across the journey and 50 episodes, hopefully it gives people a really good insight into the opportunities and outsourcing.
Terry Bean: That’s great. And they can just find that on your website or where do they find where do the listeners find that?
Derek Gallimore: That’s on the website or anywhere like iTunes or Spotify, anyway that you listen to your podcast. It’s the Outsource Accelerator podcast.
Janet Johnson: Okay, cool. Awesome. And then where’s the best – I’m sure your website – but go ahead and give your website again and then how’s the best place to reach you and connect with you.
Derek Gallimore Absolutely. So it is outsourceaccelerator.com. I almost forgot that there. And people can reach out to me directly and that is [email protected] and my name is spelled DEREK
Janet Johnson: Okay, got it. And then we have to end with what is your favourite ‘80s song? And we have two things in with actually, what’s your favourite ‘80s song? We did throw that in the beginning, we have to mention it.
Derek Gallimore: For sure. Actually, I wrote this down because otherwise, and I don’t even know if it’s from the ‘80s, but David Bowie from Labyrinth when I was a kid, I was really into him. So I don’t even know that song but the labyrinth song.
Terry Bean: I remember Labyrinth, and I think it’s close enough. I think Labyrinth came out in between ‘79 and ‘81. So we’re gonna give him full credit for it. Because it was Bowie. It’s Oh, shoot. It’s in 1986.
Janet Johnson: Total ‘80s song
Terry Bean: Totally fits. I don’t know which song we’re talking about still, but that’s okay.
Janet Johnson: That’s great. He was a different character, but yeah, and I can…And then Derek, if our audience is listening and going this is intriguing now, what would be a great action step for them to take next, if they want to move forward with something?
Derek Gallimore: Look, if people are in business, you have to look into outsourcing. You don’t necessarily have to do it. But you really owe it to yourself because the world is globalising, the world is changing really quickly. And you’ve got to stay competitive and got to take advantage of these opportunities.
So check us out. Check out outsourcing generally and just see whether it’s right for you and your business. On our website, we also offer three free quotes. So just go to our website and plugin a little bit of information or just contact us and we can give you very accurate insight into costs for your business.
Janet Johnson: That’s great. Very good. Very good. Awesome. Well, thank you. I’m glad we did this call and it will be, well, because we are called caught up, you’re going to be pretty quickly probably in about two weeks that this will go live. Awesome. Any last thing, Terry?
Terry Bean: No, I feel like I learned a lot. And I’m kind of thinking about what are the tasks that I do all the stinking time that take up too much time that I shouldn’t be doing so. And I think that’s probably the way most of us should think about it.
I think the two of you really cued that up nicely. So, hopefully, Derek, if you get a couple of calls as a result, right, some of some earning reaches out and says hello.
Derek Gallimore: Let’s do it. Let’s delegate this stuff.
Janet Johnson: Exactly. Awesome. Well, and then you can find all of our past podcast episodes at businessgrowthtime.com/blog or /podcast, either one. And then we also have a Facebook group: Businessgrowthtime.xyz, and you can see right to the Facebook group. So thanks again, Derek, and we will chat with you guys soon. Have a good one.
Derek Gallimore That was Janet Johnson of the Business Growth Time podcast. If you want any of the show notes, go to outsourceaccelerator.com/264 and as always, if you want to ask us anything, then just drop us an email to [email protected]