Derek Gallimore talks to Vince Dickson of ZigZag Offshoring, a Philippine-based Knowledge Process Outsourcing and Offshoring company. Founded in 2012, the company has created fully serviced offshoring solutions to its clients in seven different countries.
Vince Dickson tackles about the beginnings of the company and the services available to its clients. This episode will also cover the rising awareness of the Australian market to Philippine offshoring, how clients began their outsourcing journey, and the difference between managing both Filipino (offshore) and onshore workforce.
Vince Dickson: ZigZag Connect is a mid-tier BPO in the Philippines. We differentiate ourselves in the stance that we actually started as a client rather than as set out to be a BPO. From some of our misfortunes as a client, we went down the path of setting up a live BPO for some of our business friends in Australia. Then basically, we’ve grown almost organically from there over the past years.
Derek Gallimore: It happens quite a lot, doesn’t it? Suddenly, with the Australian market, I think there’s a lot of entrepreneurs hearing about the Philippines, hitting the Philippines, and then, wanting to make a better mousetrap and better themselves.
What was it in particular? Well, can you tell us a bit about your journey? Obviously, ZigZag had its own origin story, but what brought you to the Philippines yourself the first time?
Vince Dickson: We actually came here with a telemarketing business that I had. We were telemarketing actively out of here and we’re utilizing the services of quasi-BPO, so to speak, and the Do Not Call register basically closed that business down.
We were left with some quality staff, and we then started up our own business here which organically morphed into the ZigZag now, ZigZag offshoring. We’ve taken it to the point where we’ve continued to grow mainly by word of mouth.
On very little marketing to this point, primarily because we didn’t have the space to fill. So now we’ve taken on extra space and we’ve got about 1,000 square meters to fill so we can actively go out and search for new clients.
Derek Gallimore: Fantastic. You started with telemarketing and we know each other and I know that you’re a successful entrepreneur in many industries. The offshoring is just another feather in your cap.
Where do you find your sweet spot with the outsourcing offshoring industry? And where do you find that ZigZag fits in terms of the ideal client mix?
Vince Dickson: We have a number of clients that range across a lot of markets. We don’t niche our offerings. We do tend to have become active in the developer and IT space with having over 200 staff in that space now. We work with our clients to try and find exactly what it is that will best benefit them in the offshoring journey.
Because now some clients come here with the idea of having some developers in the Philippines assisting their team in Australia, the US, the UK or New Zealand. Once they’ve been here. they see that there’s the quality of personality available in the bookkeeping, personal assistant, or data entry.
Once they actually come here, it opens the clients’ eyes to what is actually available in the Philippines and the quality of personality available. We try not to niche ourselves. What we try to do is basically work with the client and say we will source the best people for the positions that you have available.
Derek Gallimore: This is always so much role creepers in there. People typically come over here and start with lowly, non-core back-office jobs because they don’t really think there’s such capacity over here. Then, they see the capacity and get the drift that they can do virtually any role here. It’s an incredible journey for clients, isn’t it?
Vince Dickson: Without a doubt. The number of clients that we’ve had over that has started with four or five, six seats, and now, some exceed 20, 30, and one exceeds 40 from very small beginnings. They’ve just continued to grow and put more faith in their Philippine team.
It’s also their engagement with that team because it’s not a one-way street. It’s not you just send work here and happens. It’s the more you engage, the more you train, the more you bring your people through the ranks that they get a better understanding of the business.
It’s just if you’re an office in Los Angeles, it’s just like having an office in New York. Not that much different at all. You have to train them, embrace them, engage with them. We support and encourage our clients to do that because it makes that the Philippine team is so much easier to work with.
The clients’ first months
Derek Gallimore: There is always this acceptance curve, the learning curve, the comfort curve that people go through. There’s a lot of sort of opacity and distrust when people start offshoring. As you say, it really is just like opening up an office in New York if you’re based in LA.
I think a lot of it is just uncertainty within clients’ own heads, but how do you get people over the line? What do you typically see the journey as and how do you sort of build that comfort and that early success to build that confidence?
Vince Dickson: The most difficult part for any client is the first three months. It’s then learning about the systems and the communication between the team in the home office and the team in the Philippines. It’s also getting the people in the home office use to dealing with people offshore if they’ve never done it before.
It’s also making sure that the people in the home team have enough trust and faith that one, the Philippine team can do their job. Then when they understand exactly the quality of the staff, the people in the home office don’t feel threatened by them because that’s also another barrier that you sometimes find.
It’s that they tend to be some roadblocks put up in the home office because they actually see these people as a threat. There’s a number of processes in the journey and the first three months are essential.
We work very closely with our clients to ensure that in that first three months. We give them every assistance with not only recruiting the right people but also offering systems suggestions, trying to encourage the training within the Philippine office on a person-to-person basis, trying to get the client to visit the Philippines to do that training.
There’s a lot of things we do in the first three months to try and encourage and make sure that the journey works well.
Derek Gallimore: The beginning of that journey, as you mentioned, is the recruitment process. I suppose if we just take a step back, there’s a whole heap of different outsourcing models, offshoring models. There’s everything from Upwork, Freelancer, Onlinejobs.ph, people working from home, then there’s the fully old-school kind of BPO processes.
Then can you explain the model? Where do you sit in the middle there and is this part-time jobs, project work, or is it allocated staffing?
Vince Dickson: ZigZag is basically full-time work. We tend to our staff work 100% for one client and recruit them to be a full-time team member. Whether that is a virtual assistant, guidewire developer whether that is an electrical engineer working on plans.
The range of roles is right across the board. What we tend to do is try and fill full-time roles for clients in other countries that will assist them with the growth of their business.
Derek Gallimore: Absolutely. A critical part of that is once the client is engaged, they go through the recruitment process. I think there’s a bit of ambiguity there sometimes, isn’t there?
That they think you might just have 1000 people sitting on the bench waiting to fill roles, but then you launch and you’re in the recruitment phase, which is a very specialized function in its own.
Vince Dickson: Yes, certainly. That’s right, if you want two full-stack developers, we can’t afford just to have them sitting around waiting for jobs for you to start tomorrow. What we do is run a CRM of people that have applied for jobs previously.
We do have a database of previous applicants that we get to reach out to in that field. We also then run marketing campaigns actively on the job portals here in the Philippines. On top of that, we have recruitment partners that we work with, to try and source those jobs.
We leave no stone unturned to try and find the best applicant to suit your jobs. I know that the pricing on that is that basically the better the job description, the better the opportunity of finding the person that’s going to really fit what you’re looking for.
Derek Gallimore: Absolutely. This is no mean feat to do the recruitment. I mean, I imagine you’ve recruited thousands of people over the years.
Vince Dickson: Over the journey, we probably recruited around 1000 people. We try not to turn our people over too much because it’s one of those processes where if you find good people and you reward them, they stick with you. We’re very proud of our small turn every year of staff.
But we have our own in-house recruitment team that works very hard. The fact that we have from a very early stage developed our own database of applicants, it certainly left us with a healthy way of reaching out to potential employees for your clients.
Maintaining employee satisfaction
Derek Gallimore: Absolutely. Now, we have been around your new facilities. There’s a video tour online that I encourage everyone to have a look around. These are not sweatshops. These are incredible facilities. Can you tell us a little bit about what people can expect from world-class facilities?
Vince Dickson: In a market like Manila, you want to provide a workplace that your staff will be happy. Our staff work in an environment where we provide a 200-square-meter pantry. There’s a full kitchen there that provides low-cost meals every day so they don’t have to go looking for food.
We have a games room. We have billiard tables, pool tables, foosball, computer games, and anything that you can imagine to try and make the team relax. We have breakout areas, sometimes you’ll walk in at lunchtime and one of the breakout areas and the teams are playing the guitars and just chilling out.
We try and provide our staff with an environment that not all probably get at home. A lot of times we would have staff members turn up an hour early in the morning so they can play billiards against each other because they don’t have a billiard table or it’s unlikely that they’ll have a billiard table at home.
They enjoy these facilities. It’s just part of offering an environment where you want people to come to work and enjoy being at work. That’s just part of what we try and do to ensure that the team that works for our clients have a great experience in the office.
Derek Gallimore: It’s so cored to Filipino workforces to have a strong community in the workplace and to be in a comfortable and efficient environment.
Vince Dickson: Not only in the workplace, but we also encourage our teams to give back to the community. Just recently, our people and culture team put together an outreach program to underprivileged children, where they put together some fundraising through some events we did and went out with books and notepads and pencils.
We have a monthly purpose that we deal with a number of charities and local community engagements that we try and do to make sure that not as a company but as our team. That they’re involved in this giving back.
We did Jollibee meals to underprivileged kids in a socioeconomically-challenged area that month previously. All of these engagements with the communities just build a really good team spirit. Now those teams are not only ZigZag’s own staff; we invite the staff and the team members from our clients to come and get involved in those and that just really builds camaraderie.
Derek Gallimore: Can you explain that? I’m referer little bit as co-parenting. How do you see the relationship between obviously the clients, staff who are fully dedicated to the client managed typically day to day by the client, but then obviously, they’re officially employed by ZigZag and they come to the environment of ZigZag? How do you see those two relationships cohabitating?
Vince Dickson: It’s pretty straightforward. We basically there is the legal employer. ZigZag is the legal employer of the staff and the team members of the client work 100% for them. So the day-to-day instructions, the day-to-day business is 100% for that client, and we break it down to two terms, we call them exact staff, and we call the client’s team member.
It’s just a strategy that we put in place a few years ago. Everybody understands that we’re the ones paying the tax. We’re the ones dealing with the BIR. We’re the ones that are putting in place the HMO or the healthcare.
But the client is the one and it’s their team that they’re working to on a day to day basis to ensure that they have their tasks in place they do their stand-ups, the KPIs are met and that they know what their jobs are. We just manage that the behind the scenes and the clients actually have the team members process all of the work.
Derek Gallimore: I refer to it a little bit as we work on steroids. It’s kind of like the facilities but then obviously everything on top the HR is that the legal.
Vince Dickson: Accounting, IT support, everything.
Derek Gallimore: Absolutely. Where do you see the intermingling of the different cultures? Obviously, you’re Australian. But it’s a big wide world out there all now realizing the value of Philippine talent. Where does the exact sit in terms of that the client pool
Vince Dickson: We have clients from six or seven countries, New Zealand, Australia, Japan, Singapore, UK, US, that’s just off the top of my head. We encourage our clients to visit and sit and work and train with their teams as much as often. We quite regularly normally at least once a week to an afternoon Catch up.
About four or five o’clock in an afternoon any of the visiting clients that are in town will pencil in a date. Then we just go and have a beer, coffee, and some snacks and just basically talk about the challenges and the opportunities that they face everybody from different countries in offshoring.
It’s amazing that the conversations and the industries that cross-pollinate when you sit down over a relaxing period of time and for a couple of hours. Good friendships are made, relationships are built, and business is done from places you’ve never even thought of.
Offshored roles and services
Derek Gallimore: People that are inquiring, so zigzag is role and speciality agnostic. It’s relatively industry agnostic. Where are some good roles, some really good kind of quick wins that you see clients often benefiting from?
Vince Dickson: It depends on who the client is. We have clients will come to us and they want data entry or accounting or bookkeeping roles. There’s thousands of nice staff and good quality staff, first language English, now looking for jobs today. They’re easy to fill.
When you get to the more technical roles, your full-stack developers or at the moment Shopify devs, very much in demand. When we’re searching for those roles, they’re little more challenging, but we can find them. Then if we can’t find them, because it’s a new platform or something like that, we actually look at ways to try and train people into those roles.
There’s a lot of sweet spots out there. There’s no role that I don’t think we won’t be able to fill. But certainly, the low-hanging fruit is anything that’s repetitive tasks that can be done quickly and easily outside of the office.
Derek Gallimore: As we mentioned the role previously, I see a lot of examples of people start with a couple of back end people and then eventually they’re running the entire operation from the Philippines almost. Have you seen examples of that with your clients?
Vince Dickson: Certainly. We have one client that basically now refers to his office in the Philippines as onshoring and not offshoring because he said, I have more staff in the Philippines than I have anywhere else in the world.
That’s just how that business is growing and the business has grown dramatically. They’ve never had 50 or 60 staff with us, but it’s that process of once people actually come here, engage, learn the skill sets that are available, you will continue to see that you’ll find more opportunities to grow your business without blasting the bottom line.
Derek Gallimore: Absolutely. And in terms of cost structures, how do you position yourself in the market?
Vince Dickson: We’re not the most expensive in the market, and we’re certainly not a sweatshop. We’re in the mid-range for seat lease, which is basically a desk, two screens, computer, support, everything along those lines, we’re $575 us a month.
On top of that is the staff wages and any government charges and health insurance. So that’s about probably a little bit of the middle of the pack, but our facilities, services, and customer support. I’m very proud of those. I’m happy to say that I think we’re great value for money.
Derek Gallimore: It’s the purest model, isn’t it? Where people are paying for your services, they know exactly what they’re getting for that. Then there’s full transparency in terms of the staff, the role, salaries, all of their health and benefits and government contributions on top.
Vince Dickson: 100%. That’s what we when we first came to the Philippines, got a little bit upset about because we thought we were paying the staff. Pick a number, like, we thought we were paying the staff 30,000 pesos a month where in fact the staff were getting paid 20,000 pesos a month.
So we don’t click the ticket on the staff wages at all. It’s purely and simply everything. This is our seat lease, this is what we charge you for our services, and everything about that is basic cost price. It works pretty well, because clients like the transparency.
Derek Gallimore: Absolutely. As well then it closes the loop between the supplier, the BPO, the client, the staff, and there’s just sort of openness and honesty with it with the whole loop.
Vince Dickson: Well, it enables the staff member to have an open conversation about their salary, because they can say, Look, I’ve been with you for two years and I know I do a good job. Please can I have a pay raise? There’s no ambiguity about what they actually get paid.
We as the BPO and the client now exactly the same situation, and then it’s just a conversation about whether their quality of work warrants a pay raise and whether the client’s willing to pay. So it’s an open conversation rather than smoke and mirrors, which is a pain in the bone.
Awareness of SME outsourcing
Derek Gallimore: Absolutely. You’ve seen a lot of growth over the last five years of the market. I think Australia is now becoming a very mature market. There’s a huge amount of awareness in terms of outsourcing over there.
How do you see the growth of the industry in terms of the small and medium-sized businesses in the West and their awareness of the opportunities of outsourcing?
Vince Dickson: I think the growth will continue to come, what will continue to come full steam ahead. I think we’re still in the, we’re not in the early phases, but we’re certainly in the early to mid phases of being a global business world.
20 years ago the idea of having your accounts done in the Philippines or full-stack devs building you platforms in the Philippines was probably sneezed that. Whereas now, some of the largest companies in Australia, the Telstras of the world, the Westpacs of the world, the American Expresses of the world.
TV stations have got their traffic companies and departments here now. Some of these big platforms, they’re all here. What we offer at ZigZag is the ability for small and medium enterprises to have the same benefits that the big companies do and save money on costs across the board.
As more and more business people learn about it, more and more people are inquiring about it. Sometimes it takes a big, bold step. I have a number of businesses in Australia, so I understand that it is a big step. But it just is one of those steps that you need to go into.
Go into it with your eyes open, do your homework, make sure you understand what you’re getting. And then, when you employ your first staff member, make sure you employ somebody who’s a star.
Derek Gallimore: It is crazy, isn’t it? I mean, the offshoring industry in the Philippines has been going 25 years and it’s all of the fortune 500, fortune 1000s all of the enterprises that have been here two decades. Now, I think with the advent of globalization and technology and the internet connecting everyone, it’s now available to the SMEs.
But it’s really just getting them aware of it, getting them educated, getting them comfortable. They can now be on the same sort of playing field as these enterprises.
Vince Dickson: A 100%. The big end of town has had access to this for years and they’ve run a very well and they’ve got some very slick organizations that do it. They tend to partner with big BPOs, global entities that have got 200 to 400,000 staff.
In the SME market, there are opportunities out of the US, Australia, New Zealand, multiple markets to explore the opportunity of the savings for, not core business, but roles that are repetitive and need to be done.
You can save a lot of money on your bottom line whilst at the same time employing quality loyal staff because one of the biggest problems that I found in Australia, particularly in the marketing, web development, and IT sector is that generation can’t believe that two years is a career.
So the turnover of staff in positions is astronomical in that demographic. It just becomes very frustrating as an employer that you really just start to get the value out of somebody and they’re moving on to a bigger company. That’s wherein the Philippines, you get a lot of loyalty with your staff if you treat them and pay them well.
Managing millennial workforce
Derek Gallimore: There’s endless conversations about complexities of offshoring and managing Filipino teams, but managing people and building an organization is a highly complex system, isn’t it?
So many variables and you speak thereof the millennials in the West, they’re sort of moving around, they’re wanting to transition all the time. It’s just about sort of understanding the nuances of each individual market and then playing that to your advantage.
Vince Dickson: It is. I employ a number of millennials in Australia. It’s a great experience and my daughter’s smack bang in the middle of that, so I can’t talk too much about them. But it is a fact that a couple of years in a position and they start to get itchy feet.
A number of people who own businesses reflect on how frustrating that is because you really get to the stage when they’re a valuable employee and they’re contributing to the company. Then you have to start again.
It’s a little bit of a catch 22 is you put a lot of effort into training them, and then bang, it’s just all disappeared. You have to move on to the next one. That’s where there’s opportunities where you can have a little bit more loyalty and certainly a really qualified person to a similar role based out of the Philippines,
Derek Gallimore: Number dynamic with the Philippines is that it’s less lumpy. So if you are a small business and you need to hire people, it’s less of a risk to hire that x person or two, to test a new business unit, because it’s incrementally less.
Then that also allows you to take protection in terms of having double-ups on staffing and having understudies and things like that, isn’t it? In generally, fortifying your business model.
Vince Dickson: Correct, particularly once you get to a certain scale and you get to a certain size, you have this ability to basically have almost the succession plan in place. Because you have a team of developers or a team running the accounts department.
It’s total relying on one person, you’ve got the backup there if you need be, and if somebody does leave, the next person is very keen to try and get a progression in their growth and happy to step into the place. It’s certainly a place where you can build teams and grow people’s careers within those teams.
AI and automation
Derek Gallimore: In terms of the slowdown in the sector, there’s a big narrative in the Philippines at the moment that things are plateauing, that AI and automation can take all of this away. Are you seeing that on the coalface?
Vince Dickson: No, not at all? I think AI has its place and I think AI will eventually get smarter, better, and clever. But there’s a lot of people that you can quickly identify when you’re talking to a computer or getting automated answers back on a chatbot.
A lot of people can deal with that. If it’s a basic question like, what’s the postcode for Riding Sydney, that’s fine. You can deal with an automated answer. But a lot of times when it’s a complex issue, you still need that human interaction.
AI will come, machine learning will come, it will become more and more prevalent in our industries. It will offer opportunities as well as threats. At the moment, there’s so much untapped potential in the big Western markets to offshore that we haven’t seen a slowdown or we’ve our sales funnel leading into 2020 years is really strong.
Derek Gallimore: Yet it’s incredible, isn’t it? I’m personally trying to change the narrative of the country and I think there’s a big blind spot here because I don’t see the small and medium-sized businesses in the West that are all quick on to this outsourcing and build their companies with it. It’s huge.
Vince Dickson: I think that narrative is probably based a little bit around again, your fortune 500, fortune 1000 companies that are probably looking more deeply into automation and artificial intelligence. I think that if they’re projecting in the next two to three years, there’ll be a slow down because they are able to utilize more of that which possibly they will be.
But at that end of town, it’s the SMEs that’s still- it’s a very expensive process to put that in place. So, I think SMEs can still benefit greatly.
Derek Gallimore: SMEs, I mean, everyone with a small business, it’s agile, it evolves, one quarter is completely different to the next and that just can’t be optimized. People have got to be agile and that’s why, as well, the SME-type outsourcing, you’re in dealing with high-skilled, high-quality staffing.
They’re not just 500 people in a room doing the same repetitive task. People in this offshore model are highly-skilled, highly-independent professionals that are working shoulder to shoulder with the client.
Vince Dickson: I’ve got a Google AdWords Pay Per Click professional who works for a US company. She manages campaigns for 30 to 50,000 USD a day for their pay per click. You don’t have people that don’t have skill sets.
She’s been doing that for over a year and multiple campaigns, running the entire campaigns, placing the ads, doing all the management of it, then writing the reports at the end of the month. Soon you’ve got massive opportunities in social media, Facebook, everything through doing your blog posts to LinkedIn, Google AdWords, Google My Business, everything that’s there is the opportunities for these social media experts in the Philippines are enormous.
This is just a whole range of products that are available. So, I just think the future’s bright.
Derek Gallimore: Exciting times. If there’s someone over there in the West, and they’ve got five staff or 50 staff and they want to give this a go, how do you recommend they dip their toe in the water? How do they come and talk to you? Should they fight over? What is generally the process for someone that wants to learn more?
Vince Dickson: Like going on a first date, I guess. Just contact us at ZigZag and we’ll sit down, have a conversation. will learn a little bit about them, they’ll learn a little bit about us. We’re not interested in any sweatshop style of business. We want quality people to do quality work.
We mean that the Philippine team has to be embraced as part of our clients team. That’s really important for our culture because that spreads right across the business. Once we think that we’re all a good fit for each other, we then sit down and start talking about what the team looks like, what roles they want to do, put together some job descriptions.
We start to look at resumes, we start to look at possible candidates. Then we just roll out the process of employment first couple of staff members and getting things started.
Derek Gallimore: Super exciting. And it’s just getting people over that line, isn’t it, then it can absolutely transform a business.
Vince Dickson: That’s the truth. It’s a case of once you see it, once you experience it, you go, I’m not sure why I wasn’t doing this five years ago.
Derek Gallimore: Then you realize how many people have been doing it for the last five years. It’s crazy.
Vince Dickson: That’s the thing whenever a client comes over for the very first time, and they come to our meetup, sign up on a Wednesday afternoon or we do a tour of the office, man, we all have that. That person’s doing Google AdWords. That one’s doing graphic design, that one’s building websites. That one’s auditor. Electrical Engineer doing plans for a building.
They sit there and I go, oh, wow, I didn’t realize you could do that. It’s like, you can almost see the fireworks going off in their head saying opportunity, opportunity, opportunity.
Derek Gallimore: Super exciting. Super. Fantastic. Thank you, Vincent. Of course, you have some spare space. You’ve just expanded your facilities, you’re ready to go in the new year. If people do want to test the water, if they want to get in touch with you, how can they do that?
Vince Dickson: They can basically just contact us at grow, [email protected]. We’ll respond to them and it’s probably a 95% chance that I’ll respond to them. We’ll get to have a conversation.
Derek Gallimore: Again, that was Vince Dickson of ZigZag Offshoring. If you want to get in touch with Vince or know any more about the episode, go to outsourceaccelerator.com/271 and as always, if you want to send us an email, just email us at [email protected] See you next time.