The better part of my early career was spent in Metro Manila with an American Company who had various shared services and engineering centers set up in the prominent Central Business Districts in the Philippines. They had offices and local business partners worldwide, supported by highly skilled and capable technical talents from select schools and very experienced people from the Industry. All time zones were covered by rotating shifts spanning APAC, EMEA and NALA regions. The offshore team not only provided a very diverse mix and high level of technical skills, but also effectively offered support in the major languages (Spanish, English, Chinese etc). The company strongly incentivized each additional skill and/or language proficiency level attained. Looking back at this feat now, it was truly a capable team -learning and using foreign languages while conversing effectively in highly technical jargon!
Almost two years later, I had the privilege of joining another Multinational company with Swiss-Swedish-German roots. This prominent Industrial Behemoth boasted a vast global footprint. I
worked with countless nationalities on different projects worldwide. Based in Singapore, I flew out to so many countries embarking on a good mix of hands-on technical jobs and business development campaigns. This opened my eyes up even more, on different ways of offshoring and outsourcing, and
small to medium to very large enterprises were all part of the dynamic outsourcing / offshoring ecosystem. This company had an Engineering Center in India, which bore the same banner and branding, but was commercially, a separate Entity. The other Similar Branded Entities from the more advanced countries, would source manpower and expertise from the other lower cost Engineering centres where talent was on tap, scalable and affordable. My customers, and their other service providers had offshore teams supporting site teams. Having seen how the numbers work, the savings would range from 50% to 90%. For well-managed mega-projects, savings and productivity can go hand in hand. Some lucky Engineers would be assigned to long term projects overseas, which works well for the Outsourcer and the Outsourced as both had economic gains from doing so.
Another four years passed, and I find myself in a pub in Kula Lumpur, Malaysia. When my phone rang, little did I know that this would start my foray into Australia. Working on one of the biggest energy resources project in the world at that time, along the way, I’ve also tried my hand in setting up a Lead Generation Business with partners in the US, but manned by administrative agents and software development outfits composed of highly capable workers in lower cost countries. I found this model really very simple, high value-cost-effective-scalable and VERY productive resource pool on tap is employed to cover the ever-increasing demand for talent.
Fast-forward to almost two decades later after my first IT gig, I decided to leave the seemingly inescapable embrace of working for one of the largest energy companies in the world, and then
COVID hit. The projects I had lined up seemed out of reach as I could not travel. An old colleague from Singapore reached out, asking for help for his Safety Systems Oil and Gas project in Taiwan. He had inherited servers and code that simply were not done right. At the peak of covid, I rescued the servers, rebuilt the code, and supported the startup and commissioning of the plant--pretty much turning the whole job around entirely remotely, sitting at my home office in Brisbane, Australia. This,
plus other similar success stories of offshored and entirely remote work was accelerated into mainstream acceptance, thanks to COVID.
Half a year later, I was privileged to join a mid-tier Engineering company in Brisbane who had great visions growing with the Fourth Industrial Revolution. First two years, I worked almost entirely from home, supporting our clients remotely, wherever they were. Eventually, I found myself being queried by the CEO of that current company about my connections with the Philippines and my experience with Engineering over there. The company wanted to scale up, but the talent pool in Australia, let alone Brisbane, was severely depleted and bringing-in talent from elsewhere was going to be costly. This evolved into my journey into creating an offshored, shared service center for my company. Doing all the groundwork, understanding all options, and the local nuances of the host country (Philippines), for a simulated head-count of 30 personnel of combined technical and administrative skills - I projected to have an average savings of 60% to 80% on salaries.
For a small contingent workforce, the overhead savings was $4M. Scaling it up to a further 70 heads, the savings went closer to $10M. In the process, I learned that apart from setting up an entity, an EOR (Employer of Record) service provider is also an effective and viable option. For a fee, an EOR company hosts manpower on the outsourcers behalf, takes care of all the legal and compliance matters, handles payroll and employee onboarding. In a nutshell, an EOR service takes away the liability on the hiring company, and the hassle and cost of setting up a legal entity. It legally shielded a hiring company from labor disputes. Setting up an entity and growing it to have the same culture as the parent company, is noble but requires careful planning, communication, implementation and larger startup cost. Office rental, Corporate-grade internet, and IT Costs in the Philippines in some cases were more expensive than in Brisbane. Engaging an EOR works very much in the same way, as they merely act as a legal host for employees, but employees work directly for the end-user client. The unseen cost of having to host employees in an office, worry about IT, systems and processes, compensation and benefits, taxes and legal compliance, annual auditing etc. can easily be bypassed by businesses who just want to accelerate their expansion without having to worry about all the mentioned hurdles by utilizing EOR solutions.
