Is Outsourcing Exploiting Cheap Labor?
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by: TyroneShum
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Now don't get me wrong. I've got not a problem with that. And, it's definitely already half the price of what costs to hire just a local executive assistant here. Like any executive assistant, you'd be looking at paying them a nominal amount of $3000 to $4000 every month just to have them work in your working environment full time and also too, do the work you need them to do and on top of that, you're going to include super taxes, etc and many others so in fact it'll become more than $4000. But to employ a virtual assistant, a full-time virtual assistant doing work for 40 hours a week in the community here with an outsourcing company costs you in approximately $1500 and that's included everything. You don't worry about the taxes, you don't worry about super annuation, you don't have to worry about setting computer for them and so forth. And he commented that I believe he thinks that I'm really taking advantage of it really cheaply because to employ someone for $300 a month is really, really low cost like it's less than a dollar or $2 an hour. And, now I'm going to present you with my opinion. I know that a number of people are getting really edgy with this. So I'm going to present you with my point of view and how and where I sit on it.
In my opinion, outsourcing is another way to give a job for someone else and also so that you can give them skills and a livelihood. The real difference between hiring someone here and hiring someone overseas say in Philippines, or India or any of those other countries and particularly for me, I hire people in the Philippines, is that their economy is really different. Tthey have a different foreign exchange to us. And if you're to stay there and basically live their standard living, the price of living would be so, so much lower and therefore that's why their wages are so much lower. But in comparison, they're getting virtually the same say earnings as what we would be getting here but our exchange rate exchanges then it looks like it's so much cheaper. Say somebody in the Philippines they're getting paid 20,000Php per month just as a full time programmer. 20,000Php a month equates to roughly about $400 US each month, approximately. Whereas here in Australia, you're probably looking at hiring a full time programmer for roughly about 10K every month like for a really, really serious type of programmer that I'm hiring in the Philippines. Now, 10K -- $10,000 AU versus 20,000Php, 10,000 you can do lots of things in Australia. Standard living is much higher that's why you need to be paid that much higher. And also too, $10,000 takes you quite a bit of way but after you pay your mortgages, your food, your expenses and stuff, you might only be left with maybe about 5 or 4K every month or so. So the cost of living is very high whereas in the Philippines, 20,000Php really does push them a lot further as well, too. So when it comes to propotional scale and also the standard living, it's very much relative. And that's precisely why people just don't understand that I'm actually doing a good thing to supply a job for people inside the Philippines and paying them that kind of rate. And, if I had to hire someone here, yes person here might not get a job here but I'm actually providing a job for someone overseas. And because we are a world economy now with internet, with quick access with social media, we can obtain access to resources similar to that. Basically you can contact someone and you will be able to get in contact with someone instantly.
Whereas in the past, gain access to the economies and scales, to access all those kind of resources it'll take you days, weeks, months even just so that you can access it. So time does change and if you're not keeping up, particularly large companies right now like large telecommunication companies, they're outsourcing to Philippines, they're outsourcing to India and they're outsourcing to Russia. All those countries out there, their economies and scales are just about in proportion but their exchange rate makes it look like as though they're not getting as much back. So that's the reason i think why I do think it's not a bad thing, it's a great thing. You actually offer a job for someone else. And yes the person domestically, you may lose the job but that means that they'll have to go out and be a little more either a better entrepreneur to look for a job and upsell their skills and be a little bit more specific and professional because the more professional you are at a particular skill, the less demand there would be.
So I'm just going to reiterate on what I'm saying. It's not a bad thing, we're not exploiting affordable labor, we're actually getting a benefit here and also providing a benefit for other people overseas and in addition, small enterprises can usually benefit from this if they think they're going to be hurt by this. If you are not starting to outsource as small company in order to be able to compete with medium to large sized companies, you're falling behind the eightfold because I know that a lot of large companies are already doing it already. You may have heard this when you pick up the phone, it gets re-routed over to the Philippines and you'd be chatting with a Filipino. It's quite typical, I've been hearing that myself and I've even had times when I said, "So which part in the Philippines are you from?" They go Manila, Cebu, I'm not surprised.
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