Building a successful international team starts with the question of resourcing and the biggest impact on your ability to scale resources quickly will be your cost of those resources.
The Philippines is a popular country for outsourcing to from Western countries based on the convenient timezone, native English-speaking and well-educated citizens and well-established business outsourcing industry.
Here I break down some of the top questions we receive about our Philippines-based team:
– How to pay and how much
– What currency is best to pay
– Hiring direct vs. through an agency
– Working at home vs. in an office
– What we actually pay each of our staff
Links:
https://www.thevirtualhub.com/
https://www.exponential.business/
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Transcription:
Good day, guys. Great to be here. Peter Moriarty, and I have your answers. No, I have your questions. I have the answers to your questions on hiring in the Philippines and building a remote team. This is something that we’ve been on a long journey over the last seven or eight years. We now have a very successful team of over 35 staff, primarily based in the Philippines. We do still have a handful of people in Australia. Well, two people in Australia right now.
I want to answer some questions about how we built that, but most importantly, questions around salary and what do we actually pay, what does it actually cost us for that cost base of all those people because this has really been something that’s helped us to accelerate our business, and it’s a question that we get all of the time. So please go ahead and drop your comments below this video, any specific questions that you have. I’ll be very happy to answer them either on the live or afterwards. If you’re joining in live, make sure you’re asking a question so I can help you out.
Okay. So you want to start hiring in the Philippines or you want to start building an international team. How do you go about it? Most people will research on how to hire a VA, and there’s a lot of data and information out there on hiring a VA. Now, I don’t really like that term “virtual assistant” because people aren’t virtual, humans aren’t virtual. Humans are humans. Really, if you’re hiring a staff person or a staff member to be a part of your team, I don’t think giving them the moniker of “virtual” really sits well with me at all. So for starters, please call them international team members, remote team members, international resources, or just staff people because that’s what they are. So let’s first all agree, remove the term VAs.
The first thing that people start to think about is, “Well, should I be paying someone in Australian dollars, or should I be paying them in their own local currency?” That’s a really good question. For many people, they will default to an international dollar amount like US dollars. We chose on the recommendation of James Schramko, one of my mentors, to actually pay in local currency. The reason for that is that we didn’t want to have our team actually bear the risk of the foreign exchange going up and down.
Now, in the last three months, a lot of change has been happening in the economic situation that we have. So that meant that the Australian dollar and the US dollar, which the Philippine Peso pretty much piggybacks off, has been fluctuating quite wildly. That would have changed our team’s salary by probably 10% or 20% to the detriment of them, and so we are very happy to pay in the local currency. It means that we have to bear the risk of that, but considering the relationship where we’re getting a very, very big multiplier on our efficiency of our capital, on the resources that we’re hiring, I’m very happy to take on that risk, and I think it’s the right thing to do.
So first thing is if you’re wondering what currency to pay in, if you’re going to hire a lot of people in the Philippines, then probably best to pay in the local currency of the Philippine Peso. Now, if you’re growing and expanding your team internationally, that gives you the bigger question of, “How do you manage resourcing overall?” We’re in that challenge now of, okay, expanding into the US and being more of an international business. Do we pick some kind of common currency like the US dollar and have everyone paid in that? So there’s still questions around that, but for now, I’m very comfortable and happy with how we’re paying the team, and they’re very happy right now that we’re still paying, still paying them what we agreed to pay them even though the exchange rate has changed quite a lot.
So the second question that comes up immediately when you’re starting to hire is, “Should I hire direct, or should I hire through an agency?” That really is the biggest question because the actual hiring part is pretty challenging. Finding someone in another country, how do you do it? There’s no Seek.com for the Philippines. Although, there are a number of job websites, which I’ll share some recommendations for, and that whole hiring process really takes a lot of forethought to get it right. You have all of the cultural challenges. You have the challenge that you’re not actually seeing someone in person, and so there’s a whole hour-long webinar that we’re doing. That’s actually happening tomorrow for our members, all on going right, deep, deep, deep into the hiring process: what websites we use, how to actually hire people, how do we interview people, what tests do we set for them before they become employee, how do we onboard them, and what are all the tools that we use along the way to make all that happen.
So if you’re interested in that, that is our eight-week Remote Work Playbook, and that is exclusively for itGenius Concierge customers only. If you’re not yet a customer, jump in one of the links below this video, and you can go ahead and check that out or just have a chat to our team, and we’ll be able to help out with that. But if you’re interested in how to hire, like what websites do you go to and those kinds of things, I’ve got a couple of links that I’m going to share later on in this video.
I would say if you’re just starting out, the best thing to do is for your first two or three employees, start with a agency, to start with someone else doing the hiring. An agency is, yes, they’re going to cost you a lot more, maybe even double the price of hiring directly, but they’re going to take care of the HR, the training. They’re going to make sure that your team are actually working. They’re going to take care of the cultural aspect because if you’ve only got one or two staff, it means that they’ll be in an office or possibly at home. But at least they’ll have some culture with the systems and processes of the company, and they’ll feel part of a team of other Philippines-based staff as well. That’s really important. So it just takes away all of the difficult bit of hiring yourself to have an agency take care of it. So for the first two or three staff, that’s my recommendation. Then, once you get on your feet with your team, then you can consider hiring independently or directly with your team.
The next big question is, “Should you work at home, or should you work out of an office?” That’s a big one. Upsides and downsides of both. Working at home: internet connections, computers, chickens, all kinds of challenges with background noise, and actually the technical setup of that. Working in an office is great, but the commute can be absolutely soul-destroying in some parts of the Philippines. So you got pluses and minuses there. That’s something that I’ll go into detail on on some other videos.
My preference is working at home. The single reason for that is that if you are only hiring in one city or one location, you may be restricting your talent or you are restricting your talent to just that one location. A friend of mine, Carl Taylor, said, “Well, if there’s a hundred million people in the Philippines and you’ve got 1 million people in a city that you want to hire in, well, then you’re restricting your talent to 1% of the population. I thought, “Wow, that’s quite profound.” So we’ve chosen to all work from home with all the challenges that come with that.
Whenever we talk about hiring in the Philippines and particularly, when we put this on Facebook ads that go out to audiences that are not familiar with itGenius, not familiar with me, myself personally, and the way that we hire an ethos and the way that we run our business, we get this… a little bit of backlash. There’s always that one or two people who say, “Hey, why are you hiring in the Philippines? You should be hiring in Australia. Why aren’t you hiring more Australian staff?”
The absolute reality is, is that our business model would not work. We would not be able to serve the people that we serve if our cost base was five times the cost of what it is because hiring an Australian staff member is five times the cost of hiring a staff member for the same role in the Philippines. I have a challenge with those kinds of comments when they come our way because the reality is that I wouldn’t have this business and we wouldn’t be able to serve our customers if that was the reality if we were only hiring Australian staff.
Someone might say, “Well, charge more, or change your business model, or do something else.” Yes, well, that’s, that’s certainly an option for us, but it’s my business, and I get to choose how to run it. I know that because we’re supporting 1,500 businesses and nearly 20,000 employees across all those businesses, we’re having a great impact. I know that I’m having more of an impact with the team that I have now than I was having when I had five, six, seven staff in Sydney. I had less than a hundred customers, and so now it’s having a much bigger impact in what we’re doing, and I feel good about that.
I also sleep well in that we’re paying way more GST, we’re paying way more tax than we have in the past even though yes, technically, it’s not being paid through the PAYG system. We are also still paying tax across the board as a company, and we’re domiciled in Australia as a company, and so we’re paying a hell of a lot of GST for all the sales that we do. So I feel good about that, and I sleep fine with taking away jobs from Australians as the comment is like to show at us.
Okay. So let’s get into the meat and potatoes. You guys want to know the salaries, and this is what we’re asked all the time, “What are the salaries that you actually pay your team?” because no one’s really got any idea until they start doing it. It’s not a good idea to ask the staff that you’re hiring what do they want to be paid because, let me tell you, some of the VAs, the professional VAs will take businesses for a ride because they know that businesses in the US or other countries just have no education of what to pay. So you’ll have some professional VAs who will float from job to job, and they will, yeah, charge exorbitant rates for their services.
Now, it’s not to say that they might not be worth it, but what I will say is if you’re looking to create a longstanding team and you want to build a team that’s going to be around for a while, then you want to make sure that you are actually building a resilient team. Some of those professional VAs, unfortunately, have a habit of disappearing and moving from job to job, and they’re just looking for the next person they can con into a bit more cash.
That’s one other reason why I would say avoid the VA sites. Avoid people who build themselves as a VA. The best hires that we’ve had are those that are ex-corporate. They’ve had a corporate job of some sort. They’ve been a manager, and many of our team, over half of our team, our job… working with us is their first work-at-home job. It’s their first time working as an outsourced resource, or it’s their first time working for a company that is not a Philippines-based business. We get a lot of people from call centers, from professional services businesses.
Most of the Philippines in the professional industry is the professional outsourcing industry in some form or another, but we’re looking for managers. We’re looking for someone who’s been ex-corporate, who’s had some kind of leadership position, and so they’re more likely to have been exposed to Western businesses, Western business owners, and they’re going to work much better with us as a team member.
So, salaries. I’m going to jump into our actual salary sheet here so I can’t share my screen and run through some of the salaries. So let me start right at the… Let’s start at the top or the bottom. I’m not sure. Let’s start at the top with the exec level salaries. So the highest salary that I can see here at the moment is 65,000 pesos. Now, in the Philippines, we’re paying pesos, and it’s per calendar month. Very important. So everything runs on calendar month, and you have a 13th month, which is a bonus in December. You pay a second month. As an international company, if you’re not domiciled in the Philippines and you’re contracting to your staff, you can choose whether or not you want to pay that 13th month. We pay different variations of it for different staff, but you’re paying salary per calendar month.
So the top salary that I’m looking at here, 65,000 pesos per calendar month. Now, it’s usually paid in two payments, so on the 1st and on the 15th. We pay that through an app called TransferWise. It’s better than PayPal or anything else, got a great foreign exchange rate and a great app. Now, that person is top-level executive in the business, and that salary is something that that person has built up to. They’ve worked for us for over four years, and so that is the highest paid salary in our business.
Now, there are specialist roles in other companies that we’ve worked with that are paid more than that, that are paid 80,000 peso, 100,000 peso. It really comes down to the person that you are working with, and your particular industry, and your particular role. Some skills are in particularly high demand. Really hard to get a video producer, for example, in the Philippines because everybody wants to outsource their video production, and their social media videos, and those kinds of things.
It can be challenging to find someone who is in Manila, for example. Manila have about a 20% increase or premium on salaries. So if you’re hiring someone who happens to be based in Manila, just expect to pay more for exactly the same position. Not to say that anyone in the other cities are less skilled or less capable. It’s just the fact of that market. It’s like hiring out of Sydney. You’re going to pay an extra 10% or 20% as you would out of Brisbane or Melbourne.
So moving through the different salaries. So the top salaries, that’s basically executive level. The next level I would say would be managers. So these are leaders of pods, leaders of different areas of the business, and their salaries range… I’m looking here around 35,000 to 45,000 peso per month mark, and so that’s someone who’s probably been with us a couple years, has been in a management or a leadership position before, has now come into the business, and are leading a team of some sort. We’re working with them to grow the business. They’re involved in the strategy of the business, and they help me out with everything there.
So the next level would be our general staff, our doers, so someone who’s working on a project management role, or maybe they’re in a sales role, or maybe they’re in a customer support role, but someone… or maybe a senior finance role. Someone who’s basically helping out everyone in the team either as a doer to our customers, customer-facing, or working internally on the admin team. Good day, Tanya. Thank you very much for joining. Good to see you. I had a great long weekend. Thank you. So those roles may have been with us, let’s say, six months to two years. Most people tend to stick around with us, which is awesome because we tend to pay above what the market rate is for someone who’d be in a similar position somewhere else.
Let’s go to our next role. So an entry-level role would probably be somewhere between 20,000 and 30,000 pesos per month. Now, we’ve experimented different ways of hiring at different rates. Sometimes we’ve said, “Hey, you know what? I want to like hire above market. I want to pay above market,” and we’ve started salaries on 25,000 or 30,000 per month. We’ve had interesting results with that. Then, sometimes we’ve gone the other way, and we’ve started with a really entry-level salary of 15,000 per month. We’ve also had really great results with that as well.
What we found is the actual amount you pay someone doesn’t really dictate their output in the first six months to a year of working with you. It will certainly dictate their loyalty. Six to 12 months in, when someone goes, “Hey,” they start asking the questions, “Am I progressing? Is my career progressing? Is my salary progressing? Am I doing well here? Is this worth staying?” that’s when salary will come more important to someone.
But really, in the first six to 12 months, someone’s… your team members, particularly out of the Philippines, are interested in knowing, “Am I going to be well-looked after in this company? Am I going to be supported? Are these guys going to bin me after three months?” which happens a lot in the VA industry, which is the other side of that toxic relationship between VAs that disappear all the time and businesses that don’t care about remote stuff. So when you start hiring someone, if you have a very, very entry level position, it could be 15,000, 20,000, 25,000, 30,000 peso. That’s completely up to you, however you want to pay, but they’re the starting salary. It’s when we’re hiring someone junior and fresh straight into the company.
Now, the interesting thing is when we’re doing this hiring… I’m going to check for any other questions. No, we don’t have any others, which is good. The interesting thing is when we’re doing this hiring, if you think about what the actual… If you discover what the actual market rates are for someone, someone starting in a call center job, like maybe they’re working for TBG or they’re working for Telstra and they come in at a junior level, they’re going to be earning 15,000 to 20,000 peso per month and tax gets taken out of that as well. So there are some small allowances, sometimes healthcare and other bits and pieces, but they’re very, very basic salaries. So 15,000 to 20,000 peso per month is what our base salary is.
So if you’re jumping on and you’re hiring or you’re offering to hire someone and you’re paying 20,000, 30,000, 40,000 peso right out the gate, it can actually create a bit of imbalance and a bit of fear from this team member with you because you’re paying so far over a market rate for that position that it becomes a little bit dissociative, the experience and the response that you can get from working with them maybe. “Well, I’m so fearful about losing this role that I’ll do anything to keep it.” Right?
That’s not really the place that you want someone to be working for you from. You want to have an honest relationship with someone. So I find that the team members that we’ve brought on at a salary that is not completely bare bones, a little bit above what the market salary is somewhere else have actually performed way better than team members who we’ve brought on with higher salaries right from the get go. Just an interesting thing as it happens.
So they are our actual salaries. Hope that has been helpful for you. In our webinar tomorrow, we’re going to be going a little bit more into depth into where we find the right people, how we actually pay those salaries, how often we increase them, how we manage the 13th month and exactly how we calculate that, and then we’ll be covering, yeah, all of the ins and outs, and all of our members’ questions on hiring and building that team remotely, particularly in the Philippines. Now, this could be anywhere. You can apply this to anywhere you want. We happen to have a lot of knowledge of hiring in the Philippines.
We’ve got a question from Tim. “How important is the culture of the workplace versus pay?” Tim, I’d say that’s everything. There’s a study done. It was probably by Harvard Business Review. I can’t remember who it was done by. I’ll try and dig it up. But the study actually showed that there’s… of the top four reasons why someone will stay with a company, salary or remuneration is actually number four.
So number four is how much I’m paid, and then number three was, “Is the work that I’m doing aligned to the company vision? So is the work that I’m doing aligned to the goals of the business? Like, can I see the results in what I’m doing in the company?” Number two was, “Am I appreciated at work? Am I appreciated by my colleagues? Am I appreciated by my boss? Am I appreciated for everything that I’m doing, and do I feel good about that?” Number one was, “Do I play to my strengths in my role? Am I playing to my strengths?” Isn’t that interesting that no one really cares how much they’re earning when compared to, “Am I doing the right thing for me? Like, am I doing something that I’m good at and that works for me?” So great question, Tim. Thanks for asking that, dude. Interested in your thoughts on that if you want to go ahead and share these.
So I’ve taken you through the salary. The question that we get from time to time is, “Is this practice exploitative, going into a developing country and hiring staff there?” I already covered off, “Is taking away jobs from Australians?” But is this exploitative for the team that you’re hiring there? I like to say a resounding F, no. Our team is so well-looked after by us. We take care of health care. We take care of their families. We have a loan system set up, which we’re going to go through in our video to our community on actually the most appropriate way to loan to your team because you will inevitably be hit up for loans from time to time. We really, really make sure that we look after our team and they were looked after.
I think the most important thing with us paying a little bit more than the market salary is that our team members are actually able to support their families as well. Many have families. Many have kids. Many are looking after their siblings or looking after their parents. Having a professional full-time job that for them lasts for years. Where in the call center industry, people are just treated like absolute rubbish. You can come and go. You’re just a number and no one really cares about you. Working for a small business and being employed by a small business, which cares about the longterm success of its employees is just an excellent opportunity for anyone working for your company.
So if you can create that environment, that is absolutely awesome, and so that is the absolute opposite of exploitation is making sure that people have a safe place to work, a safe role where they can grow and their career can grow, making sure that they have a team that loves them and that looks after them, and then of course, making sure they’re playing to their strengths in the role that they are in.
So how do you get started? If you’re thinking, “All right. Well, I need to hire a couple of staff now. How do I do it?” If you’re at the stage where you’ve got absolutely nothing started and you want to start from scratch, I recommended starting with an agency. So two agencies that we happen to work with. One is The Virtual Hub, and the other one is Exponential Business. I have known both of the business owners of these companies for many years. I’m actually interviewing Barbara this evening at 5:00 PM AEST on PeterMoriarty.tv. So make sure you check that out. But those two guys are the best places to start if you want to have a chat about someone.
Now, it’s going to be much more expensive than the salaries that I’ve given you because you’re hiring direct if you’re paying with the salaries. So remember that they are going to put someone up in an office. They’re going to take care of all the HR, healthcare, all of the Philippines taxation system, and all of those overheads, and of course, they’re going to make money as well, right, as they need to grow and expand their business. So expect that it will be wildly different to the salaries that I’ve just given you, but they take care of all of the headache. Honestly, that’s my recommendation if you’re just hiring your first few people.
Secondly, if you’re interested in hiring yourself, you’ve passed hiring a couple of people, and you’re interested in starting to build out your own team, or you just want to dip your toe in the water in hiring, one of the websites that we hire through… I’m going to be sharing much more in the mastermind video, but one of the websites that we use is onlinejobs.ph. Honestly, that’s the one that we hire through the most, and that website is where you can look for workers who want to work remotely. It’s like seek.com for Philippines that… Filipinos who want to work remotely. Great website, and we’ve found plenty of great people there.
I would also say that hiring through team members is another great way of going. Now, we have our team. We have a referral program. If you refer someone into the business, we give you a little cash bonus after they’ve been around for three months, and half of our team actually come from referrals from existing team members, not for the cash bonus, because they know that they’re on a good gig, and that’s the greatest honor for your staff to actually recommend friends or colleagues to come and work for you. So that’s how you start.
Now, any questions, please go ahead and drop them below. We have our eight-week Remote Work Playbook happening over the next eight weeks. I’ve got heaps of interviews for you, heaps of questions being answered on the lives, heaps of stuff happening. Make sure you subscribe to PeterMoriarty.tv. Make sure you have notifications switched on so that you get all the notifications across your different platforms to get access to this. Of course, if you have any questions, feel free to shoot me an email, [email protected]. That’s my direct email address, and I’ll be happy to answer any of your questions in an upcoming video. But if you are not yet a member of Concierge, it starts at like 80 bucks a month. You are nuts not to get onto that, and you’ll get access to the full eight-week Remote Work Playbook. It’s happening over eight webinars. Second one now is tomorrow, so you missed last week, but you can grab all the recordings of the previous ones. We’re covering lots of stuff. Michael has said, “Thanks for sharing salaries. It’s very interesting. Can certainly be different based on nicheness. It gets me thinking.” Yeah. Michael, I know from our conversations that some of your Manila-based niche, very nichely-skilled staff are well in excess of what our top earner is being paid in our business, and that’s just the way that markets go. There’s no right or wrong here, guys. But hopefully, what I’ve shared with you in our business has given you some direction for how you can implement it in yours. I’m going to sign off now. Thanks so much for watching. Great to have you guys here, and I’ll catch you in the next one. Cheers.
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