The Outsourcing Expert
__________________________________________________________________ Do What You Do Best, Outsource The Rest!
OUTSOURCING: Creating Jobs in North America & Ending Wars
Reading Time: 4:40 minutes
For everyone involved in outsourcing, whether you are a vendor or a client, you have most likely been asked; “How can you sleep at night?” This of course is referring to the idea of taking jobs away from Canadians, and shipping them overseas. Turn on CNN anytime in the last three years, and Lou Dobbs echoes his extreme bias opinions on how he feels about “Exporting American Jobs”.
There are a number of common misperceptions from the uninformed public about outsourcing practices. For one, what is outsourcing? Do you know? Most people astonishingly do not know anything about one of the greatest trends in business history. Most would say that outsourcing is “shipping jobs overseas”. While this is true, it only tells a small part of the story.
Here is a cold hard fact: EVERY business on the planet takes part in outsourcing. To what length they go about it may even determine their success. Every business owner has had business cards made for them. Did they design and print them by themselves? Chances are, if they have a good looking business card, they did not! They outsourced that job. Same goes for package deliveries, advertising, lawyers, payroll, uniforms, the list goes on and on. As you can see, outsourcing does not always mean “shipping jobs overseas”, it could mean something as simple as having the kid down the street cut your grass for you.
Definition of Outsourcing: The transfer of a business function to an external service provider.
Sounds simple. Heck, it even sounds logical!
So how is it that if a company outsources jobs to both local and oversea vendors, it strengthens not only the business itself, but also the entire North American economy?
Most people think that businesses outsource to cheaper labour markets in order to save money. While this is a great benefit, it does not tell the whole story. For example, outsourcing helps the middle class more than anyone by lowering prices on such items like clothes & electronics. An estimated 96% of clothing bought in Canada is made overseas. According to the Bureau of Labour Statistics the clothing price index has been dropping steadily since January 1998.
Bill Prontelli, a business owner in California who was featured on the ABC 20/20 News show decided to outsource 50 programing engineer jobs back in 2004 in order to prevent laying off people from his company. By outsourcing 50 programing engineer jobs to India was like paying the salary for maybe 20 employees in California. The money that was saved by this move allowed Mr. Prontelli’s business to expand, creating new job opportunities and preventing even a single layoff! In fact, to keep up with new demands, Mr. Prontelli had to hire an additional 9 people, and last 20/20 checked in, the average salary had increased!
This is not just one single outsourcing success story. Companies everywhere who are taking advantage of outsourcing their non-core tasks are expanding, or at the very least, able to maintain their current employees without having to go through serious layoffs even in these trying economic times. John Stossel from ABC News has even proven to naysayers like Lou Dobbs that companies that outsource overseas, hire on average, twice as many workers in North America than their counterparts.
Making the World a Safer Place
A few years ago, India & Pakistan were on the brink of a nuclear war. What happened next? The Indian business community went to the leaders of New Delhi and asked them to call for a ceasefire. Those leaders quickly got the message. The Indian business community did not want that bad press and possible war while trying to provide services for North America’s top companies. Although problems are definitely still there between the two countries, it is nowhere near what it was heading for thanks to outsourcing.
This idea is very simple: Give someone an invested interest in something, and they will work to take care of it. The more companies that get involved with outsourcing are making the world a safer place with that very principle idea.
Probably the greatest quote to sum up the importance of outsourcing comes from the first Prime Minister of Singapore, Lee Kuan Yew. This man led the People’s Action Party to a landslide victory in 1959, oversaw the separation of Singapore from the Federation of Malaysia in 1965 and its subsequent transformation from a relatively underdeveloped colonial outpost with no natural resources, into one of of the four Asia Tigers with a gross domestic product higher than that of Western Europe or North America. His famous quote that rings true louder than ever before: “If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.”
So for all of you business owners that do outsource, thank you for creating new jobs, and thank you for strengthing our economy & making this world a safer place for all. I’m sure you sleep very well at night indeed!
Have Unions Warn Out Their Welcome?
Reading Time: 6:45 minutes
Right off the bat, this topic is sure to get some heat from the Kool-aid drinking Pro-Union employees. It is hard to argue with facts though, as I will try to keep my bias opinion in some order here. No promises.
I live in Toronto, Canada. It is full of union workers, from teachers to auto-workers, transit to waste disposal. I have been asking myself this question for quite some time now; Do unions serve a beneficial purpose, and if so, for who?
The concept is great… Or is it?
While the 40-hour work week, overtime, child labour laws and improved working conditions are now common place because of union’s work in decades past, unions have now outlived their usefulness. Their longtime stranglehold on once great, powerful companies like Ford & GM show what kind of damage they can do to a business.
There has been a declining trend of union memberships in years past due to unions becoming more bureaucratic & assisting in reducing workplace efficiency and employee freedoms as it relates to joining unions. Now I have not spent a whole lot of time and effort in researching every single aspect of a union, but I feel I have enough evidence that they are hurting our economy and are no longer there to help the people.
One piece of evidence is the USA new Employee Free Choice Act (EFCA),which would eliminate the private ballot that currently exists for employees to vote on whether or not they want to join union.
The EFCA advocates obviously want to use peer pressure and intimidation tactics to swell the union ranks. Of course, increased union membership means more dues automatically deducted from employee paychecks and into the union’s pockets.
Some of these tactics are trying to make their ways into Canada as you read this.
As proven by our North American automotive industry, having a union workforce greatly reduces the company’s ability to compete with non-unionized companies. The days where businesses had to pay a factory worker $30+/hour plus benefits and a great pension or face a union brought on strike, while still staying relevant and competitive is long gone.
That is just basic economy! You pay your employee $30/hour, and sell your product for $25000 while your competitor pays $15-18/hour for labour and sells their just as good (arguably better) product for $17,000 price point, something has got to give.
Some argue that Unions provide a higher quality work force than that of a non-union workforce. Paul S. Adler professor of management and organization at the Marshall School of Business, University of Southern California has a different point of view than mine: “unionized firms are able to exercise greater selectivity in hiring, so 
they end up with a higher-quality workforce. Higher wages translate into lower turnover, which means less waste in recruiting, selecting, and training people to replace departed workers. Lower turnover, in turn, makes it economically rational for a firm to invest in worker training, which makes the workforce more productive.”
My Response to Paul: What laws give a unionized company “greater selectivity” in hiring? Higher wages do not mean a higher quality workforce. If that were true, you would see a bigger difference between a Loblaws worker and a local independent grocery store worker. I don’t know about you, but I do not. Also, paying someone a higher wage is in no relation to the higher quality work force, it would be nice, but is simply not true. The reason; people do not view a higher wage as anything more than “fair” (particularly since typically 80% or more of workers consider themselves to be in the top quarter of productivity), in which case they will not reciprocate a higher wage with higher work effort. While it is true, a higher wage will result in less employee turnover, from my experience that does not mean a higher level of job satisfaction or morale in the lunchroom. The last part of Paul’s statement I fully agree with. I do feel it is important for a company to minimize good employee turnover as much as they can, so that it makes sense to invest in training the worker and making them more productive. But do we need a union to do that?
The incentive of paying your worker a fair wage, train them well and provide a good work environment for them is too great for most smart business owners to ignore. Why do employees have to dip into their pockets to pay a union to assist them in achieving something that both the workforce and the employers already know and accept?
The only reason a Toronto Transit Commission (TTC) toll booth employee makes $37,440/year, plus 3+weeks of vacations instead of what true market value determines the job is worth: $24,960 and 2-3 weeks of vacation, is because of two things: TTC is unionized, & the Canadian Government keeps bailing them out with more and more funding every year! Do you think that would happen to a non-essential service? Not unless you are GM at the right place at the right time for some “bail out money”.
While people around the country are taking pay cuts, or not receiving any bonuses to help maintain the health of the companies they work for, union employees are striking for a higher wage and “better than the last time of negotiations” working conditions, all while enjoying the same or better wages while the businesses that they work for struggles.
Isn’t it ironic that the biggest advocates against outsourcing (a proven method of increased productivity and job creation by many accounts of creditable business professionals and industry leaders worldwide) is also one of the biggest problems in the workforce today?
If the unions were actually focused on helping their members, they wouldn’t be so close minded to all the options available. They would embrace change for the good of many, because after all, if the company goes out of business, what will those union officials do then?
Unions need to realize that the companies & workers that employ them must stay competitive in order to save those union jobs for years to come. To do that, union officials must not discount the benefits of outsourcing to help them with their goals. In some cases this may mean job loss for few, but the benefits outweigh the negatives too much in this case; a more stable business & easier workload for employees. While in many cases, outsourcing non-core tasks could actually increase the union’s membership by creating new jobs caused from potential expansion.
People need to stop looking at companies as “owing them”, and vice versa. Instead both parties should start looking at each other as mutual beneficial partners, eliminate the middle man (unions), and let economics work out what fair wage is, just like it dictates what purchase price is. If it isn’t broke, don’t fix it… that is unless you can make it much better than before. As we can all see from the rise and fall of many former corporate institutions, unions are not working anymore. Laws are now in place for employees and employers alike. All we need to do now is reverse the brainwashing that goes on at those union meetings, and we might have a fighting chance at fixing this problem
And How Not Paying For This Service Will Cost You In Both Time & Money
THIS IS NOT A SALES PROMO: As I stated at the bottom of this article, I am in no way (at the moment) interested in getting into the “Business to individual” service providing. Enjoy the Sales-free read..
READING TIME: 9 MINUTES
following article will briefly describe my personal experiences with virtual assistants (VA), and why I feel they are beneficial if not necessary to assist both young and old professionals alike. You don’t need to make six figures to be able to afford your on VA as you will see. Now let me show you how I transformed my work life, became more productive & earned more by outsourcing a good deal of my personal & work chores/tasks to teams of personal assistants halfway around the world.
Getting a Virtual Assistant marks the moment that you learn how to give orders and become Commander instead of the commanded. It is small scale training wheels for learning remote management & communication. It is time to learn how to be the boss!
Most of us do not need a VA. That being said, having one will not only free up your time, it will allow you to take control of your life like you have never imagined while teaching you the best managerial skills that can only be taught by living it out. It is understandable that many of you may be “scared” of the fact that someone else has all of this information about you, and what about fraud, or poor work? The fact is your information is most likely safer with these people (who are heavily screened and monitored) than it is swiping your debit card at the local store.
Now there is no excuse to always be “too busy for that”, whatever “that” may be…
Shop around. Do not hire an assistant solely on price. You may have heard people hiring assistants for $3.00/hour, well not anymore… I first started out w/ a VA in India for $4.40/hour. After a few weeks I switched to a lady in the Philippines for $2.85/hour. Now I use Michelle, a Canadian who lives in British Columbia for just under $35/hour.
Her system is perfect: She takes care of highly sensitive items such as paying bills, arguing w/ phone/credit card companies/407 ETR, checking & replying to voicemail and emails. All other tasks she subcontracts out to her team of five other VA scattered around the world. Each one specializing in a different area of competence. What does that mean to me? It means I have a team of highly competent and qualified individuals working for me, with one point of contact: my fellow Canadian! It also means that Michelle’s $35/hour fee is actually more like $5.83/hour considering the workload completed in that time.
To date, I have not spent more than $870 per month in even my most craziest times. A breakdown of actual work numbers:
total hours worked each month by the entire VA Team on Jason’s behalf: 150 hours
150 divided by 8 (working hours in the workday) = 18.75
For $870/month, I receive almost 19 days of work!
Would you free up 19 days of work each month for just $29.01 a day? Almost a no-brainer..
Which brings me to my next point. Try a few assistants out on “test runs” before hiring your VA. This testing should cost you no more than $150 and a few hours of your time.
If you plan on having a VA overseas, make sure you ask for one who has exceptional english skills due to some phone work being needed (even if it’s not). Also, if you do not have some form of VOIP phone service, now might be the time to look into it. I prefer skype since it is not only connected to my computer and home phone, but also on my cellphone & iPod (that’s right, iPod). The last thing you want to do is to find out your phone bill kills any savings you have made by sourcing overseas. My 10,000 minutes per month plan from Skype cost just $30 per year, and if the other person has Skype (almost all VA’s do) then its free!
Do not get your VA to do any task that does not achieve a specific and measurable goal. This step gets you to start thinking/realizing what is truly important to achieving your desired results. Make sure that you give your VA specific time lines for each task. If you are giving them multiple tasks at the same time, make sure to prioritize them. Also, make sure that you are very clear with your instructions. This is no time to try and impress people with your fancy words. Write or speak to your VA at the second to fourth grade level (making sure that your orders can only be interpreted in one way).
Another beauty of this is that lingering unimportant tasks will soon vanish into thin air as soon as someone else is being paid to do them. Unless something is well defined and important, no one should do it, even your VA. Also, learn to eliminate before you delegate. Never automate something that can be eliminated, and never delegate something that can be automated or streamlined, otherwise you waste someone else’s time instead of your own, which now wastes your money!
Tip from Bill Gates: “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”
Don’t get frustrated if something goes wrong… It will. This is all part of the learning process.
If I can do something better than an assistant, then why should I pay them at all?
Because the goal is to free your time so you can focus on bigger and better things, even if you don’t know what those things are at the moment… It is necessary to realize that you can always do something more cheaply yourself. This doesn’t mean that you should spend your time doing it… Like Tim Ferriss says; “If you spend your time doing something for $25 per hour that someone else will do for $10 per hour, it is simply a poor use of resources”. It is important to take baby steps toward having others do work for you, few do it, which is why so few people are living their ideal lifestyle”.
Having my team of virtual assistants has been a lifesaver. It has allowed me to do the work of multiple people, in less time per month than most high-level business professionals do per week. I rarely work more than 3-4 days per week or wake up before 10:30 am on the days I do work, but that does not seem to matter since my team of assistants have been working around the clock on my behalf anyways.
All this freedom, even with the restraints of running not one, but two businesses and consulting for numerous others is not a fantasy. I have raised the amount I earn hourly from double digits to three & on occasion four digits per hour. All for around a $11,000 price tag per year. There is no membership to join, no personal coach to hire. These are the facts, do what you would like with them. If you have a good business mind you can even get everything I have described for FREE.
Although I mentioned the price tag is near $11,000 per year for this, in all actuality, I have come to the conclusion that without this team of VA’s it would actually cost me over $40,000 per year, and 1,800 hours, or 225 days, or over 11 months of working (take your pick) in lost time where I am not being as productive as I can be, thus losing untold new business opportunities and diminishing my quality of life. How stupid would I be if I didn’t pay a measly $11,000 to save myself 11 months of work?
I will touch on how I actually get my VA’s to pay for themselves, but for a more detailed explanation you will have to wait for a future blog posting.
I actually had my VA in India create a number of websites (five in total at the moment) that are set up to push people to Amazon.com and buy their products. This is called being an Amazon Associate. What I did was have these websites made, advertising the products of Amazon.com. My VA in the Philippines is in charge of allocating advertising money to sites like Facebook & Google. Money is earned when people click on ads, or when they actually buy the product from Amazon. You can earn as much as $1.00 per click and up to 15% when a product is bought.
To date, I have been able to consistently bring in enough money to cover my advertising to drive people to these websites (roughly 50-60 percent of the profits), pay my Virtual Assistants, & still be able to throw $20-$30K into other business ventures. If you have the entrepreneurial mindset, you don’t need to pay for your lifestyle, let your lifestyle pay for you!
In a funny way, I am glad that the majority of you reading this will do nothing more than just that, read this and do nothing. If everyone had their own personal virtual assistants, then it may not be the great deal it is right now… So for the few of you that will take the next step in hiring your very own VA, congratulations on joining an elite group of individuals who are taking control of their lives & future by letting go of many of their time consuming but necessary tasks in search for their ideal lifestyle.
Update:
I have received over 100 pieces of email in just the 2 days from the two places I’ve posted this article. It is for this reason I would like to quickly clear up a few things:
1. I encourage you to take my advice & try out a number of providers before you make your choice!
2. My company’s focus is on business to business, not business to individual. Therefor we are not currently in the market to sell the services of one assistant at a time. It would better suit you to try one of our partners or competitors in this situation. send a quick email to info@simpleoutsourcing.ca and they can provide you with some great VA providers.
3. I can’t stress this enough… You WILL face problems in the first few weeks with any new VA. What you should remember is that most of the problems are usually a result of YOU not being clear & decisive enough. This will take a little practice on your part.
160 HOURS OF WORK, DONE IN 10 HOURS
Onshore Partners: Cultural Convenience at a Cost
The obvious strength of onshore outsourcing is that you will be readily able to meet face-to-face with your outsourcing partner if it is necessary. There are also added benefits to doing business with an outsourcing partner domestically, such as barrier-free communication, and there is no need to learn or adapt to new business etiquette. In the event that a complex problem arises, you can quickly mobilize for an onsite meeting with your outsourcing partner if necessary.
Unfortunately, onshore outsourcing, with its significant cultural advantages, features a high price tag that can be a strain on the average outsourcing budget. A domestic outsourcing partner will come at a much higher cost than one located offshore.
Offshore Partners: Expertise with a Budget-Friendly Price Tag
Some of the popular sites for offshoring include the Philippines and India, two countries with strong economies. They feature energetic and enthusiastic workforces that are ready to meet your business process outsourcing needs. While face-to-face meetings are less accessible with offshoring, there are significant financial benefits. In comparison with standard wages in the United States, countries like the Philippines and India demand a much lower employee wage. This is a tremendous benefit when it comes to BPO because it creates a significant reduction in out-of-pocket expenses for companies in the United States & Canada. Offshoring is much more affordable than onshore outsourcing. Offshore outsourcing firms also have state-of-the-art call centers in place to handle and issues and solve complex problems that may arise.
In your search for an outsourcing partner, you will discover that companies all over the globe have impressive track records, strong leadership and management teams, and employees with the right combination of skills to serve you. The key in choosing an outsourcing partner is deciding what is best for your budget. While onshore and offshore outsourcing partners have the skills and know-how that your business needs, the price of services will ultimately make or break the deal.
