Why do companies—specifically American companies—outsource? It’s a pretty loaded question because it comes with a lot of misconceptions. Most people have only seen outsourcing done wrong. It looks exploitative and doesn’t help the companies or the people being outsourced to.
What I’m going to show you are the right reasons companies outsource. When they start with the right intentions, they usually end up outsourcing the right way.
- The cost of living in other countries is cheaper—especially in the Philippines. It’s around 10x more expensive here in the U.S. That means if I want to hire, let’s say, an American graphic designer who’s just as experienced as Elijah (my Filipino graphic designer), I’d have to pay 10x as much—maybe even more. Even if I double or triple my VA’s salaries, it’s still cheaper than hiring locally. And if you’re a small business, and you can get great work for a lot less, why wouldn’t you take advantage of that?
- When you hire locally, you’re limited to your local labor pool. When you outsource, you have an entire country’s workforce to choose from. That increases your chances of finding the right person.
- There’s low commitment. You don’t need to buy equipment or rent an office. Filipino VAs have their own computers and work from home. It’s also easier to let them go when things don’t work out.
- No overhead. You don’t have insurance or office costs.
- There’s no government red tape. You don’t need to fill out a W-2, 1099, or a ton of other forms in triplicate. You don’t need to worry about that when you have a Filipino VA—all you need is a W-8BEN.
- Outsourcing isn’t about sending jobs overseas. That’s a misconception. No business owner wants to take away jobs from their community. Often, it’s about not being able to afford to hire locally. That’s why we outsource—we hire a VA and wait until we’re profitable enough to hire someone locally. That way, you’re creating quality jobs that offer your local employees a good wage.
I’ve seen all kinds of situations in outsourcing. Over the years, I’ve learned that the best way is to leverage the system in the Philippines to get things done and grow your business. If you want to know how to do it, go to Outsourcing Lever and get my book—it’s free! You just cover the shipping.
You can also check out how to get started hiring Rockstar Virtual Assistants.
About John Jonas
John Jonas is a long-time outsourcing expert and the creator of OnlineJobs.ph.
Since 2005, John has taught hundreds of thousands of entrepreneurs how to profitably delegate to VAs in the Philippines (and get their lives back in the process).
With help from his own VAs based in the Philippines, John has created an outsourcing empire that allows him to work 17 hours/week and to spend most of his time with his wife and 5 kids.
Find John at JohnJonas.com and Facebook.
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