When outsourcing work overseas comes up, this is the question that inevitably comes: “Is this ethical?”
A lot of people think that outsourcing is about going to other countries and paying workers small wages, essentially slave labor. Outsourcing is also seen by some as taking jobs away from qualified local prospective employees, which hurts the local economy.
Unfortunately, these are common misconceptions. They don’t understand what outsourcing is and what it can do.
More importantly, they don’t understand how hiring a Filipino VA is different from anything else. They don’t know how it helps business and makes people’s lives better.
So I’m going to explain it now. I’m going to show you how outsourcing to the Philippines REALLY works and how it helps so many people.
How hiring a Filipino VA is different
When I talk about outsourcing, I’m not talking about big companies or eliminating local positions. I’m talking about a successful system I’ve developed for entrepreneurs and small-business owners. It’s a system where you hire Filipino workers and outsource tasks and systems to them. These are jobs that business owners are doing themselves. They’re not replacing US employees. They’re doing jobs that business owners have hired them to do.
You’re probably asking, why hire a Filipino worker? Why not hire a local worker or get a local VA? Because it’s cheaper to hire from the Philippines. Local labor is expensive. If you hire full-time employees, you have to deal with a lot of red tape. You have to pay income taxes and benefits. And if you hire local freelancers, all those hourly charges added up would end up costing you the same.
A good starting rate for a full-time, entry-level Filipino VA is $400/month. And if you’re feeling generous, you can give more in benefits and bonuses. Add that up, you still end up spending less than if you hired a full-time local employee.
The cost of hiring employees
Perhaps the biggest argument people make against outsourcing is the low wages business owners pay overseas workers. Workers are being exploited and taken advantage of because they’re being paid less than minimum wage.
It doesn’t really work like that. Yes, you’re paying what seems like less than minimum wage. But what these critics are forgetting is this thing called cost of living.
Cost of living varies from country to country. A dollar won’t get you much here in the US but a dollar in the Philippines can get you a good meal in a lot of places.
I pay my OFSs between $450 and $900 a month, depending on the duties they perform. Experienced programmers, for example, will make more than a copywriter or SEO specialist. To most, these salaries appear alarmingly low. No one in the United States can live on $450 a month, but in the Philippines, this is an average salary.
As of April 30, 2016, the average monthly salary in the Philippines was around $300 a month. I actually pay my OFSs a very healthy wage compared to others in the country. And the cost of living is substantially lower in the Philippines than it is in the United States. Housing, for example, can cost more than 10 times as much in the U.S. as it does in the Philippines. Food, transportation and entertainment are also far cheaper in the Philippines.
I once had an OFS tell me that he regularly lends money to his father because he makes far more than him. Another OFS shared that he was teaching all his friends to do what he does because he makes double most of them make. My employees support their extended families and send their kids to private schools. People in the Philippines can live comfortably on the wages I pay.
Neither I nor the entrepreneurs who employ Filipinos are short-changing them or treating them unfairly. Besides the above-average starting pay, I give my workers regular raises as their performance merits. I also honor the 13th Month in the Philippines by paying a second a paycheck in December, equivalent to one month’s pay.
Other business owners who have successfully outsourced to the Philippines know and understand that this method is not unethical. Entrepreneur Scott Smith has hired Filipinos to help him with local business marketing. For him, outsourcing is simply good business. “My clients feel like they’re getting a deal,” he said. “That’s a business. That’s not immoral; that’s not unethical,” he said. “A business is when you outsource or buy low, and you sell high.”
Another advocate of outsourcing once posted some comments on our Facebook page, pointing out that outsourcing overseas makes financial sense for the business. He wrote, “By definition, the purpose of a (for-profit) business entity is to make as much money as it can for the company/owners. This includes company leadership using available resources in a smart and efficient manner, which means paying the lowest prices for materials/labor (of the quality desired) that are available within the market, and then attempting to seek the highest prices for its products, as dictated by the market.
“The company’s focus, by definition, is/needs to be on maximizing its own profit. It is not in business to save the world or ‘care’ with an altruistic mindset (that is, by definition, the purpose of a nonprofit organization) about the financial concerns of employees or the economy, and certainly should certainly not hurt/weaken itself to pay more for something than is necessary. Doing this only leads to the company being weakened, with its success limited to mediocrity (at best), and is quite likely to go out of business as a result. If cheaper labor is available that allows a company to keep its doors open (or be more competitive) in an already-highly competitive global market, then the company should indeed at least consider this as an option.”
Outsourcing changes lives
One of the most appealing things about outsourcing to the Philippines for the entrepreneur is the way it changes their business. If done correctly, working with an Online Filipino Specialist allows you to become the CEO of your business and run it the way you always wanted to.
But more than that, outsourcing has changed the lives of thousands of Filipinos.
I recommend hiring OFSs full time rather than part time. Not only is this advantageous for you, but it’s a tremendous opportunity for your Filipino worker. Full-time work is hard to come by in the Philippines. Most of the jobs that exist are either part-time or temporary. When you hire a full-time OFS for your business, you are giving them long-term, stable, consistent work that they would otherwise have a difficult time finding.
What’s more, by hiring an OFS, you are allowing a Filipino to work from home. My VA, Joven has shared his experience of finding a position as an OFS on Onlinejobs.ph and how it completely changed his life and the life of his family. Joven had previously worked a few different jobs that required long commutes and longer work hours. He had little time with his wife and young son. It was exhausting and unfulfilling. But when Joven started working from home for me, everything changed. He was able to watch his son while his wife was at work. He tends to his son’s needs and plays with him, all while still completing his assignments as an OFS. Joven made a good income without having to work grueling hours or sacrifice family time.
Joven’s story is similar to the stories of countless other Filipinos. Thousands have found challenging, rewarding work that has enabled them to support their families and live the lifestyle they wanted.
Look at the big picture
It’s easy to criticize outsourcing because most people were exposed to the propaganda and bad practices before they had the chance to see the truth. Outsourcing done right helps a lot of people. And outsourcing to the Philippines has helped thousands of businesses stay afloat and grow. More importantly, it has helped millions of Filipinos live better lives.
About John Jonas
John helps business owners learn to outsourcing to the Philippines and replace themselves with virtual assistants.
He founded and owns OnlineJobs.ph.
He currently employs 40 amazing Filipino workers full-time and loves every one of them. He lives in Utah, has a wonderful wife, 4 amazing kids, and golfs 4-5 times/week.