Guide To Tech Offshoring

At Technology Elite, our mission is to find and provide the best IT and supporting staff in the Philippines, offering them a fantastic work environment and benefits. We believe that successful offshoring in the MSP and IT space is 70% about finding and retaining great staff, while the remaining 30% involves effective daily management. We are dedicated to assisting you in both areas.

Not Outsourcing, but Building Your Team

We intentionally avoid using the term “outsourcing” because we want to emphasise that the staff we provide will be fully integrated into your organisation. Think of Tech Elite as your recruitment/HR department and a serviced office combined. It is crucial to manage your Filipino staff in the same way you manage your local team. By treating your offshore team as a valued part of your overall workforce, you can establish a strong core offshore team that complements your operations.

Importance of Staff Quality

The salaries we recommend may not align with industry averages because we strive for exceptional performance rather than settling for average. It is important to trust our expertise when we suggest salaries and seniority levels.

Average staff in administrative or finance roles can be improved through training, but in IT roles, training alone is insufficient. As you know, it takes significant time and resources to develop a university graduate into a proficient technical professional. Similarly, we can only assemble an outstanding technical team by employing our expert filtering process to identify top percentile candidates.

Transparent Model for Your Benefit

Tech Elite operates on a transparent model that does not profit from salary markups. Our margin is incorporated into the fixed monthly fee per person, ensuring that our suggested wages and seniority levels do not benefit us financially. Instead, they benefit you by ensuring the effectiveness and growth of your team.

Comparison with Other Models

Our Specialist Staff Leasing model represents the most advanced approach in the outsourcing industry. It combines full operational control over staff selection and tasks with the convenience of not having to navigate the complexities of establishing a company in the Philippines. In contrast, older models attempt to cater to all businesses but fall short in critical areas:

1. “Generalist Staff Leasing” providers lack the understanding of running an IT business, department, or project. They often struggle to recruit the best IT staff, relying on ineffective methods like resume and reference assessments.
2. Traditional “outsourcing” of IT processes, such as monitoring, maintenance, or support, is challenging for small and medium-scale operations. The specific requirements of each client make it difficult to outsource without extensive documentation and training. This approach works best when a large number of low-level staff members perform standardized tasks.
3. Work-from-home offshoring, although cost-effective, presents scalability and reliability challenges. Issues include noisy and distracting home environments, lack of control over internet and power reliability, potential engagement in multiple jobs simultaneously, perception of work as not being a “real job,” and isolation leading to skill stagnation and communication issues.

Our Model’s Benefits

Considerable thought and experience have gone into developing our model to provide you with control over critical aspects of building a productive and loyal offshore team. Simultaneously, it relieves you of the responsibility for non-core business functions that can be complex to handle in the Philippines. Our comprehensive support makes the offshoring process easy for you.

Your Team Costs

Your monthly invoice will include three items:

1. The staff member’s salary package without any markup.
2. Any salary adjustments based on attendance or overtime.
3. Our services package, which covers all overheads and includes our margin.

Wage Examples

A general guideline for salary comparison is that highly skilled roles typically require one-third of local salaries, while lower-end roles require one-fifth. When considering salaries locally, it’s essential to account for superannuation, workers’ compensation insurance, payroll tax, and other direct costs. Our approach does not hide or mark up salaries, and we encourage open discussions about salaries between you and your staff members to support their career progression.

The Service Package

The service package covers all the overhead costs associated with our office environment and support team. This fee decreases as your team grows, as we pass on the benefits gained from your expanding team. The service package should be compared to the monthly overhead costs you incur for each local staff member, including office space, equipment, electricity, internet, HR support, payroll, and recruitment expenses.

IT Infrastructure

By default, we provide the following IT infrastructure components, all included in the service package:

• Comfortable chair and wide table
• Separate network VLAN for each team
• Two monitors
• PC specifications suitable for each role (e.g., i5 CPU, 8GB RAM, and SSD for high-end roles)
• Headset for connecting to your local PBX (VPN support available)
• Triple redundant, business-grade fiber optic Internet links
• WatchGuard routing and security
• Website filtering/blocking options
• Reliable power supply with military-grade infrastructure and diesel generator backup
• Biometric scanning and 24-hour security at building entrances

If you require specific hardware or software, we can arrange it. You can either ship equipment to us for installation or rely on our local sourcing, with a small admin fee to cover our time.

HR & Recruitment

Given the significant impact of staff quality on offshoring success, we invest a substantial amount of effort, time, and testing into finding people with solid skills. Only 5% of candidates pass our rigorous IT recruitment tests.

It’s important to note that great IT staff are already in demand and often have existing jobs. There is no waiting queue of qualified individuals in the Philippines. Our recruitment process involves headhunting suitable candidates who are job-ready and possess the necessary skills for your role. We encourage immediate interviews upon candidate endorsement, as we don’t present candidates in batches due to the stringent filtering process.

It is crucial to promptly schedule interviews, make timely decisions, and provide feedback to ensure a swift team-building process. If a candidate is not hired after an interview, we may offer them to other clients for consideration.

Staff Retention and Local Knowledge

Retaining your exceptional staff for the long term is vital. With proper management, staff turnover in Filipino teams can be excellent. At Tech Elite, we undertake extensive efforts to facilitate staff retention:

• We guide you in paying competitive wages to attract and retain talented staff, ensuring a win-win situation for both parties.
• Our office work environment is designed with high retention in mind. Located in the Clark Freeport Zone, our office offers green open spaces, clean air, spacious offices, larger desks, and significantly reduced commute times. Around 90% of our staff members live within a 30-minute commute, often using motorbikes or cars, thanks to ample free parking.
• We provide free nutritious cooked lunches to our staff. This seemingly small gesture makes a significant difference, as it aligns with Filipino culture, promotes loyalty, ensures proper nutrition, and helps with budgeting and family responsibilities.

Effort invested in staff retention pays off through improved productivity, team growth, and substantial cost savings.

Recommendations on Team Composition

We only hire full-time roles to ensure staff commitment and avoid retention issues. Starting with at least two people is recommended, with one team member having leadership experience and familiarity with Western practices. This team leader will help onboard and integrate new members into your company culture.

While the team leader cannot replace hands-on direction and training from your local management team, their presence facilitates a smoother start and scalability. Understanding the cultural expectations of Filipinos, who value hierarchy, having a local manager acting as an intermediary between the offshore team and the Australian managers can improve communication and address any issues that team members may be hesitant to raise directly.

Working Hours and Flexibility

Filipino employees in the offshoring sector understand the need for flexibility in accommodating their employers’ requirements. The standard workday is nine hours, including eight contact hours and a one-hour lunch break, with five working days per week. It is common for employees to work outside the 9-5 standard hours to align with their clients’ time zones.

Filipino public holidays may not match local public holidays, but employees are willing to work on those days. Additional wages or double-time compensation will be automatically applied, as mandated by the government, and will be reflected in your invoice.

Initial Staff Training and Induction

After hiring your initial team members, it is highly recommended that you or your frontline manager visit the Philippines to spend time inducting the team into your business operations. The more time you invest in their training and integration early on, the more productive they will become. Visiting the Philippines for a few days can cost as little as $2500, covering flights and accommodations. We can assist with travel arrangements, including airport pick-up.

Remote training sessions using video and screen sharing can effectively provide ongoing training to your offshore team. Daily training sessions during the first couple of weeks, followed by weekly all-staff video sessions, help keep your remote team connected and informed about developments in your business. It is crucial to dedicate time and effort to support your new team members, as their success is directly influenced by the level of engagement and guidance they receive from you.

Initial Implementation Consulting

To ensure a smooth offshoring process and prevent common mistakes, we offer consulting sessions derived from our extensive research and experience. These sessions cover the most significant gaps in strategy and knowledge that could impact your offshoring success. By receiving this consulting, you can expedite ramp-up, improve productivity, and foster a strong team culture. The three sessions include:

1. Offshoring Strategy: Reviewing Tech Elite documentation, discussing trends and techniques in multi-shoring, preventing common failure reasons, understanding the Philippines labor market, aligning your local team, outlining the scope and guiding principles of multi-shoring, and addressing talent acquisition and retention.
   
2. Talent Acquisition / Recruitment: We have a comprehensive process to ensure that roles are designed to fit the skill combinations available in the local market. Our Recruitment Campaign Brief is a collaborative process to capture all elements of the roles you need, and to align expectations.
   
   This “Measure Twice, Cut Once” approach means that recruitment goes smoothly when we have over to the recruitment team to run the campaign. We also inform you of our expectations during the campaign – for example, you need to be responsive to our candidate endorsements and get interviews booked promptly. A lot of work goes into finding and testing the best candidates, so we don’t want to lose them due to slow processes.
   
3. Filipino Cultural Awareness and High Productivity Management: Exploring the influence of family and saving face in Filipino culture, managing absences and tardiness, bridging productivity expectations gaps, navigating authority and discipline, effective verbal and written communication, optimising team integration, and conducting a phase review.

Project Management Services

If your situation requires additional support, we offer optional Project Management and Offshore Consulting services, subject to availability. These services help teams establish themselves and gain momentum quickly. If your processes are poorly documented, extensive induction is needed, or you have a complex project with tight schedules, our Project Managers can assist you. Pricing varies depending on the estimated time required, ranging from 20 hours per month for onshore Project Management to a combination of onshore and offshore Project Managers.

Conclusion

At Technology Elite, we have a proven model and implementation method that enables you to build a reliable and high-performing offshore team. By leveraging our expertise, you can achieve swift results, avoid common pitfalls, and scale your operations effectively. Our goal is to help you develop a dependable team that enhances your profitability and impresses your clients. We look forward to collaborating with you!