It’s All About Seat Utilization, Baby
Every business process outsourcing company wants to maximize its seat capacity, and it’s tantamount to factories operating 24x7 to make the best use of their equipment.
For reasons that remain elusive, there is a divide between US-facing companies and their Australian-facing counterparts, and there are only so many 24x7 support projects.
At some point, an outsourcer focuses on North America, or it focuses on Australasia. (Many companies support the UK from the Philippines, but it remains mostly the province of Indian outsourcing providers.)
Considering this elusive, follow-the-sun seat utilization strategy, we should pause on where an outsourcing company wants to sell services.
Amateur Offshore Outsourcing Economics
As a Philippines provider, we tend to look at the English-speaking countries listed in the table below. I’ve eliminated the Caribbean and South Africa since they have home-grown outsourcing industries in their own right.
The table below shows Australasia, North America, the British Isles, Hong Kong, and Singapore. The ideal country profile reflects decent growth, high income, low unemployment, and inflation since these factors drive businesses to seek offshore solutions.
Australia is fertile territory: many small to medium-sized enterprises (SMEs), a growing economy, high employment, and climbing inflation.
Staffing in Australia is Expensive
Staffing costs serious money. A 2021 ELMO Software report noted that it takes around 34 days to staff a position in Australia, costing AUD10,500 on average, with more than double that number for C-level executives.
Once hired, Australian talent is expensive. According to Outsource Accelerator, the average annual salary for a Filipino graphic artist is USD3,883 compared to AUD51,006 in Australia, and this highlights the staggering opportunity for cost savings through labor arbitrage.
Australia has a Talent Shortage
In a recent KPMG poll, business leaders cited “Talent acquisition, retention and re/upskilling to meet a more digitised future.” as their chief challenge in 2022.
A Human Resources Director article quotes Megan Lilly, executive director for education and training for the Australian Industry Group: “Quite simply, our available supply of skilled labour has shrunk since the commencement of the pandemic — the result of a lack of skilled migration, international students, backpackers, and other workers in Australia returning to their country of origin.”
The Time Zone Variable
Australia’s time zones are close to the Philippines. New South Wales is two or three hours ahead, depending on whether daylight savings is active. Perth doesn’t observe daylight savings, so it is always GMT +8, as is the Philippines.
Programs focused on United States’ time zones, which are twelve to fifteen hours behind the Philippines, require agents to work nights, which can be arduous over time. Given a choice, most people will opt for daytime work if the compensation is comparable.
Staffing and retaining people for Australian programs is therefore much less challenging.
Philippines Outsourcers want Aussie Work
Australian business is great for Philippines outsourcers. Don’t get me wrong; we’re not country bigots, and we work for companies in most English-speaking countries.
A nearby, large market with a massive staffing shortfall that stands to gain considerable cost reduction served by many skilled people looking for quality work. That sounds like a win-win.