What Australia discovered outsourcing from the Philippines?

GONE are the days when a personal assistant had to be stationed next to the boss's desk.

Brisbane small businesses and sole traders have discovered "virtual PAs" - personal assistants based in the Philippines, India and all over the world - who do the work remotely, for a third of the price and at twice the speed.

Business owners say they are saving mountains of money by outsourcing time-consuming administration work.

Rod Westerhuis, a local real-estate agent, said he knows agents already using virtual PAs from the Philippines and is planning on hiring one himself in the new year. He said it's a "no-brainer".

"I can hire three of these assistants for the same price I'd get someone locally here in Brisbane," he said.

"It might cost me $700 a month for a full-time assistant and that's inclusive of everything; there's no extra super, sick pay or holiday pay on top of that.''

He said businesses were often reluctant to admit they used virtual workers because of the stigma attached to outsourcing.

"Some people get really offended by it, they think it's unethical. And while it might not be much money to us, it's a lot of money in the Philippines. And it's also about running a business efficiently and effectively," Mr Westerhuis said.

Brett Elvish, who runs his own finance consultancy business, regularly outsources administration and marketing work to other countries.

He prefers workers in the Philippines because of the small difference in time zones (two hours) and because they are tertiary qualified - but he has also outsourced work to the US.

"One woman, I gave her 10 hours of time to do some research for me and said that, once the 10 hours was up, we'd discuss how she was going,'' Mr Elvish said.

"I got an email saying the work had been done in 5.5 hours. At $6.60 an hour, the honesty and integrity was incredible. Why wouldn't I go back to that?"

A former director of a large finance company said he "shudders" to think about how much money was wasted on tasks that could have been outsourced.

"I've run much bigger companies than what I'm doing now and I think about the amount of money we would have wasted on all sorts of tasks … and how much money we would have saved by using these services," he said.

He agreed there was a stigma to outsourcing jobs. "I think there is that element there for some people. I've been asked by people if it is sweatshop-type stuff but it's simply not true," the ex-director said.

"People are very precious about Australian jobs and while I think that's fair enough, we need to accept that the world is now a smaller place.

"There's an enormous range of things that businesses are not taking advantage of. Bigger businesses are often lazy and reluctant to change, rather than having a strong moral aversion to something like this. It's laziness."

Paul Ellison, director of recruitment company People Plus, said the impact on the administration and personal-assistant job market would be "incredibly minimal".

"Maybe, in the more transactional or lower skill set part of the market, it could be useful, but some skills sets can never be done remotely or virtually. A lot of these jobs require an understanding of communication and a compatibility with their employer," he said.

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Outsourcing stems Philippines labor exodus

Malaysia-based computer whiz Arlene Teodoro packed his bags and flew home to the Philippines this year, going against the tide in an impoverished country that sends millions of workers abroad.

Forced to leave his family and friends in 2008 in search of a decent job overseas, the 35-year-old bachelor says she is back for good because her skills are suddenly in big demand amid a business process outsourcing boom.

"Nothing compares to being back in the Philippines," said Teodoro, part of a 30-strong computer science class at a Manila university in the early 1990s, most of whose members also went overseas to find work.

"When I was working abroad I'd use up all my vacation leaves to attend family events and reconnect with my family."

Teodoro now earns about $3,000 a month as a business intelligence analyst for a US data mining firm, which uses powerful software to predict such key measures as future sales and trends for clients.

Big multinationals from aircraft manufacturers to retail chains are increasingly using these sophisticated tools, and the Philippines and India offer the most cost-efficient locales for such labor-intensive tasks, he said.

They also, crucially, have large English-speaking populations.

Data mining is one small part of the outsourcing phenomenon in the Philippines that has emerged from virtually nothing 10 years ago to become one of the country's most important economic planks and sources of jobs.

The Philippines has for decades suffered an exodus of people who have headed overseas to escape dire economic conditions, with one quarter of the population currently living on a dollar a day or less.

Nine million, or 10 percent of all Filipinos, now live and work overseas as OFW (Overseas Filipino Workers / Expatriates) in some world famous and Fortune 200 firms like Toyota Motors & Hyundai Motor Group as Engineers, Accountants and other top global firm like Chevron, Carrefour,  Honda, and in other industries for seaman, doctors, office workers, nurses, IT specialist, programmers and even for low-skilled performing jobs such as maids, drivers, construction workers and caretakers.

They sent $18.17 billion back to the Philippines last year, equivalent to 10 percent of the country's GDP, and their importance to the nation is such that they have earned the nickname: "Mga Bagong Bayani," or "Modern Day Heroes".

However the exodus has also led to a massive "brain drain" and caused social disruption as families are torn apart, with one or both parents going overseas and leaving their children at home with relatives.

But now the rise of outsourcing is giving many Filipinos a chance to stay at home.

The outsourcing workforce grew about 10 percent this year to 600,000, and is expected to expand to 900,000 employees by 2016, according to the Business Processing Association of the Philippines.

More than 60 percent of the outsourcing jobs are in call centers with Filipinos fielding telephone inquiries from, or selling products to, customers across the globe.

Although they are the lowest-paid in the sector, an entry-level call centre job still pays between 14,000-20,000 pesos ($325-$465) a month.

This is roughly equivalent to what a Filipino maid would typically earn in a wealthier Asian country such as Singapore, or a seaman's starting salary in the global merchant fleet.

The local industry is also increasingly attracting work for higher-paying skills such as data warehousing, accounting and medical transcription, as well as creative work ranging from webpage design to animation and video games.

"Before, it was the call centre boom in the Philippines, but now it's more of really specialized skills," said Teodoro.

The Philippines has risen to have the world's largest outsourcing sector an overtaken India in 2010 according to the IBM report. Continues boom of outsourcing the Philippines  is because of huge English-language workforce.

Filipino workers are also particularly prized in the United States and other Western nations because of their familiarity with their culture, a legacy of the Philippines' history as a former US colony.

"We have had expats telling us that working with Filipino teams is a very pleasantly unique experience, which they have not had elsewhere in the world," industry association senior executive director Gillian Joyce Virata told AFP.

The government has also sought to amplify the country's natural advantages by offering significant tax breaks for outsourcing firms and easing labour laws, such as one that used to bar women from working past midnight.

The industry association said outsourcing would generate revenues of $11 billion this year, up from $8.9 billion in 2010, and continue to grow by at least 15 percent annually to hit $20 billion by 2016.

This would place the outsourcing industry's revenues almost on a level with the money sent home by overseas workers.

"This industry has provided a very big support to the economic environment of the Philippines in the past decade," Trade Secretary Gregory Domingo told an outsourcing forum recently.

Aside from the direct benefits of employing people, Domingo credited the industry with a wide range of other knock-on effects such as increased car sales and the explosion of 24-hour convenience stores.

Outsourcing has also begun to transform Manila's skyline, with skyscrapers rising to cater to big foreign banks and technology companies that have set up shop with workforces that run into the tens of thousands.

"The contribution of this industry cannot be overstated," Domingo said.

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