Offshore Labour - Three Myths Busted
There are a few arguments that pop up from time to time concerning whether using offshore staff is ‘right’ or not. The three main issues regarding employing ‘offshore staff’ are:
2. Slave wages
3. “Oh my God, all our jobs are going offshore!”
All a bit dramatic. But there is some truth in all of these issues. Not much, but some. Let us explain in a bit more detail.
Filipino workers are backed by a strong, employee biased Labor Code, which is enforced by the Department of Labor. The bias against employers is similar to that faced by employers in the West. As an employer, we have to comply with a suffocating set of rules and regulations.
Let us describe a typical office and working environment for a foreign company in the Philippines.
Staff work in modern, air-conditioned offices that are equipped with the same technology you would find in the office of a western accounting firm
When staff work overtime, they get paid for it
Employees get 20 days leave each year, along with a significant number of public holidays. Many workers also receive a health card for themselves and a dependent. Their employer usually pays for this
We can tell you that in our office, staff work on new computers with dual monitors and up-to-date software
Hardly a sweatshop environment, is it? The media love a dramatic story. They sell more newspapers like that, but the reality for most employees is that this isn’t the case.
2. Slave Wages
There are places paying illegally low wages, but it’s not the norm. And yes, our staff earn a fraction of what their western counterparts do. We know most people spend what they earn, usually by buying useless crap. The Filipinos are no different when it comes to saving, it’s just the numbers are smaller and the spending is usually to support elderly parents or siblings going through college. Here, you need to look at both income AND expenses.
Let’s break down some numbers. You are an accountant so this will probably get you excited.
Typical salaries for accounting staff are between US$500 and US$1000 per month.
A taxi in the UK costs about 20 times more than a taxi in the Philippines.
A pack of cigarettes in Melbourne costs about A$20. It’s less than A$2 in Manila.
A movie costs least A$20 in Australia. About A$5 in Manila.
The same ratios exist across other things such as food, accommodation and public transport. Cars and electronic goods aren’t cheaper, but almost everything else is.