Hello Accountants! And welcome back to the world those of you involved in Tax! I hope January SA Season and the ensuing VAT quarter submissions have not dampened your enthusiasm for the year because I’m very excited for 2024 and don’t mind showing it.
If you have been knee deep in tax returns since Christmas, you may not have seen much of what is going on in LinkedIn Land, (you may never pay attention to it). But a couple of posts that gathered a lot of attention recently were on people's stance on Outsourcing or Offshoring.
Obviously, this is a subject very dear to me and I found some of the responses astonishing for the modern world and from Accountants and Business Advisors no less!
This subject has been covered a number of times, not least by our Founder and CEO Mark Cottle; but maybe it’s a bit like a Xero certification and requires a refresher every few years so let's do a little back to basics. Allow me to address the points made in one of the aforementioned LinkedIn posts.
First off, this is not an attack on the author. The comments were made by someone ill-informed rather than malicious — this is simply an attempt to educate.
Wow! 😯 Ok, let's break this down a bit.
First off, I can see a quite common mistake of confusing Offshoring and Outsourcing… So rather than use a dictionary definition, let's use a good explanation from CEO and Co-founder of Frontline, Mark Cottle: Outsourcing Vs Outsourcing.
Outsourcing a task means you are handing a discrete process or task to an outsourcing company or professional to perform for you. They do the work with their staff and return it to you (to make comments and send it back to the company to do make another attempt until it's at the level you require). You can outsource tasks either in your own or another country and often pay by the hour or project. The point is someone else is doing it for you using their systems and processes. This means the work is being done their way.
Two common tasks are outsourcing payroll to a specialist company to handle for you or using a company in India to produce your tax returns.
The way we see offshoring is that your work is being done offshore (obviously) by someone on your own team: an employee or contractor who works for you. They just happen to be in another location. They report directly to you and do things your way, using your systems and processes (you need to provide this training initially). We liken it to having someone work at home for you, only instead of them working 40 miles away, they are 4000 miles away, but as a part of your team and a full time employee; they get holidays, benefits flexible working conditions and all the stuff well looked after employees also get in the UK and because of the wonder of FX and World Economics, it's still cheaper than doing this in the UK.
OK next up – Profitability with Morality Intact
I find it strange having to defend the concept of profitability to accountants; like you’re running a charity! Anyway, as mentioned previously, the author of the post is misinformed, they think this is profitability over morality which it is clearly not.
Frontline employees are paid more working for us that they would be working for a local accountancy firm, significantly more. They also get 20 days leave allowance + public holidays, flexible working, fully air-conditioned offices, great tech, benefits including private medical care as standard + a wide range of social activities and events on a scale we only really see at a global corporate level! That’s probably better than a lot of UK firms are able to offer employees in order to be responsible owners stay profitable!
Our people are our business, so The Frontline Team gets the above and it’s still cheaper employing someone with Frontline than it is to do so in the UK… which brings me onto the next point nicely.
The Accounting Talent Gap
I am confused by this one, maybe the author is writing from a real position of privilege but “there are enough accountants and bookkeepers in the UK already” is a real head scratcher. I suppose if you have no quality standards, and you just want a bum on a seat that can turn up to the office... Or are in Central London and don’t mind paying £60k+ to win a talent war, yeah, maybe there is no talent gap 🤷🏽♂️.
From my experience, having been in the UK accounting industry for over a decade, the Talent Gap has been an issue as long as I can remember and only getting worse. Our long-standing partners, 2020 Innovation, regularly do practice insight reports and People & Resource along with Technology have been the top 2 issues for firms to address for as long as I can remember.
It's not just the UK either, its everywhere in the “West”. We operate mainly in Australia, UK & Ireland and the US and the number of people entering the accounting profession has been dropping for decades. The number of people staying in the profession, especially in practice is dropping even faster! There have been countless articles written on the subject and not just from the Accounting Industry like ICAEW but from business and financial media outlets like the FT, WSJ, City A.M, Bloomberg etc.
As a business owner you have a responsibility to your team, your clients and more importantly, to yourself and your family!
(Deep breath) So, if you can see a way to take on skilled staff to support your team with heavy workloads, allowing more time for training, specialising, focusing on the more enjoyable aspects of the job whilst also giving you more time to invest in the firm making it a prosperous business that can further invest in its onshore team because offshoring is more profitable (and breathe). Isn’t that something you have a duty to consider?
Last point… Modern Slavery 🙈
I had to laugh at this last one! Not only have I talked about the benefits and conditions of our team. Offshoring to The Philippines is incredibly popular for most of the English-speaking world. Our office is in IBM Plaza, our next-door neighbours are Accenture, just down the road are the American Express offices and the Intuit QuickBooks Rest of the World Office, this is to name but a few. There are over 1000 BPO’s in The Philippines with differing specialisms and combined, make up 7.5% of the nation’s GDP ($30Bn)
Recruitment in The Philippines is hard! We have an expert team of about 15 staff in our recruitment team to ensure we can attract and find the right talent for our clients. We do all we can on the HR, benefits, salary and working conditions to retain staff because if we (you and us) don’t look after the staff, there are 1000’s of other who will.
I’m not just paying it lip service, I’ve been out to The Philippines 3 times in the last 2 years with another 2 more trips this year.
I feel I may have talked enough here, so instead I’ll share some links of my time in Manila, and you can see if you think the Frontline staff are well looked after or not…
In summary, there’s no moral hazard in building an offshore team, in fact, if your onshore team are overworked your moral hazard is ignoring it as a solution to your capacity issues.
If you would like to chat with me about how to get started building your team from Bookkeepers, to Junior or Senior accountants, even Auditors, get in touch and I’ll be more than happy to walk you through the Frontline Service.
UK Country Director
Frontline Accounting
With over 10 years’ experience working with Accountancy Firms, BPO’s and Fintech’s like Intuit & Dext; Mark helps firms maximize efficiency and solve capacity issues with People + Technology.
Schedule a call with me: www.calendly.com/markmcnee
