There is a growing trend around the world of what is called offshoring. This is where you set up a permanent team (in another country) who work directly for you. The cost savings for office related jobs are extraordinary. As an example you can hire a fully trained (say 6 years) CPA for around $12 per hour ($2,000 per month). And that cost includes the desk, the chair, the office space, the phone, the internet access and every other ‘on cost’ you can imagine.
Yes, $24k per year get’s you a ‘fully loaded’ Accountant ready to work. And it’s not just the Accountants. You can hire any role you can imagine (that is non-customer facing) for a 1/3 to a 1/10 of the cost of hiring locally. So admin, marketing, processing, book-keeping, HR etc. You can hire a ‘virtual assistant’ for $5-$10 per hour. This is an excellent salary BTW.
In the Philippines alone there are 800,000 people working in the offshoring industry. The government estimates that this will rise to 1.3M in the next 3 years. They can’t build the office towers fast enough!
The way that is is mainly done is you go through what’s called a “BPO” – a Business Processing Outsourcing business. The BPO arranges the office, supplies the equipment, supervises the people, hires the people and then you lease the person from them on a permanent basis. There is even an association for BPO’s – check it out.
The hot spots tend to be Philippines, Malaysia, Vietnam and India. My experience is in India (43 people working for me last year to build some software on a project basis – currently we have 3 people in India) and the Philippines where I have a permanent team who are ‘mirroring’ Australian jobs and a contract team for telemarketing.
The global workforce is changing. Cloud computing makes the data lite and more transportable and qualified labour reduces the cost of business. According to my friend Scott Jones (author of the excellent book – The Third Wave and founder of Easy Offshore) that approximately 1M Australian office jobs alone will be moved off shore by the end of this decade.
This is not only a great opportunity but a serious problem at the same time. I would not want to be in the office tower business in a capital city – there will be a lot of vacant space. This subject raises many questions about the future of the employee, client data
I personally believe the Accounting firm of the future will have a local team that is client facing and the rest is done elsewhere. What are you going to do about this growing trend? If you are remotely interested do what a bunch of my clients are doing and hoping on a plane and check it out in person. A friend of mine runs ‘globalsourcing’ tours (not for profit – around $500) which I have been on. Check it out.
Disruption is the new normal. This trend will certainly disrupt the Accounting profession. To give you an idea what someone is capable of check out the video below.