"We supply dedicated employees who work just for you. They're at their desk, just as they would be in your office" ... Braden Yuill.
Braden Yuill has always had an entrepreneurial streak. When he was 10 he stole vegetables from his mother's garden and sold them at weekends by the side of the road. These days, he's no longer selling bags of mushrooms and heads of lettuce – he's helping small business owners make sense of the affordable market for offshore workers.
Specifically, Yuill recruits workers – ranging from web developers and virtual assistants to programmers – in the Philippines to work as remote employees of small business owners. His business Virtual Co-worker was launched in October 2011. He got his first client a month later.
"This helps small businesses grow," he says. "We're living in a global economy now and you can get labour through the internet."
These days, Yuill says that demand far outstrips supply as small businesses embrace the opportunity to access skilled workers at a fraction of the cost. For example, an experienced web developer can cost about $11 an hour.
"There is so much demand in Australia," says Yuill, who is also opening an office in San Francisco in a month. "The key is finding the right talent in the Philippines. But we have a full-time recruitment team on the ground over there to make sure we're unearthing that talent. We also check their resumes, endorse them and make sure they are decent hires."
The business operates like a regular recruitment agency. Employers are presented with a shortlist of candidates that fit their criteria. The only difference is that interviews are done by Skype video and payment is made directly to Virtual Co-worker at a set hourly rate. There are no additional costs such as superannuation, sick leave or annual leave.
"We supply dedicated employees who work just for you," says Yuill. "They're at their desk, just as they would be in your office. We have policies in place like that they have to answer their Skype calls within three rings. And we have a time-tracking system which will send you screenshots of their computer desktop every 10 minutes so that you can see exactly what they are working on."
While there are those who oppose using offshore talent – believing that it's sending jobs overseas that should go to Australian workers – Yuill says that he's found the response to be overwhelmingly positive. "This helps small businesses grow," he says. "We're living in a global economy now and you can get labour through the internet. A lot of these roles are going offshore. With our current regulations in Australia, employing staff can be quite prohibitive. And then it's costly to terminate them if it doesn't work out."
Using offshore talent is no longer a new phenomenon. Ever since sites like elance.com, freelancer.com and odesk.com came on the scene, Australian businesses have been able to access much cheaper labour with a variety of skills. Whether it is a web developer from Moldova or a virtual assistant in Pakistan, these "marketplace sites" (where you post a job or project and people bid on them) have provided more options for small business owners here.
However, while these sites have opened up a world of opportunity, they have also produced negative experiences that have scared some entrepreneurs off from the idea of using offshore talent. "Everyone has heard a horror story," says Yuill. "They've tried in India or wherever and sometimes it hasn't been a success. But we take the time to vet everyone we're putting forward to you as a potential employee."
Yuill also says he made a conscious decision to work in the Philippines. "In the Philippines, communications skills are at a high level, it's very Americanised, most people speak and write fantastic English," he says. "I've also found people to be loyal and trustworthy."
The seed of the idea of Virtual Co-worker was planted around a hotel pool drinking beers. At the time, Yuill had already founded two businesses in the online space: Callverse and cheaphotels.com.au. With the right systems in place, the businesses were able to run themselves. "I spend about half an hour a week on Callverse and a total of one day a week for cheaphotels.comau. They're all automated which is kind of nice."
Looking for a new entrepreneurial opportunity, Yuill was having a beer while visiting his San Francisco-based brother in August 2011. "He has about 30 staff in the Philippines and encouraged me to visit his operations to explore the opportunities," says Yuill. "I went there for a week and immersed myself in the culture to understand the people. Every major corporation is setting up a back office there. I saw the opportunities and realised it was just enormous."
Let's be blunt. The "opportunity" is the fact that the cost of labour is much cheaper than in Australia. According to the Average Salary Survey, the average annual income in the Philippines is $US5800.
"When I saw what the cost of labour was, I also saw the opportunity to bring it to Australia and the US," he says.
Yuill says that the number of businesses signing up to employ remote staff through Virtual Co-worker has increased 100 per cent each month since January 2012. "Our clients are typically SMEs and digital businesses," says Yuill, who adds that he saw a return on his investment by February 2012. "Some have up to three employees but I expect that will grow over time."
Working with remote staff has also had unexpected challenges. "There was a typhoon in the Philippines last week and that cause some power outages and internet challenges. Some of our staff were off for intermittent periods but only for short periods."
As more businesses in Australia and the US continue to demand workers from the Philippines, Yuill concedes that this will ultimately drive the price up. "There's an emerging middle class in the Philippines. I've been there half a dozen times now and there's no question, every time I go I'm amazed by the number of glass towers that are going up in the central business district. There is development happening all the time, there is free wifi everywhere, there are shopping centres with Prada and Rolex next to a Lamborghini dealership. When I go there, I see the future."
However, Yuill agrees there may come a time when the price of labour in the Philippines is no longer appealing. "Yes that will happen, but not for a number of years. And when it does we'll just have to find the next market."