Derek Gallimore, Founder of Outsource Accelerator, Shares Hacks to Overcome The Challenges of Outsourcing

Yeah, absolutely. You’re right. It’s 99% of businesses across 99% of sectors. Even if you’re a plumber or a gardener or landscaper, you might think, “How do we outsource jobs that require a physical presence?” That’s true. But in those industries, for example, you can still outsource your sales, marketing, customer support, logistics, and all of your back-end accounting. Basically, almost every job in almost any business can be offshored. A simple way to think about it is if you’re doing work in front of a computer, that can be done from any location around the world. For plumbers or builders, who need to be on-site, that’s different, but you can still separate out tasks that don’t require being on-site and look into outsourcing those tasks specifically to offshore locations.

We talk to about 500 inbound inquiries a month, and we speak with a lot of businesses. They’ve heard of outsourcing but aren’t sure how it works. I try to bring it back to basics. Generally, I say, “Look, think of outsourcing just like employment. It’s no different than hiring employees in the US or wherever you’re located.” The way you build efficient processes, structures, departments, responsibilities, OKRs, KPIs—making your business more efficient—all of that still applies.

Whether you’re bringing in junior people, senior people, execs, part-timers, students, or interns, all of that can apply offshore. The only difference is that they are sitting in a different location. Because of that different location, there may be some communication and cultural factors to consider, but otherwise, the basic principle is the same: How do you build your business efficiently? How do you scale it? A lot of these things apply across the board.

Yeah, look, I won’t beat around the bush—so many people are really disappointed with offshore staffing. There’s that common stereotype about call centers, where you get a strange accent and the service is poor. There’s a big hangover and a negative preconception about offshore staffing. Tim Ferriss has done a great job popularizing virtual assistants, but there’s still this perception issue.

It’s almost like, in the US, you think of Wall Street, and that’s very different from the college student working part-time in a pub. If you’re looking for a part-time student at a pub, they’re not as reliable, not as qualified. They can be, but they often aren’t. It’s about coaching people to set proper expectations.

Some people come to the Philippines, and they think saving 70% isn’t good enough. They ask, “Why not save 90%? Why pay $5 when we could pay $2? Why not push it down to $1.50?” I try to take people back and remind them: there are a lot of people in the Philippines, but education levels and general capabilities are not the same as in the US. So, you need to aim for middle or above in terms of education, capability, and experience. You’ll still save 70% and be comfortable with that. Don’t push for the extremes, because, sure, I can get you illiterate farmers for $1 a day, but that’s no good.

Get great people on board, use professional services, and you’ll get incredible, reliable, scalable talent—people who can grow into teams and do amazing work.

Yeah, absolutely. So, we list about 750 Philippine outsourcing suppliers on our website. Collectively, the industry employs about 1.5 million people—professionals who work in office buildings, you know, glass towers, and are super high-caliber people. There are also about 3.5 million freelancers and virtual assistants working from home. This is a huge industry, and it’s the single biggest industry in the Philippines, contributing almost 15% of the country’s GDP.

There’s everything from blue-chip, high-caliber providers down to home-based moms and VAs. So, whatever you need for your organization, you can come to our site, get three free quotes, and we can help you navigate the industry. But the best solution is really to be honest about what you need.

If you’re a startup and really tight on cash, maybe a home-based VA is right for you. But if you’re more of a mid-market business that needs reliable professionals who can scale, then a mid-market provider is probably the right choice. These businesses often have 25 years of executive experience and process improvement expertise. The Philippines now has 25 years of process optimization experience, making this an incredibly sophisticated industry. By choosing the right supplier, you can tap into all that knowledge and executive talent, even if you’re only hiring one staff member.

So, the best thing you can do is reach out and have a phone call with a few providers. You’ll learn a lot in the process. Hopefully, if they’re good business development reps, they’ll provide valuable insights into your business, how you can scale it, and how you can best build your team. So, reach out and have some conversations.

It’s huge. It’s huge. The whole it’s almost like oil for you know, United Arab Emirates. It’s, this is the industry powering the economy. And there’s, it’s an incredibly sophisticated industry and an incredibly sophisticated you know, most I’m sitting in a 51 story building. There’s incredible sophistication in the Philippines. There are many, many staff people in the Philippines that are Harvard graduates, Stanford graduates, and then also, the Philippines has its own Ivy League colleges as well. So whatever you want is all here. It’s not just, you know, the basic kind of functions.

Yeah, sure. So, look, this is where I come in. You’ve got the top end of the market—the Fortune 500. Every single one of them offshores, maybe 99% penetration. They’ve been doing it for 30 years, and the rich get richer and the big get bigger because they have access to these tools.

Twenty years ago, these tools weren’t available to small and medium-sized businesses, and that was due to technology and infrastructure. If you wanted to set up offshore, you’d need to develop your own systems, bring over the servers and hardware, and it just wouldn’t make sense unless you had a team of at least 500 staff. All of the Fortune 500 companies have been outsourcing for 25 years, and only in the last 10 or 15 years have smaller businesses started to get into it.

Tim Ferriss helped popularize the outsourcing model for smaller businesses, particularly for podcasters, solopreneurs, and entrepreneurs. They’ve really embraced the whole VA concept. Then, there’s the middle market—US businesses, for example, with between 50 and 500 or 1,000 staff. Very few of those businesses are outsourcing; maybe 0.5% of them. We did a study and found that there are about 60 million businesses in the high-cost English-speaking world, and only 0.5% of them outsource, compared to 99% of the Fortune 500. That’s going to change over the next 20 years.

So, who outsources? Everyone. We have Google, Facebook, AmEx, Citigroup—any major logo you can think of has a presence here with me in Manila. Twenty years ago, this was untouchable for small and medium-sized businesses. But now, with technology and globalization, it’s available to everyone. The key is getting the word out there, making people aware of this option, and helping them overcome that uncertainty and fear of taking the first step.

So, consecutively, there are 60 million jobs that are going to be offshored in the next 20 years, worth about $600 billion. And while not all of those jobs will come to the Philippines—though I hope many will—there’s also Eastern Europe and India in the mix. Over the next 10 to 20 years, we’ll see a leveling of the playing field, with a truly globalized workforce emerging.