Interview with Gavin Hodges
Leveraging offshore talent to grow business isn’t new, in fact it is a highly mature industry supporting a huge array of Australian small businesses. Like any business initiatives, it has its challenges and risks.
Since most people decide to get a VA and outsource when they’re at their busiest, they simply don’t have the time to hire and onboard them effectively. And without the proper onboarding, virtual assistants are destined to underperform.
In this interview, Joshna Daya speaks with Gavin Hodges at Yoonet about using a framework so you can leverage offshore talent to improve your business performance.
Joshna: Well welcome, everybody. And thank you for taking some time out to watch Momentum Talks. I'm Joshna Daya, Director and Co-Founder of Your Business Momentum. Today, we have Gavin Hodges from Yoonet. Welcome, Gavin.
Gavin: Thank you. Pleasure to be here.
Joshna: It's wonderful to have you here today, Gavin. So to kick off, we might just start with a little introduction to Gavin. Gavin joined Ben and the Yoonet team in bringing more of the business process improvement and automation solutions to our clients. Prior to joining Yoonet, he was a director of a large diversified civil, commercial and property development business for over a decade. His skills lie in understanding the multifaceted nature of business operations at a scale and the unique challenges that are faced by owners in attempting to grow while managing the inevitable cost escalation in the Australian context. So once again, Gavin, thank you for joining us.
Gavin: Pleasure to be here.
Joshna: The purpose of Momentum Talks is to share valuable content with business owners and to introduce you to specialists who can help you overcome challenges in your business? So today, we're going to talk about how to leverage offshore talent to improve business performance.
I'm going to fire off a few questions to Gavin and get him to share some of these insights with us today. So Gavin, let's get started.
Question one, given what might be a crazy or an amazing statistic that's relevant to offshoring talent that others might not know about?
Gavin: Look, it's probably the general scale of the offshore industry. And obviously, for us, it's the Philippines context. The industry is massive. It employs about 1.2 million Filipinos, generates about $25 million annually in terms of revenue to the Philippines. And the scary statistic is that it's expected to double by the end of 2020. So if you want to see the power of compounding, I'd suggest you have a look at the growth of the BPO industry in the Philippines over the last decade, it's massive.
And what's probably more pertinent to our context is that Australian business is actually the second largest consumer in the Philippines business process outsourcing services in the world, second only to the US, which is a when you consider the respective relative sizes of the respective economies. It's a pretty big number. It's a very mature industry, and certainly growing from the Australian side, and good 97% of businesses in Australia, employed less than 19 people. So I think it's fair to assume that there's a lot of SMEs taking advantage of the offshore approach into the Philippines. And it's certainly one that a lot of having great success with.
Joshna: Gavin that some pretty impressive stats there, I guess, you know, for me, it's all the point is to the fact that you know, this is such a growing area, and why as small to medium business owners, we really need to be giving this some attention and looking at you know how we can leverage using offshore talent.
So what would be from your perspective Gavin, you know, the two or three major problems that arise for business owners who are looking to outsource staff?
Gavin: The biggest challenge we come across in it, and it all ends to, we're really focused on sustainable offshoring. A lot of people get excited about offshoring, they see the arbitrage and labor costs, they think, wow, I need a new account and why don't I go offshore and have a look?
And it works in some context. But the biggest challenges we find is the unstructured nature of the work that they're trying to outsource. So we're outsourcing or offshoring, used interchangeably in this context, really comes into its own is when there is existing digital business process or workflows established within the business that are robust, that are highly repeatable, and that rely on the system or the process rather than the person to execute.
So a lot of people do a lot of ad hoc type work, they don't manage necessarily how they going to task the VA, it becomes quite a chore and quite a challenge. Obviously, with the VA on the other side of the world, it can be a, you know, it has its own challenges. So to mitigate against that, now, the biggest benefit we see on the way to mitigate that is to really focus firstly on making sure that business is process or systems dependent by building a really good solid digital workflow. And then looking to the VA to execute that workflow because the workflow can be housed anywhere in our context, beautiful blanket, Philippines. But once it's there, it's then a matter of being able to task the VA to execute a very rock solid robust digital process. So mean, that's the number one challenge, people are just a little bit too unstructured in what their expectations are around execution.
So I think it's a good business process anyway, to make sure your businesses are systems dependent because it allows and it certainly increases the consistency of outcome. And it reduces the complexity of the person or the talent required to deliver, you can imagine an accounting process. I'm sure it's a familiar story for a lot of people out there that, you know, there's one individual that has a lot of the information or knowledge when that person's on holiday it goes away, it becomes very hard, it doesn't get done all the business owner steps into the process.
So getting the business into that mindset process and systems dependency allows the VA to excel because the tasks appropriately without a lot of on true direction, but also allows you to find, you know, the suitable talent, because you're not looking for very skilled, necessarily people, you're looking for great process people, people that can execute process consistently. That's the number one.
The other big area that we see, a lot of people struggle to save cost, they are allude by this idea that, "hey, I can get you Bible, it's not a cost saving process in our mind. In our world, it's about growth, and it's about reducing the cost of your growth.
So you can imagine in the context of an Australian business if you're looking to employ the next salesperson that could be a 60 or $100,000 decision. What we say is, "Well, hang on a minute, maybe we can be a bit more resourceful here. And maybe we can find process, maybe we can find an opportunity to turn that 60 or $100,000 decision into a $20,000 decision or $15,000 decision".
Not necessarily by employing that person, but by finding process that your existing sales staff, or some other person in that business that's doing high value work, we can take a lot of value stuff often and put that into a structured workflow administered by a VA, it becomes a growth discussion and allows you to make that growth decision as a business owner, without having to have this massive step change or this massive capital contribution or more a new system that you want to put in place, well, it may not to be, we might be able to get your existing system more resourceful. And by putting process about it and putting some VAs on.
Joshna: Okay, so what I'm hearing out of that, Gavin, you know, for people that are looking at outsourcing, you need to have number one your processes in place. Because when you do outsource, it's really important that whoever you're outsourcing to, is able to follow the process that you have in place to be able to get the efficiencies that we're looking for.
Gavin: Absolutely, efficiency is number one, consistency that comes number two, and what you don't want to do is you don't want to worry about, you don't want to push down on one side just to create a challenge somewhere else. So it's very much about making sure that the optimal labor resource is very much not taking up additional time onshore, just to manage, you've got to along the process to manage the person to really leverage the true value of offshore approach.
Joshna: It's a good point you're making there, Gavin, because I know often when we walk into a business, there tends to be total chaos. So often we see processes in people's heads where, you know, it might be a couple of key people with that understand how to do something well, but it's not documented. There's no systemization in any way. So for those types of businesses, I suspect it will be first and foremost getting your processes in order before you even look to outsource just so that you get some of those efficiencies and the growth that you're looking for.
Gavin: 100% I think you know, the beauty of the technology out there, though, in the world is technology is a really confusing space for a lot of SMEs. And it's an incredibly confusing space because there's just so much option.
So, you know, one of the things that we do internally as make sure that we have a select set of tools that we use to help businesses systemised and to build a process dependency. And but the technology is really the, it's what's leveraging the opportunity here, it's about technology. If you get the technology right, you can get a really good process in place, really repeatable. And that's a real focus. So the traditional BPO approach, I only need accountant, the BPO will find your accountant, all sorts of talent available from grads to tenure experience, you know, CPA is but it's the layer or the real layer that a lot of what's missing is this concentration on sustainability, making sure that you get the process right. And that's where the technology page comes in, to sort of support that process.
Joshna: Okay. And we might have touched a little bit on this before Gavin, but you know, keen to just get some insights from you on how business owners can use outsourcing to improve their business performance. What are some of the successes and things that you've seen?
Gavin: Sure. Well, I mean, I think there's a range of all sorts of different roles that work well in the VA context, the more complex the role, the more robust the system needs to be executed. But if we look at you know, the traditional one, probably the biggest that most people look to is the bookkeeping type world, largely because the world of Xero and QuickBooks and things like that sort of control for a bit of that complexity, you know, you're administering a really robust cloud based system. In any case, where the challenges around, say bookkeeping, how do I get the invoice into the system? How do I task my VA that "Hey, I've got a new email, I've got a new invoice. I've got a new timesheet" whatever the process happens to be. Certainly, bookkeeping is probably by far the largest sector or section of the offshoring industry, certainly in the Philippine content.
But there's other areas to a lot of marketing, you know, if you've got some, you know, you're running a lot Google ads or you're running a little bit top communication, around developing ads, all those sorts of things. This is also a skill set. We have AutoCAD operators that do 3D renders for clients. We have businesses that do all the quoting. So acquired, or request for quote will land on onshore, offshore it goes, there's a bunch of process around and building out that quiet building at the marketing material to support it, and then sending that on direct to the client. So any process that requires sort of anything can be developed into a bit of a following the bouncing ball talk mentality, is ideal for offshoring. So anything that's repeatable, that's high value, but time consuming, is kind of the three things you need to get.
Things that don't work well in the VA world, the client facing roles, so anything that's really client facing or client interactions, not so good, requires a lot of time, energy, and effort into the talent to be able to get a really good result there. So mostly it’s around backup office type process, everything from accounts through quoting through to CRM administration.
So we see a lot of small business have great technology, but they're so busy, they can't actually leverage the technology because they get the new CRM in there, like, keep it updated for the first three or four months, everything's going well. And then of course, they get busy and the processing behind that the clients get duplicated the, you know, missing data, that the whole benefit of some of these systems and roads, because the data isn't kept up to date.
So anything involving CRM, entrepreneur resource management, around context and things like that, really well suited to the VA world. And now there's all sorts of other more knowledge base roles, but for us, certainly in an SME context, stick to the highly repeatable, still high value, and they need to be done. But you know, there's a lot of it because when there's little height volume, that's when you get the real life problems.
Joshna: Okay. So, if I just pull some key things out of there Gavin, I heard you say, outsourcing for mainly back office type functions, things that are high volume, and repeatable.
Joshna: Okay, beautiful. So Gavin, it's probably a good time for you to maybe just tell us a little bit about the outsourced services you provide and you know what Yoonet is known for.
Gavin: Sure. Now, there's really two areas. And we've touched on earlier that the assistance in the development of the technology to support the VA. So we provide services around building digital workflow. So assessing an existing process, remapping that into a digital process and then obviously finding the labor that's appropriate to execute that process. So we have quite an established recruitment process that we go through, we have great access to talent.
One of the other staggering statistics of the Philippines is that half of the population is on the age of 23. So there's this enormous growth is hundred million people at 16 million people under the age of 23. Becoming a very well educated English as a first language. So English is an official language. So you got great English, you got a two hour time zone, it's the same time zones.
Joshna: Okay, beautiful.
Gavin: Looking to sort of get into there, so we have some really good recruiter channels, we find the right person, induct them into our business into our clients business and then support the client on the journey of developing the VA.
Joshna: I know certainly in our experience, Gavin, of using VA support now for about 10 years. The icing on the cake is just they're such beautiful people. They really want to be a part of something and you know, they give off their best. That's only been in our experience.
Gavin: Yeah, I think that's true. The majority of the Filipino population, I think it's just the nature of you know, their very excited to have a great opportunity, BPO work for the Filipino was a really, it's where you want to wind up as a young person coming out of university, very sought after. So you get great, great talent, they are very appreciative of the job. They are and they just the general demeanor is just a very happy, contented bunch. So it's a very different context than Australian context, certainly my experience at least, and there's a lot about it.
Joshna: Beautiful. So Gavin, if we've got anyone listening to Momentum Talks that have questions, how could they best reach you?
If you are interested in finding out when we do have more Momentum Talks, and this is where we interview industry professionals, subject matter experts to provide something valuable to you.
Thank you again, Gavin and thank you to our listeners out there and until next time, all the best.