Forty-eight percent of Australian SMEs are now either outsourcing work offshore or actively considering and experimenting with the concept, according to Dynamic Business, which published the results from a detailed analysis of offshore payments.
Views vary as to the reason why growth in outsourcing companies in Australia is happening. On the one hand, multiple sources cite the two obvious reasons as being high wage costs (coupled with significant wage inflation) and an ongoing shortage of labour. On the other hand the drivers are seen as the aspirations of Australian business owners to build better businesses.
Industry veteran, founder and CEO of Flat Planet Chris Moriarty also wrestles with the driver. “Quantitative drivers like high wage costs and labour shortages are obvious,” says Moriarty. “However, I think many business people make decisions based on qualitative drivers such as strategy and a general sense of aspiration for growth and development.”
Research shows that while quantitative drivers like wage costs and labour shortages are easily measurable and often cited as primary reasons for outsourcing, qualitative factors like business aspirations are equally important. These factors tend to focus on long-term goals such as scaling operations, accessing global talent, and enhancing innovation(The Hartford) (InsightsOpinion).
“To understand the real reasons that outsourcing companies in Australia are growing, you need to triangulate all these factors,” said Moriarty.
Business Intelligence is a good example of this need for triangulation. Many businesses would benefit from having a PowerBI analyst on staff to develop, build, and maintain real-time dashboards. However, PowerBI analysts are expensive and difficult to find in Australia. Entry-level roles attract salaries upwards of AUD 120k a year plus on-costs. For a mid-level PowerBI person, it is easy to imagine a total cost of employment at more than AUD 200k a year.
“Many businesses have no choice but to forgo a business intelligence capability because it is both unobtainable and too expensive, so it speaks to the classic quantitative drivers for outsourcing,” says Moriarty.
But what if the CEO can see a pathway to a better business by gaining access to such a resource? This is where qualitative drivers come into play. CEOs who recognise the potential for growth, efficiency, and innovation might decide to outsource key roles, like a PowerBI analyst, to tap into global talent while avoiding the prohibitive costs of local hires.
“When running a business in Sydney I was constantly frustrated by the tension between my ideas for what I could do versus the reality of what my business then could afford,” said Moriarty. “Having access to Filipino, Vietnamese, and Malaysian talent has meant I can do things that were previously not possible.”
Another good example is Organisational Behaviour. Businesses globally are wrestling with the issue of convincing work-from-home (WFH) employees to return to the office. Flat Planet is no different. Business imperatives around culture development, engagement, and productivity are making WFH less desirable, while some employees refuse to even consider any change or compromise. Many companies are trying to deal with this by issuing decrees and making ultimatums. They view it as a disciplinary issue.
By having access to highly skilled high-value Filipino talent, Flat Planet was able to take a different approach. “We have hired a full-time organisational psychologist to our staff,” said Moriarty. “It means we can deal with a complex issue like WFH versus a return to the office as a behavioural issue, not a legal or disciplinary issue.”
The result is a better business. It means Flat Planet can achieve better outcomes in a more sustainable way. Not only will we get our staff back into the office, but we will have an improved culture and workplace as a result of having talent in our business that can drive more sophisticated outcomes based on mental health.
“Building better businesses by gaining access to highly skilled, high-value talent ultimately trumps basic cost savings as the driver of outsourcing decisions by businesses,” said Moriarty. “Saving money is important and is also a great thing, but the growth of outsourcing companies in Australia is ultimately driven by the aspirations of business leaders to build the best businesses they possibly can.”
About Flat Planet:
Established in 2010, Flat Planet® is a family-owned, Australian-operated leading provider of high-value outsourced staffing solutions. Connecting businesses worldwide with skilled talent in Southeast Asia, offering a competitive edge through cost-effective, high-quality staffing solutions. With offices in the Philippines, Vietnam, and Malaysia, we employ over 400 staff serving global clients. Our state-of-the-art infrastructure and blend of local and Australian management practices ensure excellence in service delivery. At Flat Planet, we’re committed to creating pathways to a brighter future – not only by providing businesses access to a globally competitive workforce but also by supporting initiatives like our Gift of Life project, which funds critical heart surgeries for children in need.
For more information on how Flat Planet can empower your business while making a positive impact, visit flatplanet.com.au or email us on info@flatplanet.com
