Accounting technology is driving change and erasing geographic borders. It’s giving you the ability to work with clients from anywhere in the world. It’s also giving people anywhere in the world the ability to work with you.
Before you dismiss out of hand the possibility of taking your accounting business global, or hiring staff in overseas locations, let me share some of our experiences. The backbone of our success at Digit is the global team we’ve built since starting our business. When we first designed our business model, we made a conscious decision to engage and build our team with the best people we could find – anywhere in the world.
Our team of accounting professionals works with businesses ranging all the way from startups to midsize firms. Over the last few years, we’ve heard all kinds of opinions from people in industry, and also business owners, as to why offshoring doesn’t work. The objections tend to follow similar themes, and fly in the face of our own direct experiences growing Digit. It’s worth dissecting some of these myths, and busting them.
First, I’ll cover three common myths that may be holding you back from building a global accounting team. Then, I’ll share some of our best tips for how you can started.
Three Offshoring Myths
1) I’ve Had Bad Experiences Before
Whenever you hear this, consider where this belief comes from. Typically, it’s from two types of experiences – a view formed from a) experiences with other providers that have global teams, or b) from direct experience hiring people offshore.
- Experiences with other businesses that have global teams: If you’ve ever called a large enterprise that has an offshore support team, you’ll know how this story usually goes. You just want help, so you call up, and explain what you need to someone who keeps mispronouncing your name. With growing frustration, you finally outline what you need help with, only to be told apologetically that that person can’t help you, and you need to speak with someone else. A call transfer, and 15 minutes on hold later – you go through the whole process again only to be told that you can’t be helped. Rinse. Repeat. This frustration often stems not from the person on the phone – but from how they are trained and empowered to help you. You see, it’s not that the person is offshore that bothered you, it’s that they couldn’t solve your woes. And that’s a clear distinction. Most people don’t mind who helps us (I’d like to believe that we aren’t inherently xenophobic), all we ever want is our problem to be fixed. When it isn’t, we get frustrated, and can sometimes associate those feelings with the person on the other end of the line – their accent and cultural identity. Poor processes and training are often the source of our bad experiences that inform a view that “all offshoring is bad” – when the truth is quite the opposite. An empowered team makes location irrelevant.
- Experiences in hiring people themselves: Typically when we hear someone say, “I tried using people offshore myself and it failed,” we need to ask why it failed for them, and dig a little deeper. What we’ve seen is that often the experiences people have had are with VAs (Virtual Assistants) working from home and hiring people on freelancer websites. Not to paint people with the same brush, but for many business owners typically the motivator in looking to outsource a job is in finding the cheapest price possible … and that’s it. If you aren’t willing to invest in your people, train them, support them, and invest in the same long term mentoring relationship that you would have with someone sitting in your office – you’ll fail. And many people do. There’s often a gap between expectation and results, but that’s not to say good results aren’t possible – you just need to do it right.
2) Offshoring Is All About Getting Things Done for Cheap!
Whoa, Nelly! While costs are one factor when resourcing work, making a decision to outsource based on cost alone is the wrong way to approach it. Remember those bad experiences people have had in the past? Typically they’ve been because price is the only driver in the decision to outsource.
When done correctly, the costs are closer to what they would be if you did the work locally. Why? Well, there’s a significant investment required in IT infrastructure, training, great processes, and communications.
When you set up a business locally, you still need to invest in training and supporting people. Offshore is no different, except the costs are multiplied by distance. Things like cultural training and constant support are critical to success, yet often overlooked.
It’s natural that with this communications and training overhead, you’ll lose some efficiency (there are only so many hours someone can work in a week – unless you like having employees resign on you for not treating them as people).
We often see people advertising fees of $5-$10 an hour to get work done. It’s like the adage, “If you pay peanuts, you get monkeys.” If you want to build a sustainable business, it requires investment, and with that the costs are significantly higher. Expect to only be saving 20%-30% on local rates.
So if price isn’t as “cheap” as you would think – why offshore? Two words: scalability and sustainability.
3) Nobody Knows Local Business Like Local People
This is our favorite objection, simply because it’s something we’re passionately challenging at Digit.
Within the accounting field, there are three factors that lead to quality outcomes for business owners: 1) knowledge of local accounting standards, 2) knowledge of local business, and 3) understanding local culture. These allow advisors to understand the context of each business and work toward the best solutions.
In Australia, for instance, that knowledge might involve an intimate knowledge of Business Activity Statements (and other compliance requirements), local suppliers (and what they sell), and knowing that we say “yeah, nah” as a filler when acknowledging what’s been said but having a follow-up point.
All of those things can be learned. Given enough time and experience, someone in another country can learn more about accounting for local businesses than a local.
We see this day to day within our business.
We recently advertised for a payroll position at Digit. Part of our hiring process involved a written test for applicants. The test covered general payroll knowledge but also included arcane cases and trick questions that would trip up even the most battle-hardened payroll expert.
We gave the test to two control groups – our team in Manila, and owners of some of the top bookkeeping firms in Australia. We then gave the test to applicants in both Australia and the Philippines who had more than 5 years of payroll experience.
The results were startling. Out of 45 people who completed the test, 3 of the top 5 were from our Manila team. One was a fellow firm owner. And the last? A Filipino payroll specialist who is now part of our team.
You might think that ”Nobody knows business like a local,” but the truth is, anything can be learned. In a global economy, it would be shortsighted to assume that given time and experience, people around the world can’t learn to do what you do – maybe better than you.
3 Tips for Building a Global Accounting Team
In a world evolving rapidly through technology, that enables us to work from anywhere – the question to ask is: What is stopping you from having people anywhere work with you? Offshoring isn’t the sum of the bad experiences you or others may have had in the past. And it might just be the best possible way for you to build a sustainable business in our global economy.
Building a business through offshoring is a growing trend, but there’s a right way and a wrong way to go about it. Here are three tips to build a successful global team, based on our experience in growing Digit.
1) Have the Right Infrastructure (and Partners on the Ground)
There are many traps and pitfalls when hiring in another country – often unforeseen. Floods, brownouts, earthquakes, strikes, wars, corruption, red tape, flaky internet, and a million other things can unravel your most carefully laid plans. Unless you plan on being permanently in the country to manage your remote team (which is kind of self-defeating) you really need a partner who knows how to navigate the local business environment.
When we first started Digit, we partnered with a BPO (Business Process Outsourcing) firm to build our team. They provide the office space, power, high-speed internet, computers, IT support, HR support, payroll department. They are our team on the ground that makes sure we can focus on what we do best. We pay an ongoing fee under a management agreement.
While it’s not cheap (we pay a fee per seat per month) – it takes the headache out of scaling as we grow. We need more space? No worries – they will spend their weekends moving us into a larger area. We need new team members? They follow our recruiting processes and pre-screen candidates. Two businesses, and 7 years on, they have been our bedrock.
2) Find the Right People
If you’re going to build a business with a global team, then you should start with an open mind regarding where you will find the talent you need. The first decision should never be, “Find the people who are cheapest,” but “Where in the world are the best people for my business model.”
The kinds of questions you should consider fall into a few broad categories:
- Timing of your work. How do you plan on working with your clients? Where are your clients located? Is being available during business hours important? If so, is it important to have people close to your time zone or can you work around it? Is the work you’re looking to get done transactional and not time-dependent? Can people in that country work your business hours – and what does that mean for them and their families? Working night shift might be fine while people are single, but you may end up limiting who will want to work for you by the simple fact of when you need them around.
- Communication (and accents). Is communication important in your work? Do you need excellent verbal English? Written English? Does your team need to take calls? These considerations go both ways. Your team’s ability to communicate with your clients and be clearly understood, as well as how well they can understand and interpret what your clients are saying, are both critical. We have a fantastic Scottish client who for the life of me I cannot understand. Bless him. These things are worth thinking about.
- Education and experience. What is the education system like in the country? What is the size of the workforce for the particular type of work you are looking to resource? What experience do people have with firms in your country, or in dealing with businesses globally? When I had a business app development studio, my team was based in the Ukraine (more on why later). What fascinated me was the fact that most people had at least two degrees. I remember chatting with the sales team one evening over vodka and Salo only to discover that they all had their masters in economics. Don’t ever confuse price with education.
- Culture. What is the work ethic of the people? What are the cultural considerations that you need to be aware of? One of the reasons I had my development team in the Ukraine is that I valued honest feedback above all else. As a developer, I wanted to be able to take a scope for a project to the team and have them tell me, “That’s a terrible idea, this is what we would do.” So I deliberately chose a location where people had the attitude I wanted, that would create the best outcome.
For all the reasons stated above, Digit decided to build our team in the Philippines – a country within our time zone, with an exceptional work ethic, family-driven values, well educated people with global experience, and strong fluency in English. Despite research visits to Vietnam, Thailand, Malaysia, and other countries in our region, we’ve never looked back.
You might notice that I haven’t mentioned costs. Decisions around economics and price should always come after you’ve considered everything else.
3) Invest in Them, and Keep Investing in Them
Now you have your first team member working for you remotely. And now the hard work really begins.
I’m always amazed by how often I hear people talk about how offshoring didn’t work for them. And when I ask why, it’s typically because they’ve treated the other person as a cheap resource, and not invested in them for the long term. Not enough support, and poor processes. The reality is that building a global team takes a lot of hard work.
If you think about it, it’s no different from building a business locally. When you hire someone locally they have the benefit of seeing you, hearing you, following your non-verbal cues, connecting with you, asking you questions, spending time with you and modeling their behaviour on your expectations. With a remote team, you have to fulfil those same needs – except with the additional layer of cultural differences, language barriers, and physical separation stacked on top. Having a strong company culture is critical – as is visiting your team regularly (you’d be surprised how many people don’t).
The most important aspect of it all is how much time and energy you put into empowering them, educating them, supporting them, and helping them succeed. The most powerful advice I can ever give is to treat your team as fellow humans, and not as remote resources.
One of the most fulfilling things we’ve done is spend time with our team doing leadership training, flying them to Australia, spending time with them in Manila, and treating our business as ONE team of people, one culture – regardless of location. Get that part right, and you’ve got yourself a scalable business built on a group of people from around the globe who truly love what they do.