It is not always easy to find offshore staff – hopefully, the following will help you.
How to Find Offshore Staff
Here are nine steps to finding offshore staff. Let’s look at in which country, what skills to look for, how to search and advertise, what screening questions to ask, who should see your ad, should you go for an individual or agency, how to shortlist, and then how to interview. Let’s go through those nine steps.
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Find Offshore Staff
Building your own team offshore – without a labour hire agency between you and your staff – is hard, much harder than hiring through an agency. Because when you build your own team you are alone. There is nobody who takes you by the hand. So in Part 1 and Part 2 of episode 363 will try to do just that – take you by the hand and lead you through the process.
Offshoring Options
But before we go through these nine steps to find offshore staff, let’s just quickly set the scene again. When you want to set up a team overseas, so no outsourcing but your own team, you have four options. The first two are the most common ones which we already spent a fair bit of time on in episodes 358, 359 and 360.
# 1 – Labour Hire Agency With Office
You can go to a labour hire agency like TOA, rent their staff and have them work for you in the agency’s office. That is what we covered in 358 and 360.
# 2 – Direct Hire
You find your candidates through word of mouth or an online freelancer platform and then they work for you from home, possibly with a shared office space to access when need be, but predominately from home. So that is what Charitha Wasala was talking about in episode 359
# 3 – Your Own Office Overseas
The third option is less common and more relevant for bigger practices. And that is setting up your own office. So not just a shared space you occasionally use, but a proper office. So you sign a rent contract, you put a manager in charge, you hire local staff who then work directly for your practice in your overseas office. You usually need to set up a company in that country and there is probably paperwork before you can rent office space and hire local staff as a foreign controlled entity. In some countries, there is more red tape than in others. So it definitely can be done.
The thing is it only makes sense when you need a lot of people. Because having your own office comes with a lot of fixed overhead. And hence doesn’t make sense for just two or three staff members, but makes perfect sense for fifty or hundred staff members.
# 4 – Labour Hire Agency Working From Home
And then the fourth option is to engage an agency’s staff but they don’t work in the agency’s office but work from home. And of course this distinction between working in an office and working from home is always putting lockdowns aside. And I have always been critical of this option because you combine the disadvantages of going through an agency with the disadvantage of working from home. So you basically get the worst of both worlds.
So these are the options you have. Now let’s focus on option # 2 – Direct Hire. For that you need to first of all find offshore staff. And so here is how you do that – How To Find Offshore Staff.
Find Offshore Staff
There are nine steps to finding offshore staff.
Step # 1 – Which country?
If you have personal or family connections to a low wage country, then set up your team in that country. So for example Charitha in ep 359 is from Sri Lanka, so it makes perfect sense for him to set up his team in Sri Lanka.
But if you have no connections to a low-wage country, then go with the Philippines. They speak American English, have an excellent work ethic, good values, direct flights from Australia and are close to our time zone – or if you are in Western Australia are in our time zone. So the Philippines are a very popular choice for offshoring from Australia.
Another factor is regional expertise. Different regions have different strengths. The Philippines are really strong around call centres, admin support, accounting and financial services. India is also a strong contender in this area. While for hardcore software development, you will probably go to Eastern Europe, India and before 2022, Russia. For creative work Eastern Europe around the Mediterranean is really strong. But of course you find strong contenders in any country. And I haven’t mentioned South America or Africa, and I am sure there are also regional hubs of expertise.
But for accounting staff go for the country that you have connections to, and if there are none, then go to the Philippines. With Vietnam the language barriers might be higher since English is less prevalent than in the Philippines. And with India and Sri Lanka, the time difference starts to bite. It can still be done, but 0 to 2 hours of time difference with the Philippines is just a lot easier to handle than 4 or 5 hours with India or Sri Lanka – 4 or 5 hours is already half a day.
Step # 2 – What Skills?
The next question is the skill set you are looking for. And that is basically the same as if you were hiring in the Australian market. You need to know what you are looking for.
Make a list of what needs to get done and what skills are required for that. Focus on the two or three most important ones. And don’t look for a Ninja, don’t look for somebody who can do everything. When you hire overseas, scale it down just a fraction to allow for ‘Lost in Translation’. Be prepared to do more training.
Step # 3 – Where To Search?
This is where the music is. Where do you look for your people? You have two places to look for.
# 1 – Word of Mouth
The first one is word of mouth – other Australian accountants with teams overseas. Get them to ask their offshore staff to make enquiries among their friends. Accountants in the Philippines know a lot of other accountants in the Philippines. So ask your friends and colleagues who have good offshore staff in the country you want to be in. But if word of mouth doesn’t bear any fruit, then you go to Plan B.
# 2 – Upwork
Your Plan B is Upwork. Upwork.com to find offshore staff. Upwork is an online freelancer platform for professional services where you can find a lot of accountants. Most current and past TOA staff are on Upwork. There are other platforms out there. Upwork is not the only one. For example there is Freelancer.com which was started by a guy in Sydney, but I would just go with Upwork.com.
Step # 4 – How to advertise?
So now the question is how do you attract the talent you are looking for. And of course in general it is just like a job ad on Seek in Australia. But some things are slightly different. You start by registering as a business on Upwork and then you create a job ad. Describe who you are looking for and what you offer. Like a job ad in Australia. And what you say in your ad of course depends on the role, but here are five things I would mention.
# 1 – Country
If you are looking for somebody in a specific country, say so. You will still get applications from other countries, especially India, but if you want somebody in the Philippines say so. For some roles it doesn’t matter. If the person you are looking for can work independently from the rest of the team, then location doesn’t matter. But if you already have a team or this is going to be the first team member of a larger team to come, I would put some thought into where you want your team to be. And I would highlight this in your job ad. It helps you stay on track and you get less applications from other countries.
# 2 – Role
List the job title. So for example an Assistant Accountant, Senior Accountant, Accounting Supervisor – give the child a name. Describe the role. What needs to get done. Who will support them, who will report to them and so on. Just like when you write a job ad in Australia.
# 3 – Software
List the software you work with. So Xero or MYOB or Quickbooks or BGL or Class for example. And it is an ‘or’ and not an ‘and’. Don’t list them all. List the one they really need to know. Because most accountants on Upwork have worked with many different accounting softwares. But you don’t want somebody who knows every software just a little bit. You want somebody who lives and breathes that particular software. And that’s why you need to be specific.
You can also list your other softwares like your document management system, – FYI or SuiteFiles for example – but I wouldn’t make those the focus. The main thing is that they know your accounting software inside out.
# 4 – Availability
This is really important. List what time of the day you need them. A lot of agency staff work on Upwork after hours in the evening. And if you are happy with evening hours, then say that, because it widens your net of potential candidates. But if you need your staff during the Australian day time, then say so. You still get applications from people who already have a day job. So that is something you really need to flush out later, for example through the screening questions. But for now just say when you need them.
# 5 – Australian Experience
Specify whether you want them to have worked for an Australian Accounting Practice in the past and how long that ideally would have been, for example at least two years. You still get applications from others, but it’s good to already list what you are after.
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And then of course you need to sell yourself – that is the same as in Australia. You need to sound like somebody good to work for. So: competitive wage, support, training, personal growth, career progression, flexibility – just some examples. Maybe there are slight cultural differences between countries, but in the end we are all human. We all need money to live but beyond that we want to have a purpose and feel valued.
So that is your job ad.
Step # 5 – What screening questions?
After writing your ad, Upwork will ask you whether you want a cover letter or screening questions. So depending on what you choose, the candidate will either need to attach a cover letter or answer your questions. Always choose screening questions. They are a lot more effective, because they allow you to really hone in on the important points. If you choose cover letter, then the candidate will just attach their CV and that CV most likely won’t cover what you really want to know.
So always choose screening questions. Ask about the three most important things they need to tick. For example:
- Can you work during Australian / Philippines day time? or;
- How many years of experience do you have in Class? or;
- How many hours per week do you spend on Xero payroll?
- Or can you implement STP2 for us?
Just examples. The screening questions really depend on what the core competencies you are after. The important point is to choose screening questions and not a cover letter. And to focus your questions on the most important things. And then just before you publish, Upwork will ask you two more questions.
Step # 6 – Who can see your ad?
Upwork will ask you is who can see your ad. Whether anybody, or only people registered on Upwork or only freelancers you specifically invite. Choose only freelancers on Upwork. If you tick anybody on the internet, you get spammed. So don’t say anybody on the internet. And if you say only invited freelancers, it means you have to go through profiles and look for candidates and invite them and then it might be an outdated profile and they are no longer looking. And all this is very time consuming with little result. So choose any freelancers on Upwork.
Step # 7 – Individual or Agency?
And then the last question Upwork will ask you – of course there are more questions, we have skipped a few that are self evident – the last question is whether you only want individuals or also agencies applying. Say only individuals. You don’t want applications from agency staff.
A lot of agencies advertise their staff on Upwork. Especially in India but also in Eastern Europe. So not like TOA where staff sign up privately and work on Upwork without TOA knowing. But instead the agency actually puts the profiles up.
And the profile might be of a past staff member and they just continue using that profile. So the person you speak to for the very first time might not be the person whose profile you were looking at.
You might be open to agency staff, but my advice is to avoid agency staff. That is the whole point of hiring your own team. To avoid the middleman. So choose ‘Only individuals’.
And then you post your ad.
Step # 8 – How to shortlist?
So now you get applications in Upwork. You probably get around 30 to 50 applications – but not all of them meet the criteria you listed. Most of them won’t. They will be from a different countries, or different availability or different software focus.
So now you need to shortlist because of course you can’t interview everybody. Look at the following seven criteria.
# 1 – Country
Delete everybody who is not in the country you are after. For bookkeeping staff, I only look at people in the Philippines. It is just a lot easier when they are all in one country. But you might have a different view. You might be happy for them to be in different time zones or countries.
# 2 – Screening Answers
Next look at their answers to your screening questions. From the answers you get to your questions you can already tell a lot. How much effort did they put into their answers? Did they actually answer your question? And is the answer what you are after?
# 3 – Ranking Scores
Ranking scores are a good first indication. If a freelancer has a score below 98, that is a warning sign. Because clients usually are nice and give 5 stars and if they don’t, that is a warning sign.
Whenever you close a job because it is finished, Upwork asks for two ratings. The first one is confidential and the second one is public. So the ranking score is mainly based on this confidential rating and not the public one, hence a good indication.
Look at how many ratings those scores come from. Five stars from 100 ratings are really strong. Five stars from one or two ratings are kind of meaningless on its own and we will cover later here why that is.
# 4 – Agency
If you ticked only individuals before you posted your ad, you shouldn’t get any applications from agency staff. If you missed this one, you can see the agency connection in the lower right corner. So if there is an agency connection listed, delete that candidate unless, of course, you want to work with an agency.
# 5 – Hourly Rate
And then look at their hourly rate. If it is really high, drop it. If it is close to what you offer, keep going. Keep in mind that the hourly rates in Upwork are in USD and Upwork gives you a really bad exchange rate and charges you a service fee of 5% if outside the US.
Look at the hourly rate the person charged on previous jobs. A good indication of how much room there is to negotiate.
# 6 – Profiles
So now you start honing in. After this first pre-selection have a look at their profile and see how much it matches what you need. Because applications often get tailored to what you want to hear. But profiles stay the same and hence tell you where the candidate’s focus and expertise really are.
# 7 – Reviews
This is the last step before the actual interview in your quest to find offshore staff. See what other clients said about this accountant. But you can’t take good reviews at face value. There are fake reviews on Upwork. A freelancer can set up a fake profile as a client, hire themselves for $10 and then leave a 5-star review. So you really need to question reviews. There are three ways to detect a fake review:
Fake Review Detection # 1 – Project Value
Look at the project value. That is the amount of money the employer paid to the freelancer via Upwork for that job. If that is a high amount, you can be reasonably sure that this is not a fake review. Because the higher the project value, the higher the Upwork fees. And a freelancer won’t pay hundreds of dollars in fees to get a fake review.
Fake Review Detection # 2 – Reviewer
Another way to find out whether a review is genuine is to look at the writer of that review. You can see their Upwork history, if they have already spent USD 50,000 on Upwork, you can be sure that they are genuine. If they have spent USD 100 on Upwork and this review is the only one they have done, then you are probably looking at a fake review.
Fake Review Detection # 3 – Number of Reviews
The more reviews a freelancer has, the more reliable the ranking. Five stars after 100 ratings is really strong. That freelancer doesn’t need fake reviews. Five stars from 2 ratings – there is a possibility that these two reviews are fake. Doesn’t have to be but a higher chance than with a freelancer who has 100 reviews. So have a close look at their reviews before you invite a candidate for an interview.
Step # 9 – Interview
This is now where the magic happens. Where the music plays to find your offshore staff. This is your last point of attack in finding a really good candidate. And your last point of defence in avoiding a lemon.
You chat with your candidate via the Upwork messenger app, but arrange to meet via Whatsapp, Zoom, Teams, or Skype. Invite them to the platform you usually use to talk with your team, so you know it works. This interview is really important. It gives you a lot of the information you don’t or can’t get from their profiles and their screening answers. Seven things to look for:
# 1 – Ease to set up a Meeting
How easy it is to set up a meeting already gives you a good indication of what it would be like to work with this candidate. Ideally, they can talk with you at short notice.
If they can get into the meeting room straight away, that is a really good indication that they have a proper setup, are reasonably tech savvy. But if it takes several backward and forwards to agree on a time, they can’t make the link work or their camera doesn’t work, then these could be the first warning signs.
# 2 – Availability
Finding a time to talk gives you a good indication of their availability. If you can arrange a meeting at short notice during the day, higher chance that they are available during the day.
But of course, you don’t know for sure just by that, they might step out of the agency’s office to take your video call on their mobile. So ask them about availability. Really drill down on that. How are they currently earning a living?
# 3 – Skills
Ask them questions about the area of expertise you need. Talk tech with them. See whether they can ‘talk the talk’. Ask them about a recent technical issue one of your staff had and see how they would have solved it.
Or just ask them a random question. For example, if you need them for payroll, ask them about STP2 or making changes after the payroll has been finalised for a year. If you need them for SMSF work, ask them about work tests, contribution thresholds, or re-contribution strategies. Drill and see what you get back.
# 4 – Working Space
This is something you don’t have to worry about with agency staff but you really need to sort this out for staff working from home.
Where do they work in the house? Do they have a separate office or do they work in their bedroom? You usually just see a wall behind the candidate or they even green screen the background so it is difficult to tell.
Do they have a desk and a chair? And if not, do they have space for a desk and a chair? All things you can’t take for granted.
# 5 – Tech
What laptop or computer do they use? Get the model number. Some freelancers have really ancient computers. If you skip this question, you might end up paying for it – if not by buying a laptop, then by bringing inefficiencies into the team. And then you also need to check whether they have a second screen. And if not, you might have to buy them one at some stage.
# 6 – Childcare
The next question is tricky to ask in Australia and hence also tricky to ask overseas, but it’s really important when your staff work from home and you have so little control over their working conditions.
And that is, do they have children? And if yes, how old are the children? Do they go to school? And if they are below school age, who is looking after them while they work?
The answer is usually that it is the mother or a sister who is looking after them. And you have no way of corroborating this of course but at least it tells you whether you have a potential issue.
If the staff member has young children and turns out to be less efficient than anticipated, then the lack of childcare is probably at least one reason.
# 7 – Agency
Agencies advertising their staff on Upwork are meant to disclose that agency connection in the Upwork profile, but some agencies don’t. They just advertise the person as an individual and there is no agency listed in the bottom right corner. You might be talking to a staff member of an agency or the agency owner, and have no idea that you are talking with an agency. It might be that the person you are talking with is the one with the best English and hence they do the interviews and are the point of contact.
Be wary of that setup unless of course, you are ok with an agency. For example for SMSF work. If you don’t have a lot of SMSF clients and you don’t really need to build in-house SMSF expertise, you might be happy to just hand the handful of SMSF clients to the agency and they run the whole thing. So it depends. But you need to know. So ask.
# 8 – Delegation
Is the person you interview actually the person who will do the work? So there is no agency disclosed. They tell you that they are doing the work. And then they don’t. They get somebody else involved. Make sure that the person you speak to is really the person who will do the work and not some cousin, sister, brother, wife or husband, or more likely a subcontractor.
And of course, this is more an issue when you outsource but not when you work with the person day-in-day-out.
But you know what? This can still happen to you – even when you have all your staff working in the office and don’t even offshore. Your in-house staff in Australia might be delegating repetitive tasks to somebody in the Philippines without you or anybody else in your practice knowing. And your staff’s argument might be, ‘well, they shouldn’t use me for data entry.
# 9 – Fake Profiles
And then the last issue is something you don’t encounter much for accountants but other skills like software development. And that is fake profiles, so the freelancer shows a fake name, fake photo, and probably also fake country. Why do freelancers do that? Either because they got some bad reviews in the past under their real name or they think that a different region will make them look better.
You work that out because they can’t do a video or audio call, and when you use Google Translate to chat with them in their local language, they don’t speak that language, and/or their photo looks like a model. But fake profiles are mainly an issue when you look for software developers and other skills, not accountants.
So these are the things you need to drill down into during your interview.
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So that is how you find offshore staff. The next step is to actually hire them, but how to hire and how to give your offshore staff access to your software and data and especially the ATO portal, let’s cover that in the next part – Part 2 of episode 363 – How to hire your offshore staff.
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