Imagine what it could do for your profit margin if you were able to hire incredibly talented people for as little as $1,000 per month.
It’s easy to find low cost offshore workers, but it’s hard to find someone who is very skilled and can competently do everything you need. It’s a common experience to be frustrated with offshore talent. However, it is possible to find great people, which will give you a huge advantage over your competitors when you can build a great team at an affordable rate.
I’ve been hiring in the Philippines, and around the world, for over 12 years. I employ over 70 people in 28 countries working in my business. Some examples of the types of people I have hired:
- $520 per month salary – Marketing experts for link-building who are able to effectively get great quality links.
- $940 per month salary – High quality developers for PHP development. I’ve had more than one business friend surprised at the quality of their work. (Note: It is extremely difficult to find high quality software developers for $940 per month, however, it is possible. Generally speaking, you will need to pay a lot more to find a great developer.)
- $350 per month Salary – very fast researchers to research contact details for thousands of people online.
- $510 per month salary – An assistant to book all travel, make complex travel arrangements and also has my credit card details to make purchases on my behalf.
There are many more examples as well. Throughout the years I’ve developed many processes to make sure that we hire great people at affordable salaries. I’m going to show you the exact steps that I’ve followed to do this.
Where should you hire from?
The Philippines is a great option for a low cost offshore team. This is because Filipino people have an excellent command of English, they are generally loyal, and there is a huge contingent that is familiar with working for a foreign boss.
However, I don’t think it’s necessary to fixate on one country. I’ve sourced great people in lots of different countries. Generally, I think the Philippines is a good destination for support, recruitment, and lead generation because there are so many people there with minimal accents and perfect spoken English. Ukraine is a great destination for high-level developers. Here are a few more countries where I have found talented people:
- Mauritius – our head of support.
- Thailand – our head of product, he’s actually from the UK and living in Thailand.
- India – our quality assurance team lead.
- Poland (living in Japan) – our Systems Administrator.
Our development team comprises people from Ukraine, Belarus, Sri Lanka, Egypt, Bulgaria, Belarus, Russia, India, Thailand, the Philippines, Pakistan, Bangladesh.
The list of countries goes on and on.
Although there are countries with certain strengths, the more you open your mind to hiring globally instead of one single location, the bigger the talent pool that you can drawing upon, and the easier it will be to find great people.
Hiring in a central office or building a distributed team
There are number of benefits to hiring in an office. Collaboration is easier in an office environment. It’s also easier to manage attendance. There’s a certain amount of discipline required to get people to come into the office every day, but you can more easily manage their attendance. Our software, Time Doctor, provides a solution for this issue that shows you if members of your team are actually working or not.
Another issue of remote work is the quality of your employees working environment at home. Also, working from home can have many distractions, especially if there are young children in the house. In the Philippines, and other countries, there can also be issues with Internet speed, and the power supply to the house may not be stable. The largest cities, such as Manila, generally have very reliable Internet and power supply, but both can be unreliable in more remote locations. Even if your team is distributed and remote, they do not necessarily have to work from home. They can work from co-working spaces in whichever city they live in.
There are a number of benefits to setting up a central office. I’m a member of the Entrepreneurs Organization. One thing that I have noticed is that it is very common for members of the organization to do some form of outsourcing. Often, it’s hiring a company in the Philippines to manage a remote team in an office environment. However some of these companies also have a distributed team.
I run my business using a completely remote, distributed model. Here are some of the reasons why I think it is a very strong business model, despite its potential difficulties:
- It’s significantly cheaper to hire a distributed team than to set up an office. It can be up to 100% more expensive in an office when you consider the office costs, taxation, and that you probably need to use an agency, which takes their percentage margin.
- It’s much easier to find talented people if you are willing to hire from anywhere in the world. You’re now hiring from every single city in the world instead of just one city. This makes it a lot easier to find amazing high-quality staff at an affordable cost.
- If it is done right, your business can run more efficiently. For example, you will have less distractions as people don’t get caught up in unnecessary meetings. I have talked with fellow entrepreneurs who are incredibly busy and don’t have any time to get their important projects accomplished. Their teams are constantly coming up to them and saying, “have you got a minute?” It’s very hard to say no. I rarely have this issue because I am literally working by myself and chat to my team leaders only in scheduled weekly meetings.
Although it’s hard for some people to get their head around the distributed model, I believe that it is the best way to access very high level offshore workers at a low cost. There are a lot of obstacles to overcome. I will show you how to overcome these obstacles later in this article.
Do-it-yourself or agency?
If you choose the office model, then an agency may make more sense because you don’t want to have to set up your own office and comply with all the labour laws, etc. If you choose an agency, the most important thing to consider is how rigorous they are with their recruitment processes. Even if you are using an agency, you want to be involved, and make sure that you are highly selective when reviewing the list of candidates.
An agency is a good choice if you are hiring everyone into a central office. However, an agency has a lot less value if you’re choosing a distributed model with your team working in multiple locations. Most agencies you use to hire in the Philippines would have a margin of at least 30%. Would you consider using an agency with 30% margin on top of staff wages to hire a local staff member? For most small businesses, the answer is no. They simply cannot afford the 30% margin. So why do you really need an agency to hire offshore? I think that companies choose an agency because hiring offshore feels foreign and distant, and they feel like they do not know the steps involved. The reality is that the steps are a bit different, but can be easier to hire for a global remote position than it is to hire locally in most cases. This is because you’ve got the entire planet to choose from rather than just your city.
If you choose the do-it-yourself model, you are going to need to develop an in-house capability for offshore hiring. This might seem overwhelming, but it will be a significant business strength once you figure it out and get some experience.
What can you reasonably expect someone to do for you at a $1000 per month salary level?
This is a critical question. Obviously, the more that you pay the easier it is to find talented people with greater capabilities. However, you may be surprised at the level and quality of person that you can find in the Philippines for $1,000 per month if you try hard enough.
That’s really the critical component. You can’t just accept the first candidate who wanders your way. You will find millions of people in the Philippines willing to work for you for $1,000 per month. But most of them have a very low level of competence compared to the people you are used to hiring. You will end up with someone terrible if you’re not extremely selective and rigorous in your hiring process. If you’re very selective, and have the right process, you can find someone great.
In my experience here, are the types of activities that you can get someone to do at a cost of less than $1k per month:
- Software testing
- Lower skilled development tasks
- Travel bookings
- Online research
- Lead generation
- Customer support
- Data entry
- SEO (Link building)
Here are some tasks where I have had success hiring at $2-3k per month, but have a lot of difficulty hiring at $1k per month:
- Development: mobile, web, desktop
- Data science
- Machine Learning
- Legal work
- SEO strategy
- Project management
I know that salaries of 2-3k per month USD are relatively low for the developed world, and I’m not saying it’s easy to find someone at $1k, or even at $2-3k per month. It takes a lot of work to find someone suitable to fill any job position. Low salaries make it even more difficult. However, when you hire from the entire planet, it is significantly easier than hiring from one city. Your pool of candidates is vastly greater, and the potential is there to find someone excellent at a lower salary. I’m not advocating hiring for every position at low salary levels. I’m also not saying it’s possible hire for every type of job role or level of talent. I am saying that you should think about the salary level that you are hiring at strategically, and at a global level.
When you look at the global job market, there are massive differences in salaries between countries. Also, there are talented people across the entire planet. For example, you can find a very talented developer in Ukraine at a salary of $2,500 per month. This person could probably easily get a job for $100k per year if they lived in the Bay Area of California. Their salary has absolutely nothing to do with their skill level, it only has to do with the fact that they are working remotely, and local companies cannot afford to pay them the same rate as a Western company.
Some example salary rates in the Philippines
|Role||Salary in Manila in USD||Salary in smaller cities in USD|
|Bookkeeper with accounting qualifications||$500-900/month||$400-700/month|
Hiring Part 1 – Where to look
If you’re talking about hiring somebody sub-$1000 per month, there are a few options that I have found to be effective:
- Onlinejobs.ph – a paid job platform for the Philippines only. Salaries are listed in local currency. This site costs from $49/month to use.
- Outsourcely – a global hiring site which costs from $19/month to use.
- Upwork – a global platform which takes a percentage of the person’s salary, starting at 20% but it reduces as the amount you pay through their platform increases.
- Referrals – always ask your existing team or any other people you know if they have any friends who might be suitable for the position.
The more sources of talent the better, so I suggested posting jobs in as many places as possible to get the maximum number of candidates.
If you are hiring at a much higher salary level, then consider these additional options:
- Weworkremotely.com – this is a site run by the guys at Basecamp and it cost $200 to post a job. It’s only for remote jobs.
- Stackoverflow jobs – this site is fantastic for hiring high-level developers.
- Linkedin – obviously this is the most successful job site in the planet and it also works for hiring remote positions
Hiring Part 2 – Evaluating candidates
This is perhaps the most crucial part of the process. If you are hiring remotely, you can sometimes get hundreds or even thousands of applicants, because there is so much demand for remote jobs. This means that you really won’t have the time to interview everyone, and you can’t afford to have a slow process for evaluating candidates. An automated process is essential to make the whole thing work, especially for the initial part of the evaluation process.
I also believe that the best way to evaluate candidates is from a practical real-world test. This means that you give them a test which closely matches the type of work they will be doing in their job. This allows you to see if they can do it, or at least get an indication if they have the skills for the job.
The way that I do this depends on the job, but let me give you an example for hiring developers. Here is the process that I have used in the past:
Step 1: In the job posting, we do not ask them to “Apply” to an application link. Instead we direct them to a testing site to do a simple two question multiple choice test. This will collect their details, and then ask them to do a test.
One option for creating this test is Hundred5. Actually, developers kind of like to do a quick quiz, and some people will do it just to see if they can pass, even if they are not interested in a new job! We make the questions reasonably difficult, but because it’s only two multiple choice questions it literally takes them less than 5 minutes to answer. We can get over 1000 applicants if we are hiring for a PHP developer. We would expect around 25% of candidates to pass this test. This narrows the candidate list down to say 250 people.
Step 2: Next we ask for their expected rate of pay. We have a maximum rate in mind, and if they are looking for more, we ask them if they can accept our rate. We eliminate anyone who is looking for more than we are prepared to pay. This can take a fair amount of time, and we have a recruitment team of three people in the Philippines who manage the process.
Step 3: We briefly review the resume to filter out any obviously unqualified candidates. I personally don’t believe that reviewing the resume should be a huge part of the evaluation process because it selects people who are great at preparing their resume. Good developers are not necessarily good at presenting themselves, and may have a poor-quality resume. For some positions, the resume and level of previous experience is more important. Depending on the job role, I would be happy to even skip this step altogether.
Step 4: We give them a second, more difficult, test. There are a few options that we have for this second test. One is a paid test where we get them to do the first step in 10 hours of the actual work they will be doing on the job. Another option is to use a testing site such as Hackerrank.com, where you can send a very complicated test (I can’t even understand the test question itself!) and you know that anyone who can pass the test is very intelligent and able solve very difficult problems.
Step 5: The final step is an interview where we meet each other to get a feel for the person, and to see if they seem like a fit for our team. At this stage, we have mostly evaluated their technical skills and just want to get a sense for them as a person.
Step 6: Hiring for a one-month evaluation period. We usually try and hire two people for every job position. Why? The reason is that when you are hiring remotely, you may find that some people are not cut out for remote work They might have too many distractions at home, or there are all sorts of reasons why they can drop off and it doesn’t work out for them. If you hire two people, it greatly increases the chance of finding someone who is the right fit. You can also compare the skills of both people and see who seems like they will be better for the job. This is difficult if your applicants already have another job. In this case they might have to continue with their other job while working for you part-time on the side. It will take longer to get a feel for their skills.
I don’t always hire using this exact process, it does depend on the job role. For example, if I am hiring a developer who also needs to have great presentation and phone manner, I might ask them to record a video of themselves so that I can evaluate their level of spoken English as well as their spoken manner. Why a video? It saves me a lot of time. It would take a week to schedule 40 Skype interviews, but it takes less than 2 hours to review 40 videos.
I believe in the law of large numbers when hiring. You need to get many candidates in your funnel and then find a way to quickly and effectively filter them.
Paying your remote team
We have several articles, such as this one, about how to pay someone in the Philippines. There are lots of easy and low-cost options. Transferwise is generally the lowest cost, but PayPal and Payoneer can work, and there are also other options.
Communicating with remote team members
This can be a challenge if you’ve never worked with a remote team before. If you’re working together in the same office it’s natural that you bump into each other and start communicating. This means it’s less necessary to have a structured schedule for communication. When you’re working remotely, and may not have even met them in-person, you could easily forget that they exist. You’re busy and you may not make time to chat with them and get in sync. This means that having a structure for regular communication is essential.
Daily video meetings are essential in my view. Each team leader should have a daily meeting with all their remote (and local) team members so that they are in touch with the team, and are clear about their priorities and any obstacles in their way.
You also need to make sure that as a team, you’re constantly online with an app such as Slack or Skype, so that you have a way to get in touch quickly.
Other ways to stay connected
It’s important to do as much as possible to compensate for the fact that you are not in the same office together. It’s hard to develop deep personal relationships remotely, and meeting in person is a great idea whenever possible. We are organizing a yearly retreat in Bali for our entire company next year. We even have a weekly coffee meeting where two random people in the team meet for a virtual coffee break and get to know each other in a more personal way.
Software tools for remote teams
Productivity – Time Doctor is our software, and it’s really like the glue that holds together the remote team experience. It tracks time and productivity, making sure that everyone is working effectively and also makes sure your team are not getting distracted when working from home.
Video chat – You can use Skype, Zoom, Google Hangouts or Slack for this. There are lots of options. It’s important to use video communication as much as possible, and not just communicate via text and voice. This is especially important if the topic of conversation is something that could be emotional, such as some negative performance feedback. It’s good practice to conduct meetings with video chat wherever possible, as it ensures that everyone is more connected and focused on the conversation.
Screen sharing – this is where you can meet with someone and share your screen at the same time. It’s kind of like sitting next to the person and explaining something to them on your computer. There are lots of technologies for this, Skype, Slack Zoom, and Hangouts can all do this.
Screen recording – this technology comes in handy when you don’t have the time to schedule a meeting, and instead you want to share a quick recording of your screen and give a verbal explanation. You can record the video and send a simple link by email or text chat to the recipient so that they can view it later. You can also use it to send a message to your entire team. This is great for giving feedback on designs, for example. I use Jing and Snagit for this, but there are lots of other options.
Project management – We use Basecamp to organize messages for each team. Basecamp, the company, also has a remote team and their app is designed for remote teams. We also have used Asana, Jira and Trello. Other options include Teamwork, Podio and Wrike.
These are the most important tools that we use for remote communication, but we use over 40 different software tools in our company. Here are a few examples:
- 1password – for sharing passwords and securely storing passwords.
- Calendly – for scheduling meetings.
- Invision – for design collaboration.
- Klipfolio – this is a dashboard for the company statistics where anyone in the company can see how the company is going, and to dive into more detailed statistics.
- Knowyourcompany – this app has weekly questions, some business related and some personal, to keep our company connected.
Summary of how to hire amazing quality offshore workers for as little as $1,000 per month
It’s true that a lot of business owners have negative experiences with trying to hire an offshore team. They find that the skill level doesn’t match their expectations, and the low cost is matched by a very low skill level.
That doesn’t have to be the case. It is possible to find very high quality talented people offshore. It’s not easy. It takes a huge recruitment effort. But the benefit to your bottom line can be enormous.