May 2020


Remote workers: Pulling the plug and impacts on profitability

By: Odyssey Outsourcing
Tags: ad-hoc model, Australian tax compliance, forex risk, offshore labour, Outsourced offshore

We’ve previously touched on risks that offshore labour services providers like to gloss over when selling their “cheap and cheerful” full time labour resources.

These risks include pushing the foreign exchange risk back onto the Australian accountant, wherein paying for the actual salary of a full time worker in foreign currency leaves the Australian accounting firm exposed to detrimental movements in the Australian dollar.

Then there’s the hidden costs such as finders fees (charging many firms for the same 5 employees they have available), the requests to fly to the offshore destination to train the staff, the requests for staff to fly to Australia so they can feel part of your team, the additional administration and review time of Australian based staff.

One more recent issue we’ve noticed with the “labour hire” which has come to light recently with home working is how to work through issues when a team member is offended or upset and pulls the plug on their laptop (or drops out of the zoom meeting).

The result is that you don’t know what they’re doing and when they are going to resurface. You’re likely going to be spending the rest of the day trying to find out.  When labour hire employees are working around other labour hire employees, then they’ll be able to talk to the other employees, and you’ll be able to at least call the labour hire centre to find out information on where they are. But once they are in a home environment, and you lose comms, then it’s over until they resurface.

So what’s the answer? The more mature offshore model is outsourcing, where the outsourcing company is engaged to complete a job, and not hire a worker. This pushes the risk of job completion back onto the outsourcing company.

And let’s face it, there’s enough business risk in Australia today, without taking on the offshore labour companies risks as well.

If you need help with a few ad-hoc jobs then drop Odyssey a line.

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