Mar 2023

Problems With The Offshore Labour Hire Model

By: Odyssey Outsourcing
Tags: australian accounting, labour shortage, Offshoring, Outsourcing

I spoke to the director of an Australian firm last week who had staff resource issues, and he’d indicated he had both bookkeepers and compliance staff in an offshore location. He’d had these staff for a couple of years and had trained them up in both SMSF and compliance (company, trust partnership, sole trader and individual returns).

This firm had 125 SMSF’s and all was going well. They’d invested the time to go over to the Philippines to train these staff, spent scarce manager time reviewing their work and upgrading their skills, engaged with them as team members through remote chat programs, invited them to Australia for key company events, and had made the investment much as they would for any Australian accounting employee.

Whilst this all sounded like a great option at first, the Australian director noted that he’d found the fatal issue with this offshore labour hire model. It’s likely no surprise, but similar to an Australian accounting employee, there are issues of turnover. This Australian accounting director had lost 2 key resources (out of the 2 key resources) as the staff had married and moved away from the Philippines office.

So let’s go over the 3 main issues why offshore staff leave:

• Their personal life situation changes, and the job no longer suits them.
• They are poached by another firm, leading to a continual remuneration battle
• The work is no longer fulfilling: they’ve reached the limit of what they can learn within the Australian accounting firm, and want to move on to learn different things.

One option may be to allow the staff to continue to work remotely from their home, though this invariably only puts off the inevitable departure of the staff.

These are just the inherent limitations of the offshore labour hire model. There’s really no solution to staff turnover when staff are engaged in a full-time model.

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