Mike Santos – Salary Disruption with Outsourcing

Derek: Hi and welcome to another episode of the Outsource Accelerator Podcast. My name is Derek Gallimore and this is episode number 155. So today I’m excited to have Mike Santos back of Phil. Exeq Search Solutions. We originally spoke to Mike back in episode 143. If you wanna get a bit of background in terms of the recruiter, headhunter and human resource space for outsourcing. In this episode, we talked to Mike a little bit of more focused on the BPO sector, a little bit on the availability of expats and executive hire. It is a really interesting conversation and I’m sure you will enjoy it. So if you wanna get in touch with Mike or know any more about Phil. Exeq then go to our show notes at outsourceaccelerator.com/155 enjoy.

Derek: Hi, welcome back everybody. Today I’m happy to be joined again by Mike Santos of Phil. Exeq Search Solutions. Hi Mike, how are you?

Mike: Hi Derek: Doing good.

Derek: Mike is a seasoned recruiter and headhunter. He’s been in the game since 2004 so he knows a lot about the recruitment space and of course our audience is outsourcing but such a big component of outsourcing is actually the HR and human component to it. So it’s very common for BPOs to have very close relationships with the recruiter such as Mike Santos. So thanks so much for joining us, Mike. I supposed just initially just introduce yourself and Phil. Exeq Search Solutions.

Mike: Sure. So basically I’ve been in recruitment since 2004 and it has been quite a while. So I cater to different industry mostly would be IT and then now I am the General Manager of Phil. Exeq Search Solutions. We cater to different industries, BPO, IT, Finance and all. So anything that companies would need help for their recruitment need, we’ll gladly help them.

Derek: Fantastic. And Phil Exeq has been going since about 2013 and we have a lot of mutual friends in the game and so you’ve done a lot headhunting?

Mike: Yes, it’s a small world.

Derek: It is. That’s pretty powerful within, certainly within kind of executive headhunting and also within Manila because it very much does rest on who you know and the networks that you can call on if you need people. So yeah certainly kind of a powerful tip there for one out there is listening. But, so our audience is people interested in outsourcing. A lot of this conversation might apply to people sitting out there on the west and I might put this question to you. Instead of people going to a BPO, if they want staff could they approach a recruiter like you and get themselves staffed whether they’re sort mid level administrative, mid level management and make an arrangement direct. Does that happen?

Mike: Well I guess no.  One experience I had actually in the past or you could say a little over two years ago, they actually helped a company set up their own office in the Philippines, they’re actually an Australian company. They actually wanted to set up their own office here and then I guess they had some issues and they were setting up local in terms of local entry. With us having the knowledge in terms of setting up a team they were suggesting, there are actually right now here in the Philippines or third companies who actually could assist you, in terms of setting up the business. No need for applying government permit and all. They’ll be the one to do that for you, they’ll be the one who actually employ your employee. So you could say functionally they’ll be working with you but in terms of the Admin task, payroll, HR, they will be doing it for you. You just need to pay them on a monthly based and then they’ll assist you with the manpower that you need. On my end, since we will be helping them out. We’ll be the one to do the recruitment. So it’s a give and take relationship. So they have been happy with a team of 5,2 years ago now they are around growing to twenty or more people now.

Derek: I supposed encapsulate that, there’s a lot different hybrid solutions now aren’t there. Previously it was just kind of standard BPOs but now, without being, I suppose well trying to avoid it but basically it can be incredibly complex to set up in the Philippines. It’s incredibly complex to incorporate, it’s incredibly complex to set up payroll and HRIS and things like that especially if you are a foreigner or foreign entity, not you know, least it can just take months or potentially years to do this so there’s a lot of intermediaries where they offer services such as effectively staff leasing or effectively they just put the staff within their kind of system and but they are torn in terms of purposes your staff. So there is that potential that people out there can work with recruiter such as yourself and so it is an essence a normal recruitment process and then they just get higher value entities. So do you see that as a potential, it’s obviously a lot cheaper than kind of outsourcing isn’t it than going with the full services BPO because you literally just getting people at the cost of their salary?

Mike: Yeah I mean it’s cheaper and it’s actually more convenient actually, no headaches in terms of the pay you need to do all of the paid works in terms hiring those people. It’s more convenient actually and yeah it’s cheaper. And at the same time you have actually more control about it in terms of hiring the people that actually, hiring the people that you want for your team, it’s gonna be easier, it’s gonna be under your control.

Derek: Yeah that’s right. It’s not uncommon because I started my outsourcing journey within the BPO but then eventually it’s not uncommon to, within BPO they basically manage all of the HR and hiring processes but eventually it’s not uncommon when as a client you’re in a BPO and you start doing your own recruitment and you might start with executives and get headhunters in because there’s more control over the process and you have more say in terms of who you’re hiring. So it’s kind of a natural progression isn’t it and as you say it’s cheaper. We do on our website actually have a comprehensive salary guide, I’ll get the link in our show notes. But if it’s salary guide showing comparison with Philippine Salaries versus the US, Australian and UK and obviously there is quite a stark difference there.

Mike: Yeah there is a big one.

Derek: Yeah and what amazes me is that salaries very so much in the Philippines like the multiply is so so big and the way I kind of suggest this is that salaries for entry level office jobs can start as low as kind of P 14,000 to 20,000, I supposed which is 300 to 400 dollars per month but then they can go up as high as effectively the best western salary there is whether that sort of a hundred thousand US per month because there’s that entire span there and of course there’s big industry, big companies here and of course some of them hire westerners to fill those spots. The salary span is so so broad. How do you find managing that? Do you sort of see people what I found, and when I initially started this journey it seems amazing as people got promotions, the salaries could jump up at 20 or 30 or 50 percent per promotion because they would go up there in that ladder whereas in the west you would kind of get a 5 or 10 percent bump, do you see that like there’s a lot salary progression within certain roles?

Mike: Yeah, there are actually some companies that the salary bracket for certain positions or certain years of experience. I guess you could say they’re more competitive because there are certain skills that there are actually high in demand but low on supply so there are some companies who does, you know whatever they would want just to hire those talents so I guess that’s where the certain disruption of salaries occurs here in the Philippines. For example, foreign companies operations here sometimes they just convert how much are they saving compare to hiring them in their own country, so sometimes they’re a bit more flexible or more open minded if you know, this person is asking this amount sometimes we give that amount to the candidate. So that’s what happened.

Derek: Yeah absolutely. We suggest don’t always try and save so much money and especially if people are coming here and starting out, your Senior Manager or your pioneer you should really try and get the best you can because they’re really a big determinant to the success of the project but it is kind of the economics of it are kind of pretty funky if you look into it because maybe in the west people might be paying 60,000 US for an Ops manager and so they come here and if they pay 50,000 US for an OPS manager here they feel like they’ve got a pretty good deal and of course they have whereas the going salary might be 30,000 US for that role or even 20,000 or even less so there’s, it’s quite a complex market when you have such roles and such a massive span in terms pay salaries. And I supposed can you give us insight or comment on the availability of expats here floating around in the Philippines market. Are there many kinds of expats looking for position?

Mike: Yeah there are actually. Just in my own network there are actually some expats. It’s either they were a former client or they were referred by former clients of mine, sometimes approach headhunters if they could actually find a different within Manila or within the Philippines. I guess compared to maybe 5 or 10 years ago, right now there’s a lot of expats now who are willing to transfer from let’s say the company that hires them to go to Manila to do the turnover now. yeah, you could see in a lot of companies there are a lot of expats now.

Derek: And it’s a growing trend isn’t it, while I suddenly I see that people come here and they’re a little bit scared and they want a lot of benefits to cover the fact that they’re coming to the Philippines but then when they get here they wanna stay, they wanna enjoy the life here and then looking for different jobs here.

Mike: I guess the advantage of the Philippines would be maybe it’s almost American from the country where they came from in terms of the senior, the office, the work it’s almost the same I guess the only difference would be the cost of living is really low. Weather would a bit different more hotter most likely. The food here it’s not that different, I mean there’s a lot of cuisine in the Philippines so they won’t get too much homesick since more or less life would be the same or maybe even better.

Derek: Yeah absolutely, it’s an interesting thing. What I notice as well is that expat salaries can commonly bridge local salaries so if you come as an expat you might get a phenomenal huge salary where it’s not uncommon but then if you stay and you’re then within the Philippine employment market you will probably struggle to get those salaries again because compared to local executives that are also incredibly competent and highly skilled then that salary would be too rich. So what they commonly or what is seen commonly is that the salaries bridged, they don’t get the super high salaries that they would as a true expat but then it can be slightly higher potential than a local salary  so they can get this bridged salaries but yeah it’s interesting to know that are more and more foreigner opting to stay here because it really is can be superb lifestyle for those.

Mike: Yeah.

Derek: Fantastic and so if anybody wants to get in touch with you Mike and if anyone want to build a team with Mike or discuss executive placement either with local expat people what would you suggest they do and how can they get in touch with you?

Mike: Sure they could easily just email me, my email address is [email protected] and then our generic email address for the company is [email protected] shoot me up an email if you have an inquires, I’ll gladly answer for you if you need some help as long as I could answer or I could refer you to people would actually help you out.

Derek: Fantastic, thank you, Mike. And of course just give some insight as well into the cost structure, is it a fee success, is there an engagement fee just for people to have a kind of concept of that.

Mike: No fees, I mean I guess obviously with recruitment there will be a success fee as long we were able to hire a candidate for you that’s only time that we would be sending an invoice but other than that no fees upfront.

Derek: Fantastic, that’s great, thank you so much, Mike.

Mike: Alright, thank you very much too.

Ok that was Mike Santos of Phil Exeq Search Solutions if you wanna get in touch with Mike or his company then go to our show notes at outsourceaccelerator.com/155 and as always if you want to ask us anything then drop us an email to [email protected] see you next time.