Growing Online Income

Is Outsourcing Immoral?

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I am a member of a few private groups on Facebook and one of them is focused around the business of travel blogging.

Recently two bloggers have brought up the concept of outsourcing to third world countries for ridiculously low rates and how immoral it is.

It struck a cord with me as I have both freelanced online and routinely work with virtual assistants and writers in other countries.

Is outsourcing immoral?

After reading the Four Hour Work Week a few years ago, I learned about the concept of outsourcing. Essentially paying someone to do a job for you and leveraging other currencies and local wages.

The authors of these comments said it was unfair to pay foreign workers (living in their home countries) a lesser wage than we would pay someone in our own country to do it… really?

My Stance on Outsourcing

The main virtual assistant (VA) I have at the moment has been working for me for almost 1.5 years. She is a fantastic asset to my business. Her tasks include:

Sending pitching emails out for me – to clients, to hotels etc I would like to work with. She does not handle replying, etc. I had hired someone to help me with that but I had a whole bunch of problems with her so decided not to move forward with that idea at this point in time.

Creates Invoices for me – she creates a list of all the posts I’ve done for clients, prices etc and creates invoices for my tax purposes

She Posts WordPress Posts for me – on the blogs I do advertising on, she handles the posts. She’ll find nice images, make everything tidy and so on.

Misc Research and other help – she helps me with anything I don’t really have the spare time for. For example finding some good hotels for us to pitch to or finding places with great, free WIFI when I’m traveling so I can work.

All in all, she works 15-20 hours for me most weeks, on a casual basis. She’s a stay-at-home mum and I’m pretty flexible with my work so it works out well for her and her family.

How Much do I Pay Her?
I pay my VA $4.50 an hour + commission, so that when I’m doing well, she’s doing a little better too. I think a fair estimate of her  average wage is around $6 per hour. The minimum daily wage in the Philippines (where she’s from) is $5. If she were working for me full time, she’d be on around 9 times the average minimum wage. In New Zealand the minimum daily wage would be $114 (14.25 per hour * 8) if we converted that into NZ terms and said I was getting 9 times the minimum daily wage then that would be 114*9 = $1026 per day.

Obviously this is different because on an international scale $1026 NZD is going to buy a heck of a lot more than $45 USD.

But I did this calculation to illustrate a point, by her local standards she is not doing badly at all. In fact, working part time for me with flexible hours for her family, she is probably doing better than she would be if she was working full time locally.

Now, perhaps I could employ someone in New Zealand to do those tasks for me at the rate of $14.50 per hour. But the truth is, if I was paying that much for those tasks, I’d probably just talk myself into doing them myself as my business costs would have gone up by 2.5 times.

So if I wasn’t getting the help that I am for such a good price, I’d do it myself. That would mean my lovely VA would be out of work, I would be stressed and overworked and unable to progress my business as quickly.

That doesn’t sound like a good move for either of us.

So Does That Mean Outsourcing is Moral?

I believe if done correctly, it can be great for both parties.

Someone in the travel blogging community compared outsourcing to cheaper countries to slavery. That bothered me because I really like my VA, I want to take care of her. For her husband and her wedding anniversary I paid for them to stay for a night in a nice hotel. Last year I gave her two weeks of paid holidays.

Furthermore when she bid on the job initially she was prepared to do the work for $2.50 an hour. I increased her pay after the trial and am looking to give her another pay rise soon as she is a serious asset to my team and I want to keep her around!

But at the end of the day if she doesn’t like the work, the boss or the pay she can walk away. Nothing’s chained her to me for the past 1.5 years.

Despite all the pros I have experienced from outsourcing, I believe that paying contractors in other countries, particularly lower income countries, a wage that does not meet local standards is immoral. I believe using people’s desperation in order to get work at unliveable rates is not right, no matter where you go.

I like that my virtual assistant earns well for the work she’s doing and has a relatively flexible lifestyle.

Do you outsource any of your work? Do you think outsourcing is immoral, or, moral if you handle it correctly?

I would love to hear your thoughts.

In other news I booked a few more legs of our flights. Turns out we’re spending a bit longer in Asia than I thought! We’ll be in Bali for 30 days, Singapore for 4 days, Thailand for 3 weeks, then we’re off to Paris, baby. I hated Paris the first time I visited back in 2010, so I’m looking forward to revisiting it and seeing if my initial impression was on the mark. YAY!