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Unwarranted concerns about data security mean tax agents are missing a trick compared with other finance professionals, says specialist.
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Accountants ‘slowest’ to dip toes in offshore staff market
06 February 2023
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13 minute read
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Accountants have been more cautious than other financial service specialities about hiring offshore staff because of undue concerns over data security, says the founder of recruiting specialist VA Platinum.
Brian Jones, also CEO, said the concerns were misplaced with overseas office setups much stricter than in Australia and that meant accounting firms were missing out on the chief benefit of offshoring.
He said suburban accountants who recruited offshore could get back to growing their business and the quality of recruits in the Philippines, in particular, meant the offshore staff could handle routine transactions with clients.
“Most of our accounting clients are typical suburban businesses, they will either have one to five partners, and the clients we have are really looking for a team mentality.
“So they usually come to us saying that they would like to hire three, four or five team members, all in one go, and ‘we’re going to induct them in the same way we induct our Australian team members’.
“They say, ‘We’re not looking for them to be doing low-end work where they don’t talk to clients. We’re really looking for highly skilled professional team members, where if an Australian team member leaves we want to replace them with two team members in the Philippines. Because we know we’ll also get double output and we’ll also get some cost savings.’”
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He said VA Platinum employed directly in the Philippines so the staff there got their full benefits under Philippine law. Hiring them as contractors could open up legal problems.
“The trouble with that is for privacy legislation purposes, the clients in Australia aren’t covered.”
Mr Jones’s clients then hired staff directly through VA Platinum.
“For all intents and purposes it’s the client’s full-time team member. They treat them as such, from a legal point of view.”
He said for accountants and bookkeepers in Australia, VA Platinum only hired qualified team members in the Philippines and it was up to the client how much training up they were prepared to do.
“Often we find the clients are more looking to hire the right person, rather than looking to hire a person just because they have history with, say, Xero as their software.”
The potential of outsourcing in the Philippines was huge he said, and the tax profession was just starting to tap into it.
“I think the market in bookkeeping-accounting, especially given the skill base within the Philippines being trained in international accounting standards, is there at a lower price point.
“It’s there for the taking if they want to improve their service to clients at a lower price point.”
But the tax industry had been slower than other finance specialties to make the most of the opportunity.
“Accountants have been the most cautious, I think, in the financial services industry to put their toe in the water regarding this because they’ve got this belief of shonky operators, low data security.
“So I think that accounting typically has been quite slow to adopt hiring team members in the Philippines — it’s has been led primarily by the financial planners and mortgage brokers.”
But the perception was out of sync with reality, he said.
VA Platinum offered its accounting and bookkeeping clients a “sterile” working environment in its Cebu office.
“Which means when someone walks in to the building they have to have our lanyard with their photo ID. They have got to go past security guards. There’s already CCTV cameras watching them the whole way.
“When they get up to the office door, they have to empty their pockets, put their bags into lockers outside of the office door, and then use a fingerprint scanner to get into the locked, secure working environment.
“When they sit down at their desk, all USB ports have been disabled, they can’t have anything on their desk except for a clear glass of water or a mug of coffee – there’s no paper, no pens. So the data security that a team member can operate within the Philippines is totally different to the data security in Australia.”
He said even working from home arrangements in the Philippines were stricter, with special setups required.
“Once accountants see that the operations in the Philippines are actually tighter with regards to data security than in Australia, I think the adoption will only get bigger from here.”
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