Is it ethical to pay a low foreign wage?
You can hire staff offshore that will work in grade A office space, and earn a wage that lets them live a lifestyle not unlike your own. It might seem like a low wage, but as an employer, you are contributing a lot to building new "middle class" wealth in these developing countries.
Working Conditions for your offshore team.
Many Australians have the impression that because staff in other countries are much cheaper, that this means they are being exploited or have terrible working conditions.
If you’re trying to squeeze every drop of profit by having complete disregard for your staff, then you’re definitely looking in the wrong place here. The reality is that there are many thousands of Australian businesses with offshore operations, who have extremely happy staff.
It’s hard to adequately explain this without actually showing you (something we definitely recommend you do). Your staff will work in what we would consider to be grade-A office space. They will have a comfortable chair and desk. They may nice views of the city depending on their location in the office. They have immediate access to cheap and nutritious food within the office complexes – for around $1-$2 AUD they can buy a nice lunch. Some providers include lunch for their staff.
Their wage, despite being perhaps one fifth of a typical Australia wage, allows them to afford a lifestyle that is not so different to yours and mine. Many of our clients’ offshore staff can afford to send their children to private school, and have high quality health insurance. And due to the very low wages of unskilled workers, many of them can afford things that we cant, like full time nannies or maids.
So it’s a very shallow assumption to equate low cost wages to exploitation. In fact when you travel to a global offshoring hub like the Philippines or India, you soon realise that quite the opposite is true, and that you’re actually part of something very special. These countries are rapidly transforming their economies from “third world” due to their cost effective staff resources.
As an employer, you become part of the process of growing a new “middle class” of families that literally did not exist 15 years ago. Developing countries typically have a layer of ultra-wealthy elite, and they have the mass of people in poverty, with no middle class like we see in Australia.
This middle class in places like Philippines and India can now afford many of the luxuries that we take for granted. The “low” wages you might feel funny about paying are actually helping families to live in nicer and safer house. You’re helping their kids to get a good education. You’re helping to kick start a cycle of growth and development that will ultimately transform the lives of tens of millions of people in these countries.
And this is one reason your staff there will value you as an employer – this gratitude may be something new for you as an Australian employer but it is very genuine.
Not every offshore staff provider is ethical. Actually there are plenty who are not. There are plenty who will charge you a flat fee per person per month, and they will pay the employee very little and keep as much as they can.
It’s important to know the right staffing and facilities providers to ensure that you are treating your staff ethically, and that they will be excited and happy to be working for you for many years. It’s also important to ensure that local IR/HR laws are being followed.
We make all of this easy by having pre-selected all the right providers and facilities, and only presenting those to you who have a strong ethical and legal approach, and who offer transparency with your staff wages.