TRANSCRIPT
00:00:00:00 โ 00:00:23:17
All right. So then, weโve done a lot of research and weโve got a lot of the resources that weโre going to talk about today. So weโre certainly happy afterwards to let you know, where to get it, the research that weโve done. So letโs, letโs get stuck into it.
00:00:23:20 โ 00:00:48:20
So, ethical concerns. So, this is something that has always been. So when we look to start this business 15 years ago up here in the Philippines, this was the number one concern for us in terms of getting active up here in the market. And thatโs actually where the nine flat planet came from. So the whole reason that weโre called Flat Planet is about trying to create a level playing field.
00:00:48:22 โ 00:01:22:25
Itโs not because weโre flat earthers, itโs just the whole idea of a level playing field and equal access to opportunity and all those kind of, sort of ideals were very much behind our thinking. When we first started Flat Planet. And itโs about finding the balance. Iโm happy weโll get more and more into that as we go. The Philippines, outsourcing industry has officially around 1.5 million workers and generates in Australian dollars about 45 billion.
00:01:22:27 โ 00:01:49:06
Now, I say officially, one of the things to keep in mind is that the, world Bank thinks, based on its research, that as much as a third of the Philippine economy is actually informal or black market or whatever word you want to say.
00:01:49:08 โ 00:02:24:03
Now, if thereโs as many as another 750,000 workers employed in the outsourcing industry, but theyโre employed via unofficial, channels that canโt be measured. So thatโs just something to keep in mind. So thereโs informal, recruitment in the outsourcing industry. And if anyoneโs been following the news, this new this court case that was just recently went through with fair work Australia, Pascua versus Dossell
00:02:24:05 โ 00:02:48:09
The sell. I might not have pronounced that second word perfectly, but, that was all about the informal economy that exists, up here in the Philippines. So, so one of the issues that we, that we look at is that, you know, you know, well, a lot of people talk about poverty and there is a lot of poverty in the Philippines.
00:02:48:11 โ 00:03:14:00
Itโs itโs a bit difficult, you know, living here and, you know, weโve, you know, weโve lived here now for 15 years. So it becomes something that, that becomes, you know, familiar to you, to the point where you donโt sort of maybe see it as much as perhaps you should. But one of the real insights, I guess, around poverty is that.
00:03:14:03 โ 00:03:34:02
Money or lack of money is not really the cause of poverty. Itโs a symptom. That what really drives poverty is a lack of choice or the lack of opportunity. So, you know, thereโs a lot of people here who donโt have a job who would love a job, right? Theyโre in poverty because they donโt have a job.
00:03:34:09 โ 00:03:57:21
And the reason they donโt have a job is because thereโs no jobs. Itโs not because theyโve chosen not to have one. So. So itโs about lack of opportunity. So so thatโs sort of interesting. But that also opens Pandoraโs box in terms of thinking about how much you pay people. Because obviously thereโs a lot of people here who donโt have any choice.
00:03:57:23 โ 00:04:23:16
Right. And so the problem is that if you go in and someone it hasnโt got any choice and you really pay them a very small amount, theyโre going to accept that job. And you could argue that, well, somethingโs better than nothing. Thatโs kind of the question. And itโs for each person to answer that question themselves.
00:04:23:19 โ 00:04:50:15
But whereโs the balance in that conundrum? Right. So, so we think that thereโs five different models that you can use to, decide what salary that youโre going to pay. So weโre just weโre just being right upfront. We decide that in terms of this, you know, the least amount possible. So thereโs lots of desperate people up here who live in poverty.
00:04:50:17 โ 00:05:16:20
And I mean, the world Bank claims or their research says that thereโs about 20 million people in the Philippines, which is about, well, thereโs approximately 120 million people here. So about 20 million people live on $2 a day or less, which is not very much. Weโll get into the cost of living in a minute. So itโs certainly possible to come up here and pay people as little as possible.
00:05:16:23 โ 00:05:40:29
And so weโre just being upfront and weโre just saying, well, thatโs youโve crossed the line with that, then youโve got the minimum wage. So just like in other countries, like in Australia, there is a government mandated minimum wage in the Philippines. And weโre going to talk about what that is. The minimum wage is very low. It varies. All the different localities in the Philippines all have their own minimum wage.
00:05:40:29 โ 00:06:08:28
Itโs not, uniform national minimum wage. And the, minimum wage, youโve got to keep in mind is really itโs the minimum wage. So itโs agricultural workers, you know, street sweepers, security guards, lot, the really basic, basic minimum wage. And weโll talk about that and weโll talk about how that compares to the cost of living. Then thereโs the market wage.
00:06:09:00 โ 00:06:38:08
And thatโs really what the market says. So if you want to hire somebody with this particular skill set, letโs say a call center worker, which is the classic that everyone thinks about in relation to the Philippines, then thereโs a market wage for that person. So it might be, a recent graduate with reasonable English, and you might pay them about 18 or $19,000 a month, which would be, about 450 to 500 AUD a month in that sort of thing.
00:06:38:08 โ 00:06:58:12
You know, when they get a bit older, the wage goes up a little bit. And, you know, so thatโs how much you might pay a call center worker. Whereas for somebody whoโs a qualified accountant, so theyโre not a CPI, but theyโre just, you know, theyโve come out of the university with some kind of, you know, three year accounting degree, you know, young person.
00:06:58:15 โ 00:07:27:03
You might be paying them double what a call center worker would get. Or if theyโve got five years experience or ten yearsโ experience you might be paying them triple. So, so and the market pretty much determines how much you need to pay in order to get someone with whatever the skill set is that youโre looking for. And, and the market wage may or may not be above or below what we call the living wage.
00:07:27:06 โ 00:08:02:00
So the living wage is a different method. And thatโs really around the whole idea of which is really what the Australian system is based on, where people need to be able to live with a sense of personal dignity. So that goes all the way back to, High Court decision in 1908. I think it was the Harvester judgment, which is that the minimum wage in Australia is is established based on how much someone needs to be paid in order to live with a sense of personal dignity.
00:08:02:07 โ 00:08:39:10
And then, of course, that opens a can of worms around. What is that? So what does that mean? And weโll talk about that in this presentation. And then thereโs a comparative wage, which is, you know, if you live in Australia and you live in a house and youโve got, you know, a driveway and youโve got his and her matching Commodores in the front yard, and you get to go on holidays to Fiji occasionally or, you know, whatever it is your lifestyle is, how much would you have to pay a Filipino in order for them to enjoy the same lifestyle that you might enjoy, as a middle class person in Australia.
00:08:39:10 โ 00:09:07:21
So which is, difficult. So, so we would argue, obviously, where weโre going with the presentation is that you donโt really want to go at the bottom. You donโt really want to cross the line and go into the exploitation. And a comparative wage is really not realistic in any stretch. And thatโs around understanding really these middle three, which is a minimum versus market versus living.
00:09:07:21 โ 00:09:36:02
And theyโre the three that weโre going to really focus on. So letโs just have a look at the cost of living in the Philippines. Now one of the things thatโs really apparent that weโve been looking at over the last little while, and weโre going to show you a couple of graphs here. But the itโs not that thereโs not a lot of honest, really good study about what the actual true cost of living is.
00:09:36:04 โ 00:10:09:28
Here in the Philippines. So, this is, an international, organization that, you know, a lot there. Theyโre, itโs a study thatโs kind of almost related to sort of, you know, NGO, United Nations type stuff. And, and itโs a data thatโs also, that is published on the, Department of Labor and Employment here in the Philippines, which is dollar which is the equivalent in the Philippines of, say, the Fair Work Commission.
00:10:10:00 โ 00:10:32:03
And thereโs all of these numbers up here. Now, the first thing Iโm just going to say is that you can see very, very clearly that, the,
00:10:32:05 โ 00:10:59:09
If youโve lived here in the Philippines that these numbers that have been published by the government donโt actually look that realistic. So, and weโre going to break these numbers down and have a look at them. But just to sort of give you an idea, even with this, youโve got four for, one person. Youโve got, theyโre saying that it costs about $600.
00:10:59:12 โ 00:11:25:24
A month to live, and weโre going to break in. Weโre going to break into all of that. But $600, by the way, is, substantially more than the minimum wage. And $600 is also more than what it would cost, what you would pay if you were paying the market wage for a, for, for an entry level contact center worker or the like.
00:11:25:26 โ 00:12:15:04
Okay. And then even these numbers here, when you go up to a family of four, the number theyโve got there is 1512. So thatโs so the idea is that if youโve got a, you know, so people in the Philippines have their families at a much younger age than they might in, in Australia. So you would have, potentially youโd have someone who was 29 or 30 years old with ten years experience who might have a couple of kids, at home and, you know, their cost of living, according to this particular bit of research, would be around sort of 30,000 or so pesos.
00:12:15:07 โ 00:12:41:01
So, so itโs more than $30,000. So, so $1,000 is $37,000, but so about $55,000 would be around about what the cost of living would be. For somebody whoโs about 30 years old and has a couple of kids at home. So letโs dig into that a little bit. So, wages and working conditions in the Philippines.
00:12:41:01 โ 00:13:04:10
All right. But weโve covered a lot of this off. Already off. Iโm talking a bit ahead of that. This next one starts digging into it. So the NCR is the National Capital Region and thatโs Manila. And Manila is the most expensive place in the Philippines to live. And this is another bit of data that also has been published by the government.
00:13:04:13 โ 00:13:28:21
And I just want to sort of have a little look at this. And just open it up a little bit, just so we can also see that the data thatโs published by the government up here, I donโt think is that incredibly accurate. And letโs just pick on a couple of these. So the first thing is that, which you know, is the education.
00:13:28:24 โ 00:14:06:23
So in this particular scenario, itโs a family of five with three kids. And theyโre saying the education is about $300 a month now, $300 a month is, whatโs $100? Thatโs about, in Australian dollars. Thatโs per child. Thatโs about $2.50 to $3, which is not very much. And itโs completely ridiculous. And, you know, obviously, you know, recreation and culture, weโve got about $3 Australian per month, for a family of five.
00:14:06:26 โ 00:14:23:25
So, you know, I would argue that that also is, is ridiculous. So, so the point is here that if youโre going to go to the government and youโre going to look for really good research.
00:14:23:28 โ 00:15:09:11
Thereโs that really what the true cost of care as far as weโve been able to find that youโre not going to get, a very, very realistic number. So weโre in the middle of doing so, so, so the number by the way. So weโre in the middle of doing a big research project, and we think that the number is between 36 and $40,000 a month is actually if, if you want to have a so your basic family with, a single wage and, with two kids and, you want them to have a basic house with a fridge, and you want them to be able to feed their children three times a day. You want the kids to have access to protein, and also you want the kids to be able to go to school and, you know, to have transport, to go to school and to, not be, you know, to be fed, like I said, three times a day and to have access to things like school books and pencils and all of that sort of stuff, that you are looking at around about, 36 to $40,000 a month would be the cost for that.
00:15:43:08 โ 00:16:32:06
And just on that, we would we would sort of argue to get to the idea of sort of this sustainability, if you want it to be really sustainable, is that if youโre hiring staff in the Philippines and those staff are required by you to have a college or university degree of some sort in order to qualify, then we would argue that you actually need to pay whoever that person is enough so that they also could send their kids to, to to college or university or whatever it is that you require, because thatโs the basic, fundamental driver of the whole idea of sustainability is that you need to be able to replace, if
00:16:32:06 โ 00:17:15:15
you like, the value that youโre extracting from the economy. And, so, you know, clearly, even if you look at these numbers, which we think are unrealistic, the, which, which is $25,000 a month, you know, the biggest haul there is education. So, so we really think itโs important that we, that you consider education, and that you also consider, you know, obviously this whole idea about having access to things like a fridge, I think in Manila that you need access to a farm, even if youโve grown up here, you know, itโs hot.
00:17:15:17 โ 00:17:35:05
And, just to be able to run a fan at night while you sleep is really important. And, and and so forth. You know, and those are, those are the numbers. And I think you can see from looking at that, that itโs a pretty basic just to run through some of those other expenditures. Thatโs about $8 a month, which is nothing.
00:17:35:12 โ 00:18:04:13
Weโre talking about $11 a month in savings, which is, anywhere. So recreation cultures, thatโs about $3 alcohol. So, you know, itโs, you know, thatโs, thatโs about $5, a month. So thatโs a dollar a month per person in the family, I suppose. The kids arenโt drinking. Education is very low. Thatโs about $8. I donโt on dollars $330.
00:18:04:15 โ 00:18:34:11
Thatโs about $9 on furniture and stuff. You know, weโre talking about for a family of five in these numbers, weโre talking about, you know, $12 a month for clothing and footwear. So a lot of people here where, thereโs a big industry here called Ochi. And what it is people buy those. If I donโt know if youโve seen on TV, on the news, big piles of secondhand clothing.
00:18:34:14 โ 00:18:59:29
That they buy in from overseas and then they all the stores buy these huge bales of clothing, which is a bit like a lucky dip. Theyโre everywhere, all around town, these awkward stores. And then, you just go there and you just buy stuff for a dollar. Just that, like secondhand clothing that comes from wealthy countries like Australia or from Europe or the US.
00:19:00:01 โ 00:19:28:18
Health expenses, as you can see, thatโs about 12 or $13. Communication. I think itโs unrealistic. Very unrealistic. Everybody in the Philippines has a cell phone. Itโs really common. And, like everybody, even people that donโt have enough money to eat, I also donโt have enough money for a cell phone. And then, you know, transport, as you can see, is very expensive compared to the other things.
00:19:28:21 โ 00:19:47:19
Thatโs very rudimentary transport thatโs just sitting in a jeepney, which is, a small, it looks a bit like a World War Two era sort of jeep. Thatโs a bit you donโt get it doesnโt have glass or any that sort of stuff in the windows. Itโs just sort of like an open air type thing with a roof.
00:19:47:21 โ 00:20:08:24
And, you know, electricity. So my personal. So I live a Western lifestyle up here. So, you know, like, my wife and I live in a house, and weโve got, you know, weโve got, two fridges, weโve got a wine fridge, weโve got a freezer, weโve run the air conditioner, and all of that sort of stuff.
00:20:08:24 โ 00:20:36:01
So our electricity bill for running a basic household, if you like, for in the Western standards, is about ten times. So we pay about 25 to $30,000 a month for our electricity bill. So, 2600 is a very, very small electricity bill. And that goes to the whole question about whether theyโve even got a fridge. They certainly donโt have an air conditioner at that much.
00:20:36:03 โ 00:20:57:03
So house and rent, a lot of people here live in very, very simple basic housing, which is fine, but thatโs what it is. And then obviously food is the big expense and food inflation in the Philippines at the moment is running at about nine, 9% or so. It depends a lot on what youโre eating and so on.
00:20:57:03 โ 00:21:32:04
But certainly pork has gone up a lot. Itโs pretty much now unaffordable. Everyoneโs moving to chicken. And rice is the staple here. And, thatโs, the price of rice in the Philippines is actually regulated by the government to keep it, keep it down. So, what weโre going to do here is just have a bit of a look at some of the differences between wages in, in the, in the Philippines versus Australia, and wage expectations based on skill levels.
00:21:32:04 โ 00:22:00:24
So weโre sort of moving now past the minimum wage and the cost of living and weโre now starting to move into, actually what the market wages for different roles. So letโs just sorry, just on the, just on the minimum wage, just to bear in mind that the minimum wage is, like I said, itโs designed for the minimum wage is different from the minimum wage in Australia.
00:22:00:27 โ 00:22:28:04
Like I said, the minimum wage in Australia is really designed. Itโs set by the Australian government or by the Fair Work Commission. And the idea is that it should be enough for people to live with a basic sense of personal dignity. Whereas here thatโs not really we can already see that thereโs a huge, gap between the cost of living in the minimum wage here.
00:22:28:06 โ 00:22:47:07
So the minimum wage here is very much sort of survival, just basic survival. The minimum wage did get bit of a lift, in the last little while. About two years ago, there was sort of a it didnโt move for a long time. And then about two years ago, shot up. There was a lot of inflation.
00:22:47:07 โ 00:23:13:07
So food inflation, which for poor people is like, food is obviously where they spend most of their money. So food inflation has an outsized impact on the household budget. And I know that in Australia thereโs a big issue around food inflation. But as a percentage of peopleโs income, people spend a much higher percentage here on food than they do in Australia.
00:23:13:09 โ 00:23:41:09
So food inflation was running up here in the Philippines for a year or two at around 12%. And it was a really big problem up here. Itโs sort of stabilized a little bit now. But anyway, so the minimum wage really had to shoot up. But itโs still not very much. And, the point is that, well, the minimum wage that weโve got here is in the, is in Manila in the National Capital Region, in different parts of the Philippines.
00:23:41:09 โ 00:24:04:08
It can be much lower if youโre living in the province. It could be, you know, $400 or so. So it could be sort of 30% cheaper. And the idea behind that is that in provincial areas, a lot of the costs are very much lower. So which is true. So rent and you know, obviously transport stuff like that.
00:24:04:10 โ 00:24:59:18
So so and that is very, very true. Of course infrastructure is very different in the province as well. So one of the problems in terms of running a business of the province, versus Manila and itโs give and take in terms of the, you know, itโs definitely a balancing act that needs to be considered. But one of the problems is that the, reliability of services, not that reliability of services is perfect in Manila, but that reliability of services can be less in many of the provincial areas, in particular, electricity and internet connectivity, which is obviously really important if youโre running a remote business.
00:24:59:21 โ 00:25:23:02
All right. So weโve already touched on this. So, you know, the whole idea of a living wage is the idea, which is the Australian tradition. So, you know, is the whole idea, you know, how much do you need to pay someone in order to give them a sense, just a sense of, you know, to basically to say they three straight up today and send their kids to school.
00:25:23:09 โ 00:26:03:18
So, so thatโs sort of an issue. And thatโs kind of what we think is important. And letโs keep going. All right. So, so, so, so we would sort of argue that when you, and I guess where we would sort of argue is that the tension in the market up here is this tension between, between a desire on the part of many businesses to pay a fair wage.
00:26:03:25 โ 00:26:34:03
And I think everybody really wants to pay a fair wage. I donโt think thereโs too many people who really, honestly just donโt care about the welfare of their workers. I think thatโs nonsense. But at the same time, of course, you do have to stay competitive. So, you know, and this is something that you do wrestle with. So we have in Flat Planet, we have, so our average salary across the business is substantially higher than what I would say is a living wage.
00:26:34:06 โ 00:27:06:03
But you do have staff who, for whatever reason, are paid less than what you might think is a living wage. And but at the end of the day, you need to stay competitive. So if youโre in business, and youโre, you know, in the Philippines and youโre investing in the Philippines and youโre providing jobs in the Philippines in order to make your business competitive and sustainable in Australia or in another market.
00:27:06:06 โ 00:27:30:26
Obviously you canโt just go crazy and just pay more than what your competitors are paying for the same service. So and I guess this is one of the reasons why I would describe it as ethics. Because ethics are not something that are fixed in stone. Thereโs no black line. Itโs not, you know, this much is unethical and this much is ethical.
00:27:30:26 โ 00:27:53:25
Thereโs no kind of hard line in the sand that you can use to definitively say exactly where the boundary is. Itโs very much around that balance about your judgment in terms of what you need in order to keep your business sustainable, which is obviously really important to you. And you have a responsibility as an executive inside your business to make sure that your business is sustainable.
00:27:53:25 โ 00:28:34:26
So, totally that is completely true. And then on the same on the other side of the coin, youโve got to balance that against what your workers need in order for them. And so for their role to be sustainable. So, so these are the these are the issues to sort of try and to try and balance. One of the things thatโs really happening thatโs really interesting in the BPO industry, the BPO, by the by standard business process outsourcing, which is this whole industry where thereโs, one and a half to 2 million Filipinos who work for foreign companies.
00:28:34:28 โ 00:29:10:17
One of the really interesting things is that, and by the way, whether this is driven by AI or or not, I suspect that itโs driven by a lot of robotic robotic process automation, which is a, a wave of technology thatโs just sort of ahead of AI on. But a lot of the really low value roles that, that, generally roles that have a low salary attached to them, theyโre actually in decline.
00:29:10:17 โ 00:29:57:17
So, so one of the things is that certainly the call center, so that classic Filipino job of someone whoโs just on the phone, those jobs are disappearing and the, and whatโs growing is, more specialized roles with higher value skills. So, so a lot of this question around, if you like, if you were to concern yourself with the gap between a market wage and a living wage, one of the ways to overcome that is just simply to focus on staff who have more skills and by definition, because theyโve got more skills, they have more earning capacity.
00:29:57:19 โ 00:30:33:20
And because theyโve got more earning capacity, their wage is automatically going to be above what a living wage might be. And thatโs certainly the case. Thatโs that planet. So we specialize in stuff who, more highly skilled, and so we donโt do a lot of the really basic, data entry and basic call center work. And, so by definition, because of the market that we operate in, itโs, itโs higher value.
00:30:33:20 โ 00:31:05:24
So, so this whole sort of stress or tension between those two, between the market wage and, the living wage, is less of an issue of, for us. But like I said, thereโs other businesses who but by definition that thatโs not the case. So, letโs just have a look. Weโve just picked out now weโve got pages and pages and pages.
00:31:05:24 โ 00:31:28:17
So we went through before we did this presentation and we went through, there must have been 40 or 50 different job titles that we looked at. And so weโve got a whole bunch of data here, which sort of looks at how much it costs to hire people at different sort of jobs, at the different roles within, within the Philippines.
00:31:28:19 โ 00:31:58:14
And so we looked at, the data that was here in the Philippines, that was, you know, thereโs the job boards. In fact, the big job board here. Job straight was actually purchased, by a holding company that also ran Sikh in Australia. So Sikh, the job board, people in Australia, busy taking over the world, so.
00:31:58:14 โ 00:32:28:27
Or at least Southeast Asia. So theyโre becoming a very big player in all these job boards all around the place. So, so a lot of this data is starting to become available through their engines, which is really good. And itโs really useful to sort of try and figure out what people are paying for different roles. But just to sort of give you some, some basic, and this is stuff that we can talk about all day, and you guys are welcome to come and ask us questions about what we think for this and what we think for that, for the for this trouble, that job.
00:32:28:29 โ 00:33:00:15
But generally speaking, we think that, you should be able to save in, you should be able to save in terms of the total cost of employment. So when I say the total cost of employment, Iโm not just talking about their basic monthly pay. Iโm talking about, you know, the total cost. So, you know, the desk, the chair, the Microsoft license or whatever it is, all of that stuff.
00:33:00:16 โ 00:33:42:12
Right? Holiday pay and sig pay and all that stuff. Right. So, you should be able to save around 60%. And thatโs broadly true. Sort of regardless of the actual job, the somebody is doing. So, so if youโre hiring someone who, letโs say, is at the very entry level role, then, you know, so the classic which is a less common job now, but the classic, the call center agent or a data entry person or something, the saving can be around that sort of 60% mark.
00:33:42:12 โ 00:34:24:09
Now, the thing is, itโs possible to come to the Philippines and decide that instead of saving 60% that you want to save 70% or 75%. If you want to really go super hard. And thatโs sort of what weโre talking about here. So, so it is particularly for the so the answer to the semi-skilled unskilled jobs at the very bottom end of the market, at the entry level end of the market, it is possible to really go hard and really sort of, you know, reduce people down to a very low level in terms of their salary.
00:34:24:11 โ 00:35:01:13
So, so the question is how far should you push that? So I guess, you know, we sort of think that if you, if you said as a business, Iโm happy to save, say, 60% and that extra a little bit that I could potentially just really push, Iโm actually just going to leave that money with the, with the employee, because, you know, $50 a month or whatever it might be is of significantly more value to somebody living basically in poverty than it is to me.
00:35:01:15 โ 00:35:27:00
With $50 a round of drinks at the local pub. So, so itโs kind of, you know, thatโs kind of where the, you know, thatโs sort of where the issue is. But a lot of these other jobs that you look at here, you can see here and the, you know, like that, that one there that the project manager with 2 to 4 years experience, I mean, a good project manager obviously is worth a winning goal.
00:35:27:02 โ 00:35:51:09
And thereโs plenty of them in the Philippines. One of the things to think about with the Philippines is that the Philippines actually provides a lot of, skilled workers into areas like the Middle East. So thereโs lots of project managers with construction experience and all that sort of stuff. Who has been working in Dubai or other, you know, Saudi Arabia, Abu Dhabi, wherever it might be.
00:35:51:11 โ 00:36:18:02
Who would love to get a job and come back to the Philippines? So they agree with their family so you can get very, very experienced people. And the sort of salary weโre looking at there is, you know, two and a half you thousand US dollars a month and, you know, thatโs a great salary. So but then again, somebody in Australia, who was on that sort of money would cost significantly more.
00:36:18:04 โ 00:36:41:05
So thatโs, you know, anyway, so we can talk about all these jobs, just whatever particular job you sort of just one thing, is that it? So software developers and it taught people, generally the saving is a little bit less itโs still there. Like, there is still definitely a significant saving, but itโs not as much as you might save in other professions.
00:36:41:07 โ 00:37:11:27
And one of the drivers for that is that it jobs. Obviously more portable globally and that thereโs huge demand globally for these roles. So itโs just a much, much, much more competitive market to get the to get the workers, so just not sure how weโre going to time I think weโre, I think Iโm pretty much up, just a couple of things.
00:37:11:27 โ 00:37:43:29
So just, just, thereโs a couple of misconceptions. So all Filipino workers are low skilled. We think that thatโs actually less and less the case. You know, we certainly think that thereโs a lot of medium to high skilled people in the Philippines and that you can, you can definitely, have access to, workers who, bring to the table a lot of really high value tasks.
00:37:44:02 โ 00:38:14:16
And thatโs increasingly what the focus is in the Philippines across the whole industry. So everybodyโs now really focused on, like high skilled, you know, analysts, business intelligence and, those sort of people. And, you know, when youโre talking to, when youโre talking to a lot of these very highly skilled, highly educated Filipinos, you know, itโs just completely natural communication.
00:38:14:16 โ 00:38:36:19
I mean, these are people who are well-educated. Theyโre from a Filipino perspective. Theyโre very much middle class. And even though the middle class is not that big in the Philippines, as a percentage of the population, thereโs 120 million people here. And, so if you think about it, even if the middle class in the Philippines was 10%, thatโs still 12 million.
00:38:36:19 โ 00:39:01:24
So thereโs a lot of people in the Philippines whoโve got really good, solid, middle class skills. And thatโs a thatโs a community in the Philippines thatโs growing. One of the things about focusing on high value staff whoโve got very strong skills is, of course, itโs less of a worry. You know, you are definitely going to be paying them more than a living wage.
00:39:01:26 โ 00:39:38:09
And so, so really from our perspective, we think that, the key is not to strike, you know, definitely stay away from paying as little as possible. You know, the minimum wage we think is not realistic. We think if youโre looking at the minimum wage, itโs not actually realistic. And, we think that, the, the, the whole idea of living wage and a market wage for high value skills, more, are more compatible with each other.
00:39:38:12 โ 00:40:01:13
So thatโs it. I mean, given Iโve been told to be quiet and hurry up. Now thereโs a question and answer thing here. I just donโt know how to see it. Oh, here we are. I can see. All right, so.
00:40:01:15 โ 00:40:30:14
Okay, so the first question Iโm just going to answer life. Now, how weโve got this set up is the I canโt see who it is essentially asked this question. So, so what Iโm going to do is Iโm just going to answer the question, whoever you are whoโs asked to, thank you for the question. So the question is, if the average cost of living implies a living wage, of $600 a month, what does Flat planet pay?
00:40:30:14 โ 00:41:06:04
It average staff member to service an offshore company. All right, so. So across flat planet. Our average salary is actually about 12 or $1300 a month. Itโs about $50,000 a month. So, but like I said, the thing is, the a lot of our staff, high skilled. So we have lots of, you know, finance people and, you know, software to sort of, you know, it related to people and, and marketing people and all of these sort of jobs.
00:41:06:07 โ 00:41:45:12
So itโs like I say weโre sort of got an advantage, if you like, in terms of average salary because we, we, scientists, people with higher skills, the, the, how the model actually works is the way, saw in the staff onto employment agreements, and then the person in Australia actually is the person who decides what the salary is, and we pay it on behalf of the Australian.
00:41:45:14 โ 00:41:56:01
So at the end of the day, itโs, itโs completely transparent what that number is.
00:41:56:03 โ 00:42:16:05
Okay. So I donโt know if that answers the question, but thatโs sort of, so specifically, the answer is that the our average salary is well above that. Some staff are paid less than what you might consider. So this is another question for somebody else. I donโt know who this is, but once again, Iโll read the question.
00:42:16:07 โ 00:42:47:1
Can you clarify that some staff are paid less than what you might consider a living wage place? Where does flat planet line in the tension scale? Yeah, so definitely is a tension scale between being ethical and profitable. So we have so our average salary is well above, that what we think is a living wage. The staff who are paid less than that.
00:42:47:21 โ 00:43:07:00
So obviously the staff who are paid less than that, staff with lower skills. So, So the, the,
00:43:07:02 โ 00:43:44:03
So the lowest skilled jobs by definition, for example, company drivers, planning staff, all of that sort of stuff. So, so we, you know, those are the, you know, entry level staff, also, so, so junior staff are basic entry level positions. So, for example, you might have a team of people, so a client might have a team of people where there might be 2 or 3 really quite senior highly skilled people.
00:43:44:05 โ 00:44:05:06
And they decide that they want to bring into that team a more junior person or a couple of more junior people, whatever the number is, and they might decide that they want to bring them in specifically because theyโre a recent college graduate and they just want to give them the opportunity. If you like to, to learn like an entry level position.
00:44:05:08 โ 00:44:44:18
So those are the kind of positions where itโs, where generally you, you have to be realistic. And, where we sort of think just to touch on a but I think it gets to the whole issue of the whole of the business process. So, so if your business model. Oh, so, so, so the one that I came across recently, thereโs a big industry here in the Philippines which is around, content moderation, which we donโt touch.
00:44:44:21 โ 00:45:12:00
And thatโs this industry where, for example, some of the big social media companies are responsible for having staff or a process where they look at lots of content and they have to make a decision about whether that content should be published, on social media. And so there is actually, a big interest. The New York Times actually ran a big article on about a year ago.
00:45:12:02 โ 00:45:38:05
There is actually, a lot of, and the other one is building meta file, metadata files for artificial intelligence, where people just have to sit there and look at the screen and just type metadata and just do image after image after image in a highly repetitive way. That, a lot of those jobs here in the Philippines are actually very low paid.
00:45:38:07 โ 00:46:04:25
And thereโs rooms full of people like that. Could be you know, 50 or 100 or 200 people all sitting in a room, and theyโre just sitting there and just doing it for the lowest price possible. Theyโre very low skilled jobs, and a lot of those people are paid significantly less than, a living wage. Anyway, Iโm happy to come back and talk about that more.
00:46:04:27 โ 00:46:30:21
Okay, so Iโve got an anonymous attendee whoโs Iโm just going through these questions in order. So, third party benchmarking surveys. Yeah. Look, the problem. So, yes, I mean, like, so the answer that so the question, let me rate the question. How have you what do you get. Third party benchmarking survey is done for your staff positions.
00:46:30:24 โ 00:46:56:23
If so, generally speaking how do you rank compared to the market. All right. So so hereโs the thing about the Philippines. So thereโs an easy answer to that question, which is say yes, yes of course, you know. Absolutely. And blah blah blah, you can easily set the problem is that here in the Philippines, thereโs not a lot of data and thereโs not a lot of really reliable data.
00:46:56:25 โ 00:47:26:04
So and a lot of these benchmarking of services that are available, we find when we use them that they consistently, 2 or 3 years behind actual salary. And we think that thatโs driven by just simply how long. But by the, by the, just by the process. So a lot of the processes up here are manual, and thereโs not a lot of transparency.
00:47:26:06 โ 00:47:53:20
Now to, to jump from left to right, to give you an example. And this is not related to, this is not related to salaries. But let me just talk about real estate prices to give you an idea. So in Australia, if you want to look at a property, thereโs a service you can do where you click on a little button and you can see exactly what that house is worth, how much it sold for last time, blah, blah.
00:47:53:21 โ 00:48:13:12
Thereโs a whole bunch of information that you can get on any property in Australia straight away, and itโs incredibly accurate and thereโs a lot of statistics and you can really support exactly what the value of that house or that property is in Australia. None of that exists here. So thereโs just no access, no data is published at all.
00:48:13:15 โ 00:48:41:25
Really, on real estate prices up here. Itโs completely, totally opaque in terms of how much anythingโs worth. And, itโs sort of, to be frank, itโs kind of similar with what weโre yet to see. Itโs kind of similar in the benchmarking servers. And the classic one that we do a lot of benchmarking on is obviously for it rolls because it rolls, you know, theyโre expensive and theyโre really competitive and so on.
00:48:41:28 โ 00:49:12:23
But consistently the benchmarking data that we get on it rolls is consistently just totally unrealistic. For, if you actually want to hire someone, to search for what youโre going to get, and like I said, we think itโs because the data it just takes them a couple of years. And, the, the, the data is just out of time.
00:49:12:26 โ 00:49:39:17
So, so thatโs, thatโs the problem. Okay. But anyway, so weโre happy to do benchmarking if anyone wants to add that. But, but but thatโs the caveat. Okay. So thereโs another question here. From Jason, I donโt know. Jason why? I can see your name and I canโt see anybody elseโs. But anyway, thatโs how it is.
00:49:39:19 โ 00:50:02:16
Okay, so Jasonโs question is, what does flat planet charge for an hourly rate for an architect with four years experience? All right, so. So how, So Iโll try to answer that question in two ways. One is, Iโll let you know what how much flat planet would charge. But in the other way, Iโll just talk about how much the salary might be, just generally.
00:50:02:19 โ 00:50:11:22
Right. So, so,
00:50:11:24 โ 00:50:38:03
It will depend. So, so with all of these things, it kind of depends. So, so one of the things that it would depend on is what type of experience the architect has had. So for example, have they got experience say working in Dubai. You know, you, you know, working in world class projects right in the Middle East or I like somebody whoโs just got four years experience just locally on different things here in Manila.
00:50:38:05 โ 00:51:09:07
So, so I would suggest that, you might find that there is value, depending on what your budget is, you might find that thereโs value in experience gained. In the Middle East. You can also find people here whoโve got experience working with Australian companies. So one of the issues is, it depends exactly what youโre talking about in terms of architect.
00:51:09:07 โ 00:51:33:02
If youโre talking about someone whoโs more drafting or as well might be someone whoโs sort of got more QS skills or whatever it is, Iโm just not just not sure, but thereโs differences in the standards. And thereโs differences in the way, obviously, that things are put together and actually constructed in the materials and all that sort of stuff that you might use in different markets.
00:51:33:04 โ 00:52:13:03
So, so what youโre looking for potentially is somebody who, so you might find that somebody with four years experience in this market, whatever, you know, is more valuable than somebody with four years experience and some other market. So, so thatโs kind of, just putting that out there. I reckon a base salary, you know, like, you know, you could probably, you know, four years experience isnโt particularly a lot of experience, you know, so youโre talking about someone whoโs, you know, still in their 20s.
00:52:13:06 โ 00:52:37:18
You know, I reckon you could probably pretty comfortably work to a budget of sort of 50 to $55,000 a month, somewhere around that sort of mark. You know, might be a bit, you know, like you have to do some skills testing and get them to do some, you know, get them to do special, you know, tests and all that sort of stuff.
00:52:37:20 โ 00:53:13:18
You know, set them some projects and so on in terms of, you know, getting to know them to build trust in their skills. Equally, you could probably push that up if you wanted someone who was really experienced, you could probably push that up towards $85,000. Sort of talking between 1500 and 2, between, you know, 15, 1,600 AUD a month, up to sort of two, 2000, 2500 a month, around, you know, somewhere in that sort of in that sort of bracket, depending on a lot of variables.
00:53:13:21 โ 00:53:44:26
So flat planet would charge, so, you know, it would be youโre talking about sort of in Australian dollars, fully loaded. The total cost would be, you know, three, you know, from 3000 to $4000 a month would be roughly the total cost of, you know, that the, the the total cost. One of the things in the Philippines is that thereโs a few, you know, thereโs on costs.
00:53:44:26 โ 00:54:11:27
You got to pay 13th months and years. Thereโs a lot of thereโs a lot of sort of added, you know, on costs. In the Philippines. And then of course you got to pay for their it all their computer equipment and stuff. So itโs roughly, you know, roughly that sort of money, I would say, yeah.
00:54:11:27 โ 00:54:53:12
So, so, okay, so thereโs some more questions that have popped up down the bottom here. Yeah. So, so it would depend, Iโm, Iโm just not like, Iโm guessing Iโm happy to have a chat about this afterwards, but Iโm guessing in our experience, a lot of the building companies and construction companies that we work with, the kind of skill set that theyโre sort of after, is for somebody whoโs working remotely, is somebody to do a lot of the, help in terms of putting together the, the so basically doing the short work and, so, so you get given the drawings and youโve got to actually then put together a, a quote
00:54:53:14 โ 00:55:27:08
or, some sort of tender document or some sort of quote document or something like that, just to sort of scope out the cost of building something. Right. So, so thatโs so itโs more that kind of queue is sort of, civil engineering slash, kickstart sort of job. This is kind of typically what we would provide, into a building company.
00:55:27:10 โ 00:55:40:07
I have been asked the question, and happy to talk later. Any other questions? Guys, Iโve pretty much come to the end of it.
00:55:40:09 โ 00:56:02:13
Chris Thomas here. We had one submitted earlier before the webinar started. And that was through, a colleague of mine who was, is paying staff well above the living wage. Does that help with staff retention?
00:56:02:15 โ 00:56:27:10
Yeah. So, I mean, obviously, you know, everyoneโs familiar with the whole idea of golden handcuffs. So you pay someone enough that they canโt afford to leave. So obviously, the basic level. Thatโs true. You know, but you donโt necessarily want to do that. I mean, you know, there comes a point where only, like, obviously we all have to run a business.
00:56:27:12 โ 00:56:54:19
So we, itโs itโs it also gets into performance and productivity and that sort of stuff. Right. So, so what you really want is, is like, weโve talked about finding a balance between the ongoings, viability or competitiveness of a company versus sustainable, living wage staff and that thereโs another dynamic, which of course, sits on top of that, which is this whole idea of productivity.
00:56:54:21 โ 00:57:56:28
So you want to be in a position where youโre sort of balancing all three. So, itโs not, necessarily, you know, in order to. So, so, yes, definitely paying someone a, a sustainable wage that that person really appreciates the values. Obviously thatโs going to drive, staff retention. But there does come a point in terms of the management of the cost base of a company where the value of holding someone, might be less than the cost that youโre paying to keep them, that thatโs a question.
00:57:57:00 โ 00:58:02:10
Yes, yes. Thanks.
00:58:02:12 โ 00:58:36:14
All right. So I think thatโs it. So thank you very much, everyone, for our first ever, weโve actually got, our next webinar is going to be really weโre working on something thatโs going to be pretty special, which will be, working on over the next month. But once again, itโs going to be weโre actually going to be looking at this whole question of, thatโs come up in the, Fair Work Commission over the last, month or two.
00:58:36:17 โ 00:58:59:10
Thereโs been a big court case with the Fair Work Commission, around the use of contractors in the Philippines. So weโre going to be talking about that, which is quite a big thing because, you wouldnโt have necessarily thought that the Australian Fair Work Commission would have a view, on contractors in the Philippines. But I do, and it applies to Australian businesses.
00:58:59:10 โ 00:59:19:15
So, so weโre going to sort of be digging into that a bit more. So thatโs coming up in a month, which weโre looking forward to. But thatโs it. Thank you very much. And weโll look forward to as a thank you all very much for attending. And, we, hope to see you again now. I think thatโs it, Tom.
00:59:19:15 โ 00:59:35:18
So Iโll just, Is that it? We turn it off. Yep. Thank you very much, everyone. All right. Thanks very much. Everyone. Chat button.
