Global Outsourcing: Is It Wrong to Pay Someone Less Based on Location?

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Lately, I’ve heard of plenty of freelancers hiring virtual assistants or subcontractors based on the other side of the globe — choosing people based in places where $200 a month is a very respectable income. The general consensus among freelancers taking utilizing this is that it can be a great way to bring on help when you can’t fully afford someone locally. It’s a way to use geography to your advantage.

I’ve also heard plenty of people declaring that paying a designer or a virtual assistant or any other type of help less than they would make in the U.S, the U.K, Europe or Australia is morally wrong.

On that side of the discussion, there are some arguments that this trend is dragging down prices for freelancers across the board, along with the idea that location shouldn’t be a consideration when you hire someone.

The Straight Business Decision

If we just talk numbers, it’s hard to argue with the fact that you can pay well over $50 for an hour’s worth of work from a U.S.-based virtual assistant, while $50 will buy you an entire week’s worth of help from someone based in the Philippines. If you need the help in the first place, good business sense says that you should get the most bang for your buck.

When it’s just a question of business, it’s easy to see that if you have the time to invest in training and finding the right person, working with someone overseas makes sense.

There is a question of quality, of course. When looking to outsource or subcontract to some place with a significantly lower hourly wage, workers from India and the Philippines have been a popular choice. That’s because in both countries, English is commonly used. But that doesn’t guarantee you’ll find someone who is actually a native speaker when looking for some help in either of those countries.

In most cases, you can get what you pay for: if you’re working with someone whose English skills aren’t on the same level as your own, you may spend half your time explaining things to them. Other quality issues also creep in, like the level of internet access available to the person you’re working with, or the types of software they work with.

There are also many freelancers (and other business professionals) that have had phenomenal experiences working with virtual assistants or contractors in countries, such as the Philippines or India — or even countries that don’t have that many English speakers. When it’s just a question of business, it’s easy to see that if you have the time to invest in training and finding the right person, working with someone overseas makes sense.

The Personal Decision

The problem creeps in because few things are actually straight business decisions. We’re not talking about working with companies — we’re talking about working with individual people. More than a few freelancers have a sore spot about how hard it can be to get paid what we’re worth by clients who see freelancers as a way to get cheap labor. When you turn that around, it’s easy to draw comparisons between what a freelancer might hate when a client does it to her and what she’s willing to do to a sub-contractor based overseas. It’s going to be a personal decision, no matter what. Your priorities decide whether or not you’re willing to pay a sub-contractor more.

For me, the personal decision comes down to what the person I’m working with is actually worth.

For me, the personal decision comes down to what the person I’m working with is actually worth. I know plenty of people who live in places like Thailand and charge rates on par with what folks living in the U.K. might (with no problem getting those rates). If someone comes to me and tells me that’s what they’re worth, I have no problem paying it.

But if the person I’m working with needs training, requires extra explanation or simplified English and generally can’t finish a project without hand holding, I’m going to pay a lot less. My preference is to work with someone I can train in person, if it comes to that, but I have worked with a virtual assistant based in the Philippines and paid him about $270 a month for his work. I don’t have a problem with doing so — he was doing fairly basic work and didn’t have a skill set that I’d be willing to pay more for. I know there are plenty of people out there who wouldn’t agree, including a few who would go so far as to tell me that I was exploiting this virtual assistant. I’d argue that he was happy to get the work, but that isn’t the point.

It’s a matter of personal comfort. If you feel that it’s wrong to pay someone less based on where they live, then you should be paying them more. As long as you know what you’re getting for your money, there doesn’t need to be an argument.

Photo credit: Some rights reserved by Elenathewise.