Transcript of the live broadcast:
Priscilla: Hi, I’m Priscilla from Inspect Real Estate and today I’m joined by David Judge from Affordable Staff. How are you going, David?
David: Very good. Are you going alright?
Priscilla: Good. Thanks for joining me on the couch today.
David: Glad to be here.
Priscilla: Wonderful. I wanted to invite David on to the Inspect Real Estate couch today because I want to find out a lot more about your business.
How Did You Get Started With Outsourcing?
David: Interesting question. So, we started off outsourcing about five years ago with Affordable Staff and before that we had an online marketing business. What actually happened was the business was growing at a really good rate and I stated finding it really hard to find really good talent in Australia that could actually perform the tasks that I needed them to perform.
So I started looking overseas and the first place I looked for was in Bangladesh. And we set up an office over in India and we’d outsource as well to Pakistan, around Europe, some of the countries around Europe, cause you’d get some really good coders, etc. from Europe. And then some of our clients came along to us and said, “Hey, you’ve been getting these people and we’ve spoken to a couple. Do you think you could get someone for me that can do this sort of administration work or tracking of jobs, or this or that?” And then it just started to grow from there. And then we thought, “You know what, this is actually growing in a reasonable rate. We should probably start investing more time in it and go that particular direction.” And that’s when we started Affordable Staff.
Priscilla: Wow. So you actually didn’t have a real estate or property background essentially.
David: No. Not at the very beginning. Although we were working with quite a few property management and real estate agencies around Australia, handling quite a few amount of their marketing activities. ProRentals was a client back in the day.
What Tasks Do People In The Real Estate Industry Outsource?
David: From a property management perspective, it’s a lot of administration stuff. Things like your processing applications and another really big task as well is your inspection reports. So your property manager’s going out and they’re going out there and they’re completing part of the property management report. Then they’re sending it through to the person in our office over there, their full-time team member. And they’re actually completing a lot of the administration side, getting ready for the property managers to actually send out.
David: There are 71 tasks now, as we’ve gone and compiled.
Priscilla: Wow, 71. Oh my goodness. I don’t think that there was 71 tasks back in the ProRentals days that we outsourced to you.
Priscilla: I wish there had been. Andrew, if you’re watching right now. Would have been amazing.
Is Outsourcing Taking Jobs Away From Local Staff?
David: Yeah and that’s a really good question because we’ve actually been along to quite a few of the conferences, property management conferences this year and last year, and it’s a common question people come up to us and ask. And you know what, I’d be lying if I don’t say that outsourcing in some ways does actually take jobs out locally. In the property management industry, we haven’t found that to be the case and in real estate. Because first of all, there’s a shortage of property managers in Australia at the moment.
David: If you look on Seek there are people who are finding it difficult to actually get property managers. On top of that, Damien who works with us, who specializes around the real estate side of the business, before he actually came along to us, he was a client two times in two different agencies. And one of the agencies he was working in had a rent roll of about 1400 properties. He was working up until 7:00 every night and he was working six days a week. So there was a big issue with burnout. Burnout within the industry. And a lot of our clients have said exactly the same thing so they say to us, “Before we are working with you, a lot of our staff, you know, we were experiencing issues with absenteeism, training up somebody, so investing a lot of time in training up somebody locally here in Australia and they burn out and they leave.”
Priscilla: Yeah and it’s a huge cost to any business when, you know, there’s staff turnover. I think one of my old directors at Rockend told me that, you know, it costs a business 1.5 times someone’s annual salary to replace someone. That sort of cost on business, any-sized business, is definitely hurts. So I can definitely see why, you know, people take up outsourcing options.
Outsourcing vs. Managed Outsourcing
David: Outsourcing is where you would take a particular task that you would outsource. So it’d be like a single individual task you’d be outsourcing. We focus more on managed outsourcing or “insourcing” as we call it. And managed outsourcing is where you actually have a full-time person that works within our office in the Philippines for the person here. Two hours time difference.
Priscilla: Okay. So more personalized.
David: Yeah and it’s two hours time difference so the same as Perth. And the big focus is incorporating that outsourced team member into the business, understanding the systems and processes specific to that business. And then having the local property managers, you know, passing on those administration tasks onto the person.
Priscilla: Yeah. And I guess that would be a big fear with any business that, you know, it’s all well and good to have an outsourced person or managed outsource person working within the business. But are they gonna know, you know, your exact process for maintenance?
How Do You Integrate Or Train The Offshore Staff?
David: Yes. We’re not actually a turnkey solution. So we don’t actually supply a fully-trained person that has an understanding of every single system and procedure for every single client. We actually tried that a little while ago, where they would say, “Okay, we’re gonna up skill people and, you know, all these different types of CRMs, and they’re going to know how to use these types of software.” And then what actually happened is we placed them in with the client and then the client had to spend an additional amount of time training them specific and how they do their own systems and processes.
So what we focus on, because we have two people full-time in our office over in the Philippines who have knowledge across a majority of the different software which we use in the industry. We have Damien who’s our local support here. We have Eva as well who acts as a support around the onboarding part. And we focus on helping the agencies connect really well with their team and giving them a set process that we’ve used in our experience, lots of times, on how to actually help and assist with that engagement.
Priscilla: Yup. So communicating would, you know, be really key to it all coming together and being a benefit to both parties.
What Kind Of Businesses In The Industry Do You Work With?
David: In this particular industry, we’ve got from 50, and that’s for an agency which is obviously looking at growing at a really really fast rate, and our largest is 7000 properties.
David: And it’s interesting because if you look at around 300 properties as an example. The person that you would be putting on the role would be performing, they’d be performing a really broad range of tasks, because obviously each of the different tasks is only gonna take up a certain amount of time for you to perform. And what they actually do is they also perform certain PA tasks as well. So they’re assisting with the agency because they’re at that particular size where they generally don’t have a BDM yet.
So they’re trying to figure out how we sort of bridge that gap to get to the next level. And then if you look at, you know, agencies around 700, they’re again different because you don’t only have a BDM, you’re trying to decide if you’re going to bring out another BDM, you’ve got that 10% drop off, that everybody know about in the industries. So your BDM is trying to get that for 700, trying to get those additional 70 on, as well as, you know, make up so they can continue to try and grow their rent roll to not reach that stagnant level.
And that’s when you start allocating again more properties to the property managers so the average number of properties per property manager, like for Damien he was managing between 150 to 180, and at 180 he said he was doing it really badly. So you can imagine how that sort of reflection for the, you know, for the customers.
Priscilla: Yeah, definitely. The quality that they’re getting, having a system like yours, obviously a lot better.
David: Yeah, especially. Cause there’s a big focus for us, there’s a big focus for us around the supporting of the local staff within the business. Because being and working with a number of clients now, when we were doing the online marketing side of the business, working with clients then and them telling us how horrible, sorry, how horrible it is sometimes, it’s not a forgiving job.
But we found that, you know, it can free up the time for local people and it gives them a lot more options to be able to focus on the stuff that they should be doing as a property manager.
Priscilla: Like the fun stuff. Yeah. The fun stuff of listing new business, you know. Conversing with your landlords and tenants and, you know, I know that when I was managing my portfolio, yeah, I managed 242 properties and it was a lot. And we worked really really hard. We didn’t have 71 items that were outsourced. And I think that the quality probably wasn’t there on a lot of the properties but if had a system like this, it would have enabled us to probably manage bigger portfolios. Probably better as well.
David: One of our clients, their property management staff, in between, I think it’s Tuesday, Wednesday, Thursday, in between 10 AM in the morning to 3 PM in the afternoon, no one’s in the office. They’re out there doing what they’re supposed to be doing.
David: And all of their support administration team in our office in the Philippines, they know what they have to do. We’ve been working with them now for a couple of years. And they’re just there performing all the tasks, the property managers come back in, everything’s done. They can have afternoon tea, they can go home at a reasonable hour.
What’s The Financial Benefit Of Outsourcing?
David: Financial benefit. An outsourced team member will be somewhere between a 3rd or a quarter of the price of person that you would be employing locally. So I guess that’s the direct financial benefit.
The indirect financial benefit, you know, when you have a look at having the support there for the local property managers, the ability for those property managers to go out there and get more business, cause their time has freed up. And when, you know yourself, when you’re able to go there and get all the tasks done, all that fronting client-facing stuff done, the client satisfaction improves, which mean they’re going to obviously want to stay with you. They’re going to refer more people.
So, that’s what we found. By having that, lots of little things add up, which then have that financial gain of continued growth of rent roll.
Priscilla: Yeah definitely. My property manager actually at Rockhampton, she outsources a lot of her work, which does enable her to, you know, converse more with the landlords. I mean, I hear from her all the time, probably more than what I really need to. But it gives that level of service that, you know, I probably wouldn’t get from any other agency.
David: Yeah, exactly.
Priscilla: And she’s one of two people in the business. And I think there are over about 300 managements now. So it’s definitely working for her.
What Factors Do Clients Look At When Outsourcing?
David: There’s a couple of things and that’s a really good question. One common thing that comes up when people are talking to us, they want to understand what level of support there is. So they’ve gone, they may have outsourced beforehand, and have gone to Company XYZ. They’ve employed an outsourced team member, and then they start Day 1, and then that’s it. There’s no contact from the company, whatsoever. So they want to be able to understand that they’re going to have that support, the support that’s there. And like for us, you know, we have our local Australian support, as well as supervisors overseas that can be contacted by clients as well. So a big thing around support.
And then there’s some really interesting questions like, we had a client come on board and they said “Oh, we were actually looking at another outsourcing company. Then they sent us a bill to set up and connect the internet and the first month’s electricity.”
Priscilla: Oh wow.
David: And so like, why’s that? So, understanding if there are any hidden costs.
David: So you know like exactly what they’re getting when they’re employing a person, you know, how much that’s going to cost. And then the third thing, the third most common thing is understanding the true cost benefit around what it’s actually going to mean for a business. And then finally people, they want to be able to understand how to do the integration.
So that’s where we come in because we have experience in the outsourcing side as well as the real estate property management world.
What Other Tasks Do PMs Outsource To You?
David: Yeah, so we actually have a team of website designers. They just grew because all of our existing clients, once they come on board and they employ an outsourced team member, then you know, we’ll be talking to them and say “Your website needs to be updated.”
Priscilla: Yeah sort of as a Pandora’s box.
David: Exactly. So now we just have a full-time team of people. We did some work for you, we’ve been working with InspectRealEstate for years now.
Priscilla: Yeah, TenantApp.
David: Yes, that’s right.
Priscilla: The new website that’s up. Yeah it’s awesome.
David: So they engage us around a lot of that side of the business. Because we have a fairly long history around online marketing as well and understanding the key foundation and principles around online marketing and how to improve the exposure of a website, etc. etc.
Clients actually come to us and they say “Oh look, if my person, you know, Jenny, has extra time, what are the little social media, what are the little tasks that they could be performing?” So then we’ll give them advice and we’ll say “Hey look, this is what we found what has worked really really well for a client. This is what we’re doing ourselves personally at the moment.” Cause we produce a lot of video content and we’re out there in the social space and the email marketing space quite a fair amount.
Yeah and in the market at the moment or, you know, now, everyone wants to have a digital footprint. Everybody, you know, you need to be top of mind. You need to be out there on those platforms. And for a lot of real estate offices, they don’t know where to start with it.
David: Yes. There’s a lot of information out there on the marketplace. And it’s a question of what makes sense in the offline world to do is exactly the same in the online world.
Priscilla: Oh wow, that’s a good analogy.
David: So if it makes sense to, like for a property manager or a person who owns a real estate agency. They want to be seen as the lord mayor of their area. They want to be knowledgeable on everything that’s happening. They want everyone to see, they want to be able to share everybody that they know about the area, that they understand where the cafes are, where the schools are, where the parks are, all that sort of information.
And if you can go and take that and you can share that on as a part of your digital footprint, then that positions you as an authority within your industry. And that’s the sort of stuff that Google likes.
Priscilla: Yeah. And then you become a trustworthy adviser within, you know, your community, and that’s increasing hopefully business for the agency.
David: Yeah, exactly.
How Do You See The Growth Of Outsourcing?
David: I’d say it’s massively upwards trending at the moment. And the advice that I would give to anybody that’s looking within the industry is make sure that you’re using a trusted resource.
Cause it’s easy to go into somewhere like Upwork, you know, which is a common example. Easy to go into somewhere like Upwork and just you know go out there and think “Oh I can get someone for 5, 6, 7 dollars an hour.”
And we’ve invested a lot in our infrastructure in things. Like we have an incorporated business set up in the Philippines, which means we have non-disclosure agreements and they’re legally-binding non-disclosure agreements. If you don’t have an incorporated business set up within the Philippines, or you’re using an outsource company that don’t have that, then there are no agreements in place. You’re walking in shaky agreements.
Priscilla: Yeah. Yup. Things can get messy.
David: And we’re working with a lot of accountants, financial planners, and loans brokers. So there’s a lot of, there’s a lot of security and infrastructure we had to put in place to prevent the theft of client data.
We focus on relationship development.
Priscilla: Yeah, and knowing your client and understanding their businesses and understanding their business, their processes, you know. There’s so much more to it than just picking someone to do, you know, your arrears calls, essentially.
David: Yes. That’s why we specialize in specific industries, instead of just the blanket approach to outsourcing.