Case Study: Transitioning a Philippine Back-Office Company into a Full-Managed Service for an Australian Engineering Company
Our client for this case study is an engineering company headquartered in Western Australia with offices and branches in other parts of Australia and in Asia. In 2012, they set up a registered company in the Philippines to perform back office functions, which proved highly effective. When their local leadership decided to move on, they saw an opportunity to revitalize the team with a new structure while also reducing costs.
Wins
- Morale
- Productivity
- Cost
Executive Summary
Our client for this case study is an engineering company headquartered in Western Australia with offices and branches in other parts of Australia and in Asia. In 2012, they set up a registered company in the Philippines to perform back office functions, which proved highly effective. When their local leadership decided to move on, they saw an opportunity to revitalize the team with a new structure while also reducing costs.
Client’s Challenges
- Provide local leadership to a well established team
- Improve efficiency and productivity by lifting morale
- Reduce costs
- Maintain stability and retain staff
The Yempo Solution
- Planned and executed a seamless transition into a full managed service
- Absorbed redundant functions such as Finance and HR to reduce cost
- Assisted with the shutdown of the Philippines company
- Provided a values-driven culture with strong local leadership aligned to the client’s own objectives
Impact on Client’s Business
- Reduced costs by eliminating Philippines company structure and removing the need for local Finance and HR functions
- Seamless transition; no impact to output or engagement with Australian team
- Improved morale in the Philippines team as they became part of a larger team and have increased staff benefits
Client’s Challenges
This well-established Western Australian engineering enterprise had been operating in the Philippines for over three years, with a local management team providing part-time leadership on their behalf. When the local management elected to pursue another opportunity, the Client was left with a leadership gap. The Client recognized this presented an opportunity to rejuvenate the team by introducing a new style of local leadership, with potential for cost savings too.
They also realized, over the course of their three years of operating in the Philippines, that maintaining their own office was expensive. The cost of providing adequate leadership that supported their culture, maintaining all the permits and compliance arrangements associated with running a company were higher than expected. For a team of less than 50 staff, it was not proving cost effective to run a private office.
The Client engaged Yempo to deliver local support in the interim while potential solutions were identified and examined. Yempo’s CEO, Michelle Fiegehen, provided on-site leadership on a daily basis to the Cebu based team, while preparing a proposal for moving forward.
“I wish Yempo had been around when we first commenced setting up a support centre in the Philippines as they made everything so much easier. Having an Australian living in the Philippines definitely helped as Michelle was able to understand the differences in cultural and legal requirements of each country.” – General Manager
In order to retain their highly-valued staff in the Philippines, it was imperative that any transition would not have a negative impact; no loss of staff and no disruption to work output.
The Yempo Solution
Working closely with the Australian management team, Yempo engaged with stakeholders to understand the key objectives and desired outcomes for retaining the Philippines based team. This enabled a full proposal to be developed, which included the following options:
- Hiring a local Filipino manager to fill the leadership gap
- Hiring a local expat manager to fill the leadership gap
- Despatching an Australian manager from the Client’s Head Office to lead the Philippines based team on-site
- Continuing to utilise Yempo’s management to provide local leadership
- Transitioning the Philippines based team into Yempo and closing the Philippines company
Once the options were fully costed and discussed amongst the Client’s Australian leadership team, the decision was made to transition to a fully managed service with Yempo.
A phased approach was taken which allowed for a detailed communication strategy to be developed and implemented. Engagement with the Client’s staff was high, with question and answer and meet-and-greet sessions with other Yempo employees. Over a period of a month, employees were able to understand the implications and exact financial impact to them of being made redundant by the Client while in parrallel being offered new contracts with Yempo.
“Our greatest concern was how our staff would accept the transition to being employed by Yempo while still performing our work. There was no need for concern thanks to working with Michelle, and the communication we had with the staff.” – General Manager
Impact on Client’s Business
Our client continues to be supported by a highly efficient team in the Philippines, that was not just happy with the move to Yempo, but delighted to receive benefits exceeding those in their original contracts. There was no negative impact on the engagement between the local team and the Australian office; work continued smoothly throughout the transition and staff are productive.
Yempo provides senior management that functions like senior members of the Client’s own team and communicates regularly and proactively.
Yempo’s broad experience with both Filipino and Australian culture coupled with a values-driven business ethic ensured the flawless implementation of this business transition. Yempo is a trusted partner acting as the Client’s eyes and ears on the ground providing strong Western leadership, embodying the Client’s own cultural values.
The partnership with Yempo has allowed the Client to:
- Maintain uninterrupted operations with their valued Filipino team
- Engage with a management team that has deep experience in both Western and Asian culture and business etiquette
- Reduce costs by closing down the Philippine company, avoiding all associated company and employee compliance overhead and HR and Finance functions
- Gain productivity improvements by re-energising a team with flagging morale
- Manage cash flow requirements through fixed exchange rates and monthly costs for the team.
“Michelle and her team are trustworthy, solutions orientated and innovative” – Director
