How To Know If You’re Ready To Hire Offshore

Steve Hutt:

Welcome back to eCommerce Fastlane. I’m your host, Steve Hutt.

Today we’re going to talk a little bit about building what I’m going to call an offshore team that actually works. That’s the imperative part.

Think about it: if your support inbox, fulfillment handoff challenges, or daily operations are all running through one or two people who may be the bottleneck of the business, this episode is definitely going to be for you.

And if you’re not really ready yet to make an offshore hire, I believe you should stick around because the most useful part of today’s conversation is really how to tell the difference between when you’re ready and when you’re not ready for an offshore hire.

My guest and I did some research before recording today, and my guest mentioned that cost savings really is the wrong reason to hire offshore. Brands that are chasing literally the cheapest labor end up actually paying a lot more. In some cases, he makes the argument that sometimes you’re paying double what you should be paying. Hopefully, we get into exactly what he means about that in a few minutes.

My guest is Nico, the CEO and co-founder of Pen Brothers. I believe they started in 2014, and he built a remote team, or does build remote teams, for hundreds of companies around the world.

Even his own organization there in the Philippines now has over 1,000 people as part of the organization.

I’m really hoping that by the end of this, you’ll understand the different roles that you can start off with, why people need an offshore team, how to tell when you’re ready to make this sort of hire, and the benefits and upside that brands get by having an offshore team out of the Philippines.

So, Nico, welcome to the show.

Nicolas Bivero:

Yeah, Steve, thank you for having me. It’s a pleasure to be here. And thank you for that short introduction about what we do. I’m happy to explain a little bit more and go deeper.

Steve Hutt:

Yeah, absolutely.

It’s interesting. You started, from what I understand, in 2014. You had one office in the Metro Manila, Philippines, area. Can you talk a bit about what you were actually trying to fix maybe in the first year of operations with your company?

Nicolas Bivero:

Yeah, absolutely. I think at the beginning, when we started, there were a lot of things we had to fix.

We had the experience of building teams in the Philippines, but not by ourselves. We did it for my previous employer, always using existing local infrastructure, local teams, and partners.

Doing it ourselves, my co-founder and I, was obviously a little bit different. We learned very quickly that we had figured out a few things well based on our experience, and a few things that we completely underestimated.

Simple things, for example, when we set up our first little office, we thought that we had installed good internet and strong enough Wi-Fi. Then we realized within the first month that was definitely not the case.

Steve Hutt:

Mm-hmm.

Nicolas Bivero:

We had completely underestimated what it takes to run as little as 30 people from an office space, all using Wi-Fi and all connecting.

Little things like that, at the end of the day, you’re trying to shoestring everything. You try to make it work with as little money as possible while still providing as high-quality a service as you can.

That was an interesting learning, to be very honest. We learned a lot.

Steve Hutt:

Yeah, it’s interesting because I believe you lived in quite a few different countries. And likely, just being an entrepreneurial person, I’m sure you’ve seen a lot of talented people leave home to go and find work.

It’s so interesting that that just seems to be the reality. But I think post-COVID, that’s actually not really a reality anymore.

It seems that part of the DNA now of Pen Brothers is about finding talented people, in this particular case in the Philippines, and then giving them an opportunity.

I think you’re the source of truth now for people looking for this sort of high-quality talent, and you’re giving the local talent pool in the Philippines an opportunity to work from home instead of having to physically move to other countries.

Nicolas Bivero:

I think a few things came together, and obviously COVID helped a lot, even though COVID was terrible for everybody. In the Philippines, we had very strict restrictions.

At the end of the day, during COVID, every company around the world, in different magnitudes, had to work remotely. They had to manage a team remotely, set up the systems to be able to do it, and learned through that that having a remote team, having remote team members, is not impossible.

It’s actually workable. It can be done. It can be done well, and it can actually be quite strong as an addition to the team that you have on site.

So, in the Philippines, a few things came together that allowed us to offer the service.

Nicolas Bivero:

One was the learning during COVID, but also the fact that even before COVID there were large investments by very large corporations, be they American, Australian, or European, that were building initial call centers.

Then, over time, they were actually increasing the experience level and quality of the talent and building what they call captive centers. So, really big offices in the Philippines that they own, operate, and manage to support their global operations.

To give you a couple of examples, the Big Four accounting firms all have big offices in the Philippines that support their accounting operations globally.

Marketing companies like WPP, for example, have big operations in the Philippines that support their global sister companies and daughter companies, and so on and so forth.

There are many, many examples.

That kind of investment those big corporations were making, coupled with the experience from COVID, as well as the investments the government and private companies made in the Philippines into infrastructure, like good internet, redundancies, and so on, allowed companies like us to come in and offer this service.

Basically, we’re the bridge between Filipinos who are looking for interesting, high-quality work opportunities and non-gigantic companies that are looking for good talent, be it in the Philippines or anywhere else.

That’s where we come in.

Nicolas Bivero:

We build that bridge and pair the SMEs or startups that are looking for more diverse talent or different talent with Filipinos who are looking for those jobs. Then we bring those two things together and help set it up and manage it over time.

A few things had to come together. This would not have been possible, I guess, 30 years ago.

Pre-COVID, it was already possible, but it was much harder to make it work and to sell it because companies were not too open to the idea of having remote teams. Nowadays, it has become much easier.

Steve Hutt:

Yeah, this is so interesting.

I think about a growing e-commerce brand. When do they realize that maybe they have a capacity problem?

You obviously take enough vetting calls with potential e-commerce brands that are interested in hiring some offshore talent. Knowing that, is it truly a capacity problem they have, or is it a demand problem?

I guess I just don’t know what problem they’re trying to solve. And then, what do you see from your end on a growing brand when they do reach out to you? What’s the pain that Pen Brothers solves for them?

Nicolas Bivero:

Yeah, it’s a great question. I think it really depends on the company, and in this case, the e-commerce company.

To give you some examples of what we have seen, we have seen some that really knock on the door and look at the Philippines and other alternatives because it’s a capacity issue. They’re not able to hire people quickly enough in their own backyard because there aren’t enough people or it’s too expensive. It would burn their cash too fast, for example.

But we have also seen examples where people knock on the door because they now have to cater, in their e-commerce platform, for 24/7 operations, for example, or 24/7 fulfillment or customer support.

Again, that’s not something that’s very easy to set up locally, specifically if you operate in high-cost countries.

Young people nowadays in many first-world countries do not want to work at night, on weekends, or on holidays.

Nicolas Bivero:

So, it’s both a capacity and a talent availability challenge.

At the same time, it’s also many times about the quality of the talent itself. The Philippines, with 110 million people, has a lot of people and a lot of qualified people.

It can also be a supply-side consideration. Where can I actually find people who have the experience, training, and willingness to build with me whatever I’m trying to build?

The Philippines happens to be one of those countries where you have a lot of supply, good supply, and a high-quality supply of talent.

Steve Hutt:

Yeah, it’s interesting.

When a DTC brand actually comes to you, let’s say for the first time, which roles do you tell them? Not that you’re forcing your business logic on them, but there’s obviously an ongoing dialogue.

Where do you see the most roles that are implemented or can be handed off through Pen Brothers? I’m curious, and why are those ones the most popular, certainly at the beginning stages of moving some of the business logic or business work through Pen Brothers?

Nicolas Bivero:

Yeah, I think generally speaking, this applies to every organization that’s looking for this.

We always recommend starting with roles that are very process-driven, where it’s easier to identify: What are the KPIs? What are the processes?

You can easily onboard a person or a team remotely because it’s easy to explain.

Steve Hutt:

Right.

Nicolas Bivero:

There are clear technical requirements, so you know what you’re looking for and what success looks like.

It’s much more difficult if you try to do this with roles that are much more creative.

For example, if you’re going to hire somebody for a much more creative role where success is much more in the eye of the beholder, that becomes tricky because the person might do a great job, but it’s not what the counterparty wanted.

So, process-driven roles, roles that are easier to onboard and easier to explain, are the ones that we always recommend to start with because it’s clearer what success looks like.

It’s also easier to identify good talent based on those more process-driven job descriptions.

That’s what we always recommend, regardless of what type of company you are and what type of service you provide.

Steve Hutt:

Yeah. Okay, that’s very interesting.

You did mention that before recording, we talked about the cost savings of getting offshore talent. That’s really the wrong reason to go offshore, kind of how you’re positioning it.

Can you unpack that for me?

I guess my thought is that hiring the wrong person creates the wrong outcomes, and then all of a sudden that has a financial impact on the business versus just making the right choice.

They always say that hiring someone can be very—I mean, even at Shopify when I was there, they had that life story kind of interview and multiple interviews. Even potentially with your lead on the third interview, they were very, very particular because they knew the cost associated with getting a bad hire is very expensive.

All of the work, all the time, all the contracts, all the craziness, and then it just goes into the garbage and you have to start all over again.

Steve Hutt:

And I think Pen Brothers goes about it a little bit differently. We talk about how it’s not just cost savings. You do get that, but I’d like to unpack that a little further.

Nicolas Bivero:

Yeah, absolutely.

I think if you—how can I put this? Cost savings itself should be a benefit. It should be an after or secondary benefit of building a remote team, ideally, but it shouldn’t be your main driver, at least in my opinion.

Of course, it can be a very important reason to do it, but it shouldn’t be your main driver because then, if cost saving is the only thing you care about, you’re starting to look at people, at your talent, at your employees, like warm bodies and numbers that you don’t care about.

Then, in that moment, it very easily goes wrong because you might be trying to find the cheapest person possible, which doesn’t necessarily mean that they have the right quality or the right experience.

You also start treating them like cheap labor. So you don’t help them, you don’t set them up for success, you don’t onboard them properly, and you don’t train them.

If cost saving is the only thing you care about, it is likely—it doesn’t have to be, but it’s likely—that it will not give you the benefits that you’re really looking for.

Nicolas Bivero:

So, if you turn it around and say, “Sure, I’m looking for better cost efficiency,” let’s call it that, not just cost saving, “but at the same time, I actually want good-quality talent. I want people who are motivated. I want people who are engaged and become real members of the team.”

If you look at that and make cost saving part of the equation, but the other elements are also part of the equation, then you start treating them like an integral part of your team.

Your interview process and your recruitment process will be much more nuanced and calibrated. Then you’re looking for long-term quality that you’re bringing into your organization to really keep building and growing.

I think in that moment, you will find really good people in the Philippines and also in other countries, be it India, Colombia, or other lower-cost countries.

Yes, the people are less expensive, but they have quality.

Nicolas Bivero:

They’re good. They’re motivated. They want to be part of your team. They want to grow with you as a company.

In that moment, you can build an exceedingly strong team while at the same time achieving cost savings.

So, it’s the overall package.

Cost savings alone, for me, is too myopic. It’s not a broad enough approach to what you can actually create when you build remote teams in the Philippines or in other places.

Steve Hutt:

It’s so amazing.

I did look at some of the case studies. It’s interesting. There are a lot of amazing brands that use Pen Brothers as part of truly building a team. They’re not just, quote-unquote, cheap labor.

Yes, that’s part of your ledger for sure, but that’s not necessarily the only motivating factor.

I think treating them like high-quality employees for your business could prevent a lot of failures for some brands that truly are just treating them like offshore teams versus part of the business.

Steve Hutt:

They just happen to live in the Philippines.

I think that’s an interesting mindset shift that people need to think about.

When I look at these success stories, and I’m sure there are many others that maybe aren’t published and are under NDA, is there anyone of note that you could think about saying, “Here’s what their life was without Pen Brothers, they got involved with us, and now here’s what their life is like with the hiring or hirings that they have done, and what success or great looks like for them today”?

Nicolas Bivero:

Yeah, absolutely.

I can use one which is obviously close to my heart because it’s the company that was our first client and still is a client of ours.

They’re an e-commerce company. They started, they needed to scale their team. They had raised Series A. They needed more people, and they were looking for a software developer, an accountant, and at that time, actually, a Photoshop editor to really clean up the pictures they were taking for the things they were selling on their e-commerce platform.

So, quite interesting.

Nicolas Bivero:

Now, fast forward to today, there are over 80 people in the Philippines out of a total headcount of maybe 130.

If you put this in context, about 70% of the organization is actually in the Philippines.

They have critical resources from software development to finance, accounting, procurement, and fulfillment in the Philippines.

Without the Filipinos, that company wouldn’t have been that successful.

Beyond that, that company, while still being a client, sold itself a few years back to a larger organization.

But then, if you look at the way organizations buy other companies, it’s always a multiple of EBITDA.

Now, if you, on top of having a great team, also have a very cost-effective or efficient team, which means that you have a higher EBITDA and better margins, then you also get a higher multiple. Overall, you make more money when you get to the point that you’re selling your company.

So, I think that company is an example of building a remote team that was an all-around success, from the quality of the people to actually scaling the company and growing the company, to the value of the remote team when they sold the company.

Nicolas Bivero:

So, that’s a beautiful example, in my opinion, at least, but obviously I’m biased, that really worked out for the owners and founders.

Steve Hutt:

Yeah, that’s amazing. Thanks for sharing that. I’ll put that link in the show notes for sure.

My question is around physically where these workers work from.

Are these work-from-home opportunities? For people that have signed up—let’s say these are people in the Philippines who are looking for work, have been vetted, and have the talent that has a need for it, be it customer service through to engineering—once they sign up, are they working out of a Pen Brothers kind of co-location? Are they working from home?

I’d like to figure that out.

And then the next step is, what is the communication style that most North American brands are using with these remote workers? I’m sure there’s a certain level of management control. It’s not kind of a free-for-all. How do we make sure the correct work is being done? There are audits and things like that. I’m just curious about the overall function and flow.

Nicolas Bivero:

Yeah, absolutely.

Let me start with the first question. Nowadays, that really comes down to the client’s preference.

Steve Hutt:

Okay.

Nicolas Bivero:

We have many clients nowadays, after COVID significantly changed things, who are completely open to having their talent work remotely.

In that moment, we set them up remotely. That could be from their home, a local coworking area, or a third-party provider.

That really comes down to the client.

But we also have clients who, either for their whole team or for certain parts of their team with us in the Philippines, want the people working either fully from the office, from one of our offices, or partially.

It’s really up to the client.

We do have clients who have, let’s say, the accounting team or finance team, which requires a little bit more of a security setting. So then they work fully from our offices.

Nicolas Bivero:

But regardless of that, because the people are already working remotely in the Philippines, the majority of clients are completely happy with having the people working either remotely at their home or at a remote coworking space that isn’t necessarily ours.

That’s a significant change to what it was pre-COVID.

Pre-COVID, people were building teams in the Philippines remotely, but then insisted that everybody had to be in the office, which kind of beats the purpose a little bit, to be very honest.

For your second question about the processes, the most successful clients that we have seen are those who treat that remote team as a part of their own core team.

Steve Hutt:

I see.

Nicolas Bivero:

You would set up the same processes and the same structures that you would set up with the team that’s working next to you in your home state or your home country.

You would have check-ins, huddles, reporting lines and structures, Monday morning team meetings, and so on and so forth.

So, you actually replicate the same thing you do at home.

For that to work, though, you need to align the working hours.

What we see most of the time is that people work either fully on Canadian or U.S. time, or have an overlap that’s sufficiently long, let’s say two, three, or four hours, that people can work with each other, talk to each other, see each other on screen, and so on and so forth.

And last but not least, the same as you would if you’re a growing organization—let’s say you’re in Vancouver but you have a larger team in San Francisco—you would also, from time to time, send somebody down there and visit them and meet them, or bring them up and join team-building activities and whatnot.

We see the same with remote teams.

We have many clients who then visit the Philippines and do team-building activities and training and whatnot, and vice versa. Specifically for clients that are more in the vicinity, those new employees fly over to the client’s head office and get a week or two weeks of onboarding and training.

Nicolas Bivero:

So, I think at the end of the day, the more you treat them like a core part of your team, the more likely it will be successful.

Steve Hutt:

Yeah, it sounds like even in Shopify, for example, when I was there, obviously I was a Merchant Success Team member. I would have a book of merchants, and there was a certain requirement of what my day-to-day looked like.

But I also had a team lead, and we just called them People Accelerators. They were managing their team. They’re not doing client-facing work. Their work was to make sure that anything that the team members, me for example, needed was there.

There was ongoing training, and yes, we had weekly standups.

Steve Hutt:

Sometimes we would do async things where they would do a quick five-minute video.

“Hey guys, yada, yada, yada. I know everybody’s busy this week, but just so you know.”

And off it goes into Slack.

Then we had our own dedicated Slack and shared Slack channels. So, you’re overall part of the organization. You could see what engineering and marketing were doing. Then you were also in the success organization and knew what was going on, and you could see what was happening in the sales organization.

Steve Hutt:

I think so. Overall, I agree with you.

I think it’s really cool that that’s the mindset of exactly what large SaaS companies do. You don’t necessarily need to be from within the North American market.

You can have people, and we do. Shopify has locations all around the world and leads all around the world—people in the APAC region, people in Europe, and all over.

Clearly, that success works.

Steve Hutt:

So, this is really great to hear. Yeah, I love that.

I want to talk about the Hypercare because I saw this framework and I’ve never heard of it before.

I think it’s interesting because I guess the premise is that maybe the typical failure rate of getting somebody offshore as a new hire can be high. Things can fall off the rails a bit without having a system and a process.

Can you let us know what the Hypercare Framework actually is and how it might be useful for those who are listening today?

Nicolas Bivero:

No, absolutely.

At the end of the day, over—we’ve been doing this for 12 years. We were looking at which clients were more successful in onboarding members and which clients were less successful. Then we’re assessing that data.

We identified a few key things, including our own employees that we hire to provide our service.

We realized very quickly that it really comes down to helping both sides—the employee as well as the client—to have a successful onboarding of their team member and their teams, and onboarding themselves as part of the team.

So, what do I mean by that?

We created a system that’s a six-month process where we work with a client if it’s a brand-new client, and even if they have already worked with Filipinos, we always start with the assumption that it’s something that’s new to them.

So, we help them learn more about the Philippines, Philippine culture, working with Filipinos, and how to manage Filipino teams remotely.

Nicolas Bivero:

So, we help them with that type of onboarding and training.

At the same time, we do the same with the employee or employees that they’re hiring.

They also undergo a six-month hand-holding, let’s call it that. That’s why we call it Hypercare, where we onboard them.

We have weekly touchpoints at the beginning from our HR team to see how they are, how they’re doing, if there are any problems or challenges, and anything we can communicate back to the client.

We try to be, as much as possible, that HR business partner, that bridge builder, to enable the new employee to successfully onboard himself or herself.

And vice versa, also from a customer success side, to really help the client onboard themselves because it’s not easy to have a remote team. I’m not underestimating the challenges of having a remote team.

Steve Hutt:

Yeah.

Nicolas Bivero:

But because it’s not easy, we build the system to be that bridge.

That doesn’t mean that after six months we’re done, we walk away, and we’re not there anymore. Of course, we keep supporting.

But the first six months is the most critical.

What we have seen in our numbers is that if you do this correctly, if you make it happen, the success rate of new employees staying on after six months is much higher.

At the same time, equally, the success rate of clients who then hire one person and are happy, and then hire a second, a third, a fourth, and so on and so forth, is much higher.

So, it’s a system that we established, and the time and money that we invested into it is because we really believe that we need to enable both parties to be successful.

If we enable them to be successful, then automatically, clients will grow with us.

Steve Hutt:

I see.

So, Filipinos learn about Pen Brothers because they’re employment-seeking humans and they’re looking for new opportunities for themselves. So they become available through Pen Brothers.

Then I guess part of the original onboarding process or discovery call is that we understand maybe any roles or certain things where there’s a hiring gap.

I think that’s the process you go through. You find these gaps, discuss some of the options, and then once Pen Brothers finds and vets appropriate talent, in the end, the brand makes the decision of who they’re hiring and why.

But what happens moving forward?

Is salary negotiation part of something that Pen Brothers offers? Is there a recommended salary based on the role and their experience?

And then physically, how is the brand paying the end talent? Are they on payroll with Pen Brothers? Are they on payroll directly?

I’m worried about an international taxation thing and how brands look at it.

Nicolas Bivero:

Yeah, so basically, we are an EOR, an employer of record, with bells and whistles.

We are the ones who then employ the person. We’re responsible for everything that has to do with Philippine labor law compliance, tax compliance, and so on and so forth.

That’s on our end.

Then we have a B2B agreement with a client.

The client basically—but it’s a transparent B2B agreement.

What I mean by that is that it’s immediately clear to the client and visible at any point in time how much the overall salary is, how much of that goes to the employee, how much goes for taxation, how much goes to Social Security, and so on and so forth.

It’s a transparent system because I believe that if you want to treat your people as an integral part of your team, you need to be transparent about it. You need to know what goes where and into which pocket.

Nicolas Bivero:

Otherwise, there are too many incentives to—

Steve Hutt:

Yeah.

Nicolas Bivero:

Do this incorrectly or try to, I guess, push salaries down or other things that maybe companies do that I disagree with.

Anyway, I’m digressing.

Going back to your question, at the end of the day, the employment risk is with us. That’s why we charge a management fee.

And the bells and whistles that I mentioned before have to do with your first part of the question.

We will do the heavy lifting on recruitment by identifying the right candidates and delivering them to our clients.

The clients will then do their next-level interviews. We will schedule everything, arrange everything, and coordinate with the clients to make sure who they like, who they want to shortlist, and who they want to move on with a job offer.

Nicolas Bivero:

But we, at every point in time along this process, are there consultatively.

We help them identify, okay, this is the right salary for this person. These are the right benefits for this type of experience level and salary level.

Benefits meaning, for example, HMO, like health insurance packages, and so on and so forth.

We’re really there because it’s very easy to get confused when you build a remote team about what’s the right salary.

This looks like a really great salary, but then when you actually do the research, you realize, oh, it’s too high or maybe it’s too low.

So, things like that.

Nicolas Bivero:

We’re always there supporting the client to think through it and identify what’s the right way of doing it based on our experience and know-how in the Philippines.

And not only during the hiring process, but also later on, like on an annual basis, we help with salary benchmarking and all that.

The Philippines, being an upper-middle-class country, has salary inflation or wage inflation. So you need to adjust for that.

If you don’t adjust for that, people will assume that you don’t like them, and then they will find another job.

All those little nuances that you might not have in your home country, or not to such a degree, we’re always there to support.

As I said, once the client decides that they want to employ a person, then we kick in and become the employer.

Then we turn around from employing the person to becoming your HR business partner in the Philippines, to support you with anything afterward that is needed, from team building to facilitating learning and development to troubleshooting if there’s a problem with an employee and so on and so forth.

So, we are your HR partner in the Philippines.

Nicolas Bivero:

That’s the bells and whistles.

Steve Hutt:

It was interesting too because I think a lot of brands get started thinking about the cost-saving side of it, and they go down the gig economy road and hire someone for a particular project or test temporarily, just to see how it works out.

The reality with a system like that, and I have firsthand experience with it, is that then you’re forced to send these contract agreements saying, “Hey, you know what? You’re an independent contractor. You’re responsible for your own taxes. Please sign here,” and doing an annual one like that.

I think it opens up a can of worms.

You brought up the comment about EBITDA and your multiple for a potential exit. Not having proper systems in place about how you’re scaling the business from a workforce perspective—if you have just a bunch of outsourcers that you’ve hired, and yeah, fine, you have a shared Slack channel with a lot of people that you’ve hired off Fiverr, but it’s not really true culture building.

As you said, salary negotiations and benchmarking and understanding, “Hey, where are these people going? Are they part of the business?”

I think that’s—you guys are the source of truth where people become part of Pen Brothers.

Steve Hutt:

And then from there, brands feel comfortable with a small management fee from the brand to you guys.

You’re making sure that we vet and have great talent available, and then just continue to grow the business as part of an arm of the business.

So, it’s quite interesting in relation to the gig economy, which is kind of the entry point, I think, for trying to find external talent.

Nicolas Bivero:

Yeah, I agree.

I think the gig economy is very valuable, and it’s a great way of actually experimenting with it, trying it out, and seeing if it works and if there is actually good talent.

But the moment you are planning to scale this and make it a real part of your business, then the gig economy can only take you that far, in my personal opinion.

Because as you said yourself, those are independent contractor contracts. You don’t know if they’re paying their taxes. You don’t know if they have Social Security or if they paid for it.

I can give you an example.

We have a client that started with us about 10 years ago, in 2016.

Nicolas Bivero:

They came to us, and they had five or six freelancers that they were hiring directly and paying through, I guess, PayPal or whatever was the right thing to do at that time.

One of them got pregnant, and then she went to the doctor. The doctor said, “Well, that’s so nice and shiny, but you need to start paying cash or paying because you didn’t pay Social Security, you didn’t pay Philippine health insurance, so you cannot avail from it.”

She was a little bit unhappy about that and started raising this to her employer, or the person that she perceived was her employer, even though she was a freelancer.

Humans at that moment will go to whoever they feel they have a connection to and feel is co-responsible, I guess, in a way.

Then the employer looked at it and said, “Well, this is not long-term sustainable, specifically not if I want to build a bigger team.”

And that’s how they came to us.

By now, they’re over 100 people also.

Nicolas Bivero:

So, I think freelancing is great, but it comes with complications, specifically if you’re scaling it.

I can give you many more examples.

What about data privacy? What about the systems and the laptops they use? Are they properly set up? Are they compliant? Do you have control over them?

What about other components that are important?

All of that comes in once you start scaling and growing, which I think the gig economy can only take you that far.

Then it starts becoming more critical that you really think it through and say, “Well, is this still the right structure, or should I maybe do it differently and more compliantly?”

And also, do I want to retain the people? Because retention of very good talent is not as easy through the gig economy, in my opinion.

Steve Hutt:

No, that’s true. Yeah, that’s very true.

It’s a little bit of a shiny object too because, rightfully so, they are a little bit selfish. I think they always have a lot of irons in the fire.

They’re not just on Fiverr. They’re on a lot of the gig economy websites trying to figure out the next bunch of revenue that they’re trying to bring in.

Versus, I think, there are some smarter, craftier people that maybe would show up at Pen Brothers and say, “Hey, you know what? Here’s my skill set, and I’m looking for some long-term employment. I’m sick of not having the consistency of income with a North American brand or a European brand that requires this sort of help.”

Nicolas Bivero:

No, absolutely.

We see that in our numbers.

We see companies that come to us because they built a team, they were very happy with the team, but then they realized that the team or some key members of the team were just looking for the next better gig and got a better offer somewhere here and a better offer somewhere there.

There was limited loyalty, so to speak.

There are different reasons to rethink this.

But again, I don’t want to badmouth the gig economy because I think the gig economy has a lot of benefits.

Specifically, when you’re still young, you’re still small, you’re trying things out, and you don’t need a full-time person, then it makes total sense to do it through Fiverr or Upwork or all the other gig economy platforms that are out there.

I think they are valuable.

Nicolas Bivero:

But let’s turn it around.

You suddenly have this great person, somebody who becomes essential to your organization.

Do you really want to have that person on the platform, on a gig economy kind of setup that you have zero control over?

No, I wouldn’t, to be very honest.

But again, everybody has different risk appetites.

Steve Hutt:

Yeah, exactly.

I have one final question before we kind of wrap up. It’s probably a big question.

The ongoing narrative this year has been, is AI going to replace a lot of jobs?

I’m curious, kind of like you being on the front lines with brands looking for talent, what’s the ongoing narrative right now about AI and the quote-unquote replacement of humans or improving the efficiencies of humans?

I’m curious about what you’re hearing and seeing on the ground.

Nicolas Bivero:

Yeah, it’s a difficult question.

I think nobody has a perfect answer and can read the future.

What we’re seeing in our own 130, 140 clients is a mix.

We’re seeing some roles being hired a little bit less because you can automate more things. You can use AI to be more efficient.

Then we’re seeing other roles popping up and becoming more important, specifically if they’re AI-related or they need people to basically train AI or build an AI.

So, these are the new roles that are coming in.

Overall, what we’re seeing is that our clients are training their existing employees to become more AI-savvy and AI users.

And new employees that they’re recruiting, usually they’re looking now for people who already know how to use the AI tools within whatever tool they’re using, be it Gemini, Microsoft, ChatGPT, Claude, or whatnot.

Nicolas Bivero:

So, obviously, when you look at, let’s say you want to hire an executive assistant or a virtual assistant as a very simple example, and you have five candidates, most of our clients nowadays will take the candidate who knows how to use Claude and Gemini or whatever other AI tool there is because that adds more value to that role.

So, that’s the thing that we’re seeing.

We’re not seeing much retrenchment at the moment, but that’s also because we don’t really—we’re not a call center. We don’t do very simple process tasks that can easily, or more easily, be replaced by a tool.

We do more mid- to higher-level white-collar work where you still need people to discern what the AI is telling you, whether that’s actually correct, whether that makes sense, whether that’s useful, and then fix it.

That discernment doesn’t happen without experience.

That’s going to be the bigger challenge, in my opinion. If you don’t train young people anymore, 10, 15, or 20 years from now, who’s going to then do the discernment?

Because if you don’t have the experience, you can’t really assess it.

But anyway, that’s a different challenge.

Steve Hutt:

Yeah, you know what it is?

I think the main term that I kind of coined is “human in the loop.”

I think there’s a lot of opportunity for supervisors at that level and kind of understanding the AI operations because there are still humans required to make sure these systems are actually running correctly.

Nicolas Bivero:

Correct.

Steve Hutt:

There’s a lot of different platforms that are coming up now that people are using, that brands are using, and all of a sudden, there needs to be some training around using those systems.

So, it’s not actually replacing humans. I think it’s just allowing better judgment to happen now.

Using these systems allows them to be more efficient, more on-brand.

And I think, at the end of the day, it’s a blue ocean of opportunity.

I think that’s another good topic when you think about it.

Even those who are listening and looking for work, it’s just about being open to knowing that fundamentally the world is changing around commerce in general.

Knowing that, it’s just like, what are these different systems that brands need? And am I open to learning them?

Steve Hutt:

Learning and being trained on these systems, and coming up with— you still have to run them and you still have to vet them.

It’s so interesting. Even in my own business, I have a media company, and I have content production and trying to get things like podcast editing and all these different things done.

Yes, AI systems are helping me, but there’s still that judgment call of a human, right?

At the end of the day, humans buy from humans.

Nicolas Bivero:

Absolutely.

And then the other thing you will see, and you can see that already, at least in some countries, you can see some—I think it’s like airlines.

Let me put it this way.

You will always have the budget airlines, the mid-level airlines, and then the more premium airlines because people will also segment themselves and choose.

Some people will not want to speak to or not buy from a company that uses only AI to do customer support.

They will choose another company that sells most likely a very similar thing but has a human to interact with.

Then that company will just charge more.

So, there will be another way of segmentation that will also happen through that, at least in my opinion. I would assume that’s what’s going to happen.

Steve Hutt:

Yeah, absolutely.

Who do you think the ideal customer is?

I think from Pen Brothers’ perspective, because there are many thousands listening to this episode right now, they’re like, “Okay, wait a second. I have a team.”

What do you believe the next steps are?

I want to make sure that the right people listening today think, “Yeah, I see a gap or I see a growth opportunity.”

And it’s not just about lower-priced labor. It’s about qualified talent and having a process.

Who do you believe your—I’m going to call it ICP, your ideal customer profile—are?

Who are these brands that you believe are most successful on your platform, and what do you believe some of the next steps might be for them?

Nicolas Bivero:

Yeah, I mean, at the end of the day, if you happen to have an open position and it’s staying open for longer than what you want and hope for, that means you’re struggling to find the right talent for whatever reasons that might be.

I think at that moment, working with somebody like us could be quite interesting as a way to explore whether you can find that talent you’re looking for in a more remote setting.

That is what I would always look at.

I think our most successful customers are customers that already have a certain scale, a certain size, and certain processes.

As I mentioned earlier in the podcast, it is easier to work initially with more process-oriented roles where you can define what success looks like and how to onboard the people and set them up for success.

So, if you are a company that’s already a little bit more mature, and you happen to have those roles and openings and you’re looking for ways to fill those spots, it doesn’t even have to be cost-saving.

It’s actually just like, “Hey, I have openings and I need to fill those spots. Otherwise, it’s going to impact me.”

Nicolas Bivero:

Those are usually companies that can successfully build remote teams.

If, on top of that, you have other challenges—for example, you need to build a night-shift team or a team that can work on weekends, or you need to scale the team, so it’s not just a couple of jobs but you actually have many jobs that you now need to fill—then again, partnering with companies like us can really help you achieve those results much faster than you would otherwise be able to.

Steve Hutt:

Yeah, it’s amazing.

I guess step number one would be to go to pennbrothers.com. That’s a good starting point.

You have a lot of resources where you can learn about your methodologies and process, and then there’s a pretty simple “Talk to Us” button.

I guess you kind of book an appointment to chat with the team.

Nicolas Bivero:

Correct.

You book a discovery call, and then basically it’s really to find out, okay, what are you looking for? What are your pain points? What are you trying to solve?

Then we will come in at the same time and explain not just what we do, but also try to discern, okay, if that’s your pain point, these are the ways we can help you with that.

If that’s something that’s really interesting, then usually from there we go and do the next step, which would be a calibration call with a recruitment team.

You can have a job description, but a job description doesn’t give you all the nuances of what you’re really looking for.

Then the calibration call is to really understand from our end: What are your must-haves? What are your nice-to-haves? What other skills would you ideally want to see in a candidate?

What are the working hours? Is this person going to report to somebody, or is this person actually going to have direct reports, so they need management skills?

All those nuances ideally come from a very early stage so we can provide you with the right talent, with the right shortlist of talent, from the very early stage and make it as quickly successful as possible.

We call it actually the proof of value.

We need to prove to you that we can find you the right people in the Philippines because the Philippines has the right talent.

Steve Hutt:

Yeah, it’s amazing.

And just as more of a side note, I just love the fact that you have transparent pricing.

I’m going to be transparent on the show. It’s a very small amount. It’s like $500 a month per employee as a management fee.

And I think you have whatever the negotiated monthly salary is that goes to that particular employee, maybe health insurance and other benefits and things like that.

Then having a small management fee going to your organization creates that source of truth and has a proper process to make sure that these employees are being taken care of and paid.

I think that’s lovely because I think that’s always in the back of people’s minds: How much is this going to cost me?

At the end of the day, there are a lot of variables.

Steve Hutt:

But this is one variable that’s taken care of.

Understanding your pain points, going through that vetting process, and then doing the hire again.

For a small amount of money per employee per month, it’s an easy, scalable process.

Nicolas Bivero:

Absolutely.

As I said, the proof of value is not only—it’s actually to mitigate that concern about how much is it going to cost me.

What companies need to look at is not just the management fees, but the all-in cost. How much is this talent, this person, going to cost me all in per month, per year?

That’s where proof of value comes in.

It’s really like, okay, tell me who you need, and then we will tell you what the talent pool looks like.

Then we will go deeper.

And all of that, we do it for free because we want to show you that, with 90% more likelihood, we will find you the right person in the Philippines.

Of course, there are roles that are very hard to find or that are nonexistent.

I would assume that if you’re looking for nuclear scientists, that would be tough.

Nicolas Bivero:

But anything else, I guess we can find, you know.

Steve Hutt:

All right, so that’s it for today.

Once again, thank you, Nico, for getting on the show today.

Everything will be in the show notes. We’ll have links to everything.

This is, you know, I’m on like a Joey’s joke on the show, but literally page two of notes. You can’t see it, but I just feel blessed to have the opportunity to learn more because I think this is a very powerful way, a growth engine, so to speak, for a business.

If you have an open position, it’s worth a conversation to see what’s available through Pen Brothers.

Steve Hutt:

So, once again, thanks for recording today.

Nicolas Bivero:

Yeah, thank you very much for having me, and hope you have a great, great holiday.

Steve Hutt:

All right. Thank you so much. All right. Have a great day. Thank you.

Nicolas Bivero:

Bye-bye.

Steve Hutt:

Well, that’s it for today’s episode.

I’d like to thank you personally for being a loyal listener of eCommerce Fastlane.

I hope that this podcast is offering you a ton of value through growth strategies, tactics, and exclusive insider tips on the best Shopify apps and marketing platforms, all with my personal goal to help you build, manage, grow, and scale a successful and thriving company powered by Shopify.

Thanks for investing some time today and listening to the show.

I’m so proud and excited that you have a growth mindset and are a constant learner.

I truly appreciate you and your entrepreneurial journey.

Enjoy the rest of the week and keep thriving with Shopify.