We have recently started a video series - #BKOT Build A Kickass Offshore Team. This series is focused upon describing how offshore team is transforming the landscape of accounting practice. Here's the first episode where Mike Goossen, CPA and Shawn Parikh, CEO Entigrity will discuss and explain - Is Offshore Staffing For You?
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MIKE: Well Hello, this is Mike Goosen, CPA. I'm Vice President of Entigrity Offshore Remote Staffing and I'm chatting today with Shawn Parikh, who is also the President of Entigrity Remote Staffing. And we're starting our first in a series of podcasts titled Build a Kickass Offshore Team. I'm pretty excited to have you today. We want to talk a little about - is offshore staffing for you? And what's happening? How dimensions changed. What happened is you now have people working for your company sitting in different parts of the world. And this was just started with I.T. and then got into different sectors banking and finance insurance and many more sectors. And India had led somewhere in this service driven sectors purely because of all of the big British influence that India has. India used to be a British colony for about… (Interrupted by Mike)
MIKE: Yeah and as a result of that the school system, the education process is very similar, I understand due to the British approach years ago and continues today, right? I mean as far as English speaking and that sort of thing.
SHAWN: And apart from that India is the second largest English speaking country in the world after the United States. did we get to this point? And so a lot of history today and maybe a little bit of solution. So Shawn, can you give me some insight as to what is going on in the industry that has kind of reached to this point.
SHAWN:Sure Mike. First of all as MIKE introduced me I'm the president and the CEO of the company and we have been working together since last couple of years. It has been great working with Mike. Although I'm out of New York and Mike is in Fresno California. We started this series called Build a Kickass Offshore Team. And we thought of this idea, that we will create a few episodes of video podcasts and come up with some kind of insight on some of the questions that our clients ask us. Some of the problems that accounting firm typically faces and how offshore staffing can be a great solution to solve those problems. So coming back Mike, to your question how this idea kind of started. We need to go little back into the history that how really offshore staffing emerged. So starting with I.T. (Information Technology). Two-three decades back, developing countries like India started building their I.T. talent pool. And some of the big giants started getting into this industry and they started working with some of the multinational companies based in America and the developed parts of the world and that's where Indian I.T. sector started booming and the whole new era started of globalization, wherein previously Globalization meant goods going from one place to another place, which means a multinational company selling goods from one country to another country. With the emergence of information technology the
MIKE:It is amazing to me. Yeah, I realize I didn't even know that until I met you a few years back and then we think about that till today English is still the business language across the world regardless, correct?
MIKE: I have some relatives that work in France, it’s a French company and I asked him how is his French doing? And he says I don’t even speak French. He's been working for them for 15 years He doesn’t even speak the language of the company.
MIKE: But he is the controller of the company. So English is a worldwide business language which is good.
SHAWN: And what really started this, was a big transformation. Accountants, you can always say are late in adaption to technology. So accounting industry started a little bit late. You know that, the first one to enter were the Big 4s and they kind of came in, started their offshore offices in India first, they acquired smaller firms to acquire the local talent pool. They sent some managers to India so that they could set up multiple offices. And what happened was, even larger firms, top 200 firms followed the footsteps of big four and built their offshore offices. And that's where the real trigger point was for companies like us.
MIKE: Sure. That makes perfect sense because they're the Big 4s, the Big 4s are impacting the talent pool, educating them, employing them, making and starting to build a feeder system into accounting professionals out of India.
SHAWN:Yes. And what we found out was while Big 4 and larger firms are doing this why can't a smaller firm or mid-sized or regional original accounting firms do?
MIKE: Yeah why not. I mean sure! Well I mean they couldn't themselves do it, but companies like Entigrity can help them do it.
SHAWN:Yeah and I mean that's when this question came up why only Big 4 and larger firms are doing it. And that's when we realized that the scale is a challenge. Hiring five or 10 employees and for that you go from America to India, doesn't make sense in terms of economics, the hassles that you have to go through. And you know the compliance is. And then there are hundreds of local challenges also. It's not that you just go there, and when you run a smaller operations it's always difficult to attract talent, globally.
SHAWN: We work with 500 plus accounting firms. We have about six offices in India one in Mumbai, one in city called Baroda and in Ahmedabad we have six offices. So when you have bigger operations, the people joining, you feel much secure much safer. It's like in America we join bigger companies. So that's how it was that if we can set up a bridge where small firms and mid-sized firms can build their talent pool and that's where we came up with offshore staffing idea and started catering to smaller firms. So that was our little story. One anecdote I would like to definitely share about this is, being a small business entrepreneur, I always want that small businesses or smaller accounting firms for that matter should always be… there has to be an ecosystem where they can really grow, they can really compete with larger firms, compete with bigger firms. You’d have heard KPMG SPARC. KPMG has launched this division and they are now getting into accounting and bookkeeping.
MIKE:OK, that's different. That’s new!
SHAWN:Yes, they are directly competing with the small business sizes
MIKE:Small-medium firms, absolutely, it's a direct attack if you’re in that particular historic setting and I was thinking that what you were saying about the smaller midsize firms you know what I've been talking with CPA firms over the last several years that's exactly what's going on there. There's some drivers that they are struggling with. One is getting enough people to get the job done, especially the back office work, being able to keep their overhead and their office costs under control and being able to compete with the larger firms. I mean just recently here in my small little town of Fresno, one of the most well-known largest independent locally owned CPA firms surprised everyone with an announcement six months ago that they were now becoming a part of I guess it's called, a large/medium sized firm that is basically buying up small firms across California for this exact issue. They cannot compete with them on the same level as they can, with larger firms. As larger firms have this as advantage over them so the small firms are having to make a choice of do I compete or do I join.
SHAWN: Yeah. And what happens if larger players are getting larger and they eat the smaller players and that's happening in the accounting world also. And when this happens… essentially what happens is at the end of the day efficiency and uniformity in the business means lesser number of people. And the industry size as a whole may increase in terms of the Dollar number but the actual number of people working in the industry reduces, so, that would never be a good situation to be from a country standpoint for, an economy standpoint. And another example if I recall Intuit starting their own accounting bookkeeping and tax preparation business, and you know I'm not really happy with that move at all to be honest, because we work with so many small accountants and today I in my personal opinion Intuit QuickBooks today is what it is because of small businesses and accountants, right?
MIKE: Exactly. So I guess the choice has to be made, so it's kind of issue type and that we're talking about mergers happening which reduces the number of required employees per se. Yet on the other hand I'm talking to our firms who can't find a good CPA and mid-level accountants to fill in the work they need. So it's kind of an odd happening. They're going both ways or so. So we're struggling there and I think that we're talking about with the off shore staffing model as an option. It's a very viable opportunity for these small to even sole practitioners to grow their firm with great flexibility. Which you would agree I mean the off store relationships with our company can generate opportunity that they can't find in another way.
SHAWN: Well I agree. Of course we are in business and I'm going to say yes to that but…
MIKE:That's what we do. We're here to help right? So, it’s good.
SHAWN:But more importantly you definitely have some traditional advantages through this which means you save money, you hire a person at lower cost, no payroll taxes no compliance as you know and there are no overheads involved. You reduce your costs significantly and there are less number of hassles you go through.
MIKE: I was going to say that the whole idea of quality of life of a CPA, the culture I'm seeing amongst CPA, is that the younger generations coming in and the old guard like me (I've been in 30 years going out) When I started in the business, you know working long hours putting the personal life aside for the firm was necessary to advance. Now it’s our younger set the new generation of employees across the board, but not just all industries but accounting specifically are looking for a different lifestyle coming into a firm. They're not driven that same way they're looking for flexibility. They're looking for… (interrupted)
SHAWN:We call them the millennials.
MIKE: Well, yeah! I don't like to categorize people, will just say people between 25 and 40 are trying. They're just looking at life differently and that's a good thing. And so by looking at other options of how to get the job done it's important for a CPA firm and owners to look at a different way so that quality of life is a portion.
MIKE: So anyway that's what struck me what you were saying about you know what small firms can do.
SHAWN: Yeah. And apart from that I mean essentially it helps in building capacity. Reducing your workload. That's what you just mentioned about balancing work and life. I mean balancing well personal life and professional life and third and the most important thing it gives you a great competitive edge, which people are forgetting that today if you want to take more work you need to think back that do I have the manpower to have the labor to support and you are really in the dilemma sometimes that if I take this work and I have to hire a new employee would I be able to completely utilize that employee. What if this work goes away and this employee remains idle. So this is a dilemma which kinds of always troubles small accountants that we work with. And you know the flexibility that offshore staffing brings in terms of hiring and working, you can hire part time, you can hire temporary permanent. You can have somebody full time exclusive and then we also have the most flexible option called on demand staffing. So, this kind of takes away most of the most of these challenges of small accounting firms. Lastly what I would mention is a couple of things. You know people always have this question why India although we covered a little bit that it has a British influence. And the schooling in India has British influence so the quality of education is very high. And we also talked about English speaking culture in India, which are some of the important factors but one of the most important factor today is, of these last 20 years the big four and larger firms came in, then there are some of the Fortune 500 companies, not some maybe most of them have their own back office. So this has created the whole ecosystem in India, where there are million plus accounting, tax and finance professionals in India that have an understanding or experience of US accounting tax finance industry
MIKE: Hmm, sure!
SHAWN:Which is a great ecosystem where smaller firms can participate, mid-sized regional firms can build their own team. And you know we started this and we built our clientele over time. We started working with small firms. Today when we are working with 500 plus accounting firms we have a couple of dozen of clients which are you know mid-sized and regional accounting firms. And they started with one or two full time offshore staff and gradually built their own team. So we have a client in St. Jose who has 15 people team and we have given them a dedicated client suite, what we call as dedicated client suite just like that exclusive office in our office.
MIKE:So they have a little team room. Yeah.
SHAWN:It's like their team room, yeah. They have their own video screen where they can do the direct conference call.
SHAWN: So it's like their office within the infrastructure of Entigrity. So yeah that's a little bit off. Although in the next episode, Mike, we should cover more on, or we should highlight more on why offshore staffing, or the benefits of offshore staffing on the side of the three tiers of recruitment, retention and replacement. Without a comparison why offshore staffing is today the best alternative to a local staffing challenge. So we'll cover that in the next episode of BKOT. So Mike, Over to you.
MIKE: Well, yes, that's good point where we kind of come to the end of our time together today which is perfect and so it looks like in our next session coming out, in our next episode if you will, we'll be more about some of the details going deeper into exactly how it works and what are the direct benefits are might be to the CPA firms who choose to join our firm and work with us in the future as well. So with that said we'll be doing these podcasts, they'll be available on our Web site. They'll be available in our YouTube channel. All those type of things and we'll put the information out where you can find us so that you can continue to watch and rewatch once you've listened to the podcast.
SHAWN: Yes and please give us your feedback. We are trying to make this podcast to roll out some insights on offshore staffing for accounting firms, for accounting industry. So please give us your feedback. We'll be putting on all social media handles and the specific transcript to the podcast will be available on our website. So yeah Mike thanks a lot. It was a nice interaction, short interaction, and hope to continue this initiative of BKOT.
MIKE: Yes I don’t know about everybody else, but I'm anxious to hear what's coming next and we'll get together. All right, well great day, bye.
Entigrity™ is a trusted offshore staffing partner to over 500+ accountants, CPAs and tax firms across the US and Canada. Our flexible and transparent hiring model gives helps firms of all sizes to hire staff for accounting, bookkeeping, tax preparation or any other task for 75% less cost. As a firm 'run by accountants, for the accountants', Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management, still you are left with least to worry about compliance, payroll taxes, overheads or any other benefits.