Dynamic Export

Eighth in our series on the True Cost of Exporting is the cost of human resources, whether hiring someone for your export business in Australia or overseas. Exporters are among Australia’s best employers but there’s a lot of research and cost considerations that go into making it that way.

According to a study conducted by Tim Harcourt, Austrade’s chief economist, exporters are among the best bosses in Australia providing better wages and working conditions for their employees both here and overseas.

“Exporters, on average, improve the quality of employment in Australia as they are innovative, invest in technology and education and training, and achieve higher levels of productivity and profitability, relative to domestic businesses,” he reports.

Exporters clearly know the value of good people, but do they know the real cost?

You’ll already be familiar with the costs of hiring in Australia, including tax, holidays, sick leave and superannuation, but an extra consideration for exporters may include having staff with certain skills, such as another language or an export procedures qualification, which may require a higher salary.

The other consideration is whether to outsource, which may be cheaper and more efficient than doing it yourself. Outsourcing services like freight forwarding or translation could be a better value proposition than hiring staff, especially for smaller exporters.

Sending staff overseas

The decision to send staff overseas for more than just a business trip is one you shouldn’t make lightly.

“There’s an obvious attraction of using someone who understands the business, that is involved in driving the growth of the business domestically in Australia and certainly there’s a vital role in them building the [overseas] presence,” says Amit Aggarwal, Austrade’s business development director for the United Kingdom.

“But there’s also benefit from using local staff, their local knowledge, contacts and awareness of the market so in an ideal world you would combine that local knowledge with your Australian experience.”

If relocating personnel from Australia, consider if you need to obtain work visas or permits—you also may need to factor in lead times to apply for these. Also weigh up any tax implications and costs such as a living away allowance and/or a relocation bonus for the chosen staff member.

You will also need to figure out how your business in Australia will fare without one of your star employees. Additionally, you should spend some money on securing your investment with a contract that should include a non-compete clause so that your ambassador doesn’t get spirited away by a competitor, or decide to set up their own competing business while overseas.

Enticing staff to take overseas positions also entails its own set of parameters. Marcus Sandmann, head of Marketing and Customer Management, Asia-Pacific, for recruitment agency Michael Page International says you need to understand each destination’s cost of living, tax rates and exchange rates.

“People need all of this information to determine how attractive the offer is in comparative terms. In some countries such as Hong Kong and Singapore, salary levels might be the same but low levels of personal tax makes working in these areas far more lucrative,” he says.

This will also help you determine the most cost effective locations to send staff to, especially if you were weighing up a couple of different markets.

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