How the founder of Bartercard is changing the outlook for outsourcing

ANDREW FEDEROWSKY, THE CO-FOUNDER OF THE WORLD’S LARGEST TRADE EXCHANGE BUSINESS BARTERCARD HAS HIS SIGHTS SET ON TRANSFORMING A DIFFERENT INDUSTRY – OUTSOURCING. HOWEVER, AS HE TELLS JONATHAN JACKSON, IN MANY WAYS THESE INDUSTRIES ARE COMPLEMENTARY.

We’ve all heard of Bartercard. It’s the global phenomenon that launched in 1991 and became the world’s largest trade exchange where small and medium-sized businesses barter-trade over $600 million each year in nine countries.

Bartercard members trade across a dynamic mix of industries and are serviced by 75 offices and 600 staff. That’s a significant business and one that co-founder Andrew Federowsky can be proud of.

Founded on the Gold Coast by Federowsky, Brian Hall, Andrew and Wayne Sharpe, with a vision to become the world’s leading trade exchange and business-to-business brand, it took just two years for Bartercard to launch globally.

The same passion, enthusiasm and drive that made Bartercard a success is now motivating Federowsky to achieve similar triumph in his latest venture, Outsourced HR Solution.

Outsourced HRSolution is a newly formed outsourcing business that connects skilled professionals that live and work in the Philippines and who are looking for work with Australian and New Zealand businesses looking to expand their workforce and shift back-office functions offshore.

This is not some call centre type relationship either. Outsourced employees are considered to be members of staff and are treated accordingly, with all the perks and/or KPIs that entails.

How do you go from business-to-business commerce to outsourcing? Well, the leap isn’t so large.

“When we founded Bartercard in 1991, we were seeing trends develop around the development of sales channels and commerce that were somewhat different,” Federowsky says.

“Loyalty programs such as discount clubs and Flybuys had sprung up, so we ‘Australianised’ the concept and started Bartercard. The media picked up on it and labelled us the ‘knight in shining armour’ in business.”

Federowsky says that Bartercard became the largest business of its kind in the world over the next decade and a barometer for where business was at during various stages of the economic cycle.

There are two key points in the connection between Bartercard and Outsourced HR Solution. The first is the ability to see a trend, differentiate yourself in the market and then capitalise. The second is understanding business cycles and what companies need to help them survive.

“Having a network of tens of thousands of businesses you get to see what is going on and see business trends developing.”

Given the nature of the current economic cycle and the post GFC recovery, one significant trend is that businesses have been looking to cut costs by outsourcing functions such as marketing and social media.

One important point that Federowsky makes is that you can’t outsource people, just tasks.

“You need to look at a task and decide if this can be done elsewhere. If so, you can then make the decision as to how you can save on payroll, facilitate business growth and bring in new sales. Outsourcing allows you to do this.”

Outsourcing has become more and more relevant over time.

According to Statista, the global market size of outsourced services was US$76.9 billion in 2016. To put this growth in perspective, in 2014, the global market size of IT healthcare outsourcing alone was just under $US35 billion, and forecast to increase to $50.4 billion by 2018.

Given those figures, it is little wonder why Federowsky is following this trend and putting his own stamp on it, specifically setting up shop in the Clark district of the Philippines where local partners aren’t required and international businesses are protected by the government.

Clark is also just 10 minutes from the airport and surrounded by significant infrastructure. It meant that setting up in this region was smooth sailing.

There are further benefits to setting up in the Philippines, most notably the language – Filipinos have outstanding command of the English language.

“The English-speaking people led to a natural migration to the Philippines for those who were looking to outsource. It has become usual for a business that may employ two to three people in Australia to have two staff in the Philippines. This then allows the businesses to create more jobs at home by freeing up capital.”

That is a point worth thinking about. If you can hire someone offshore to do your digital marketing at a saving of between 45%-60% on what would be an $80,000 to $100,000 salary, then you can hire someone to ramp up manufacturing.

Outsourced HR Solution has only been open for three months, but already it is gaining similar traction Bartercard did in its initial stages. This is partly due to Federowsky’s Bartercard connections and understanding of the business landscape.

“I had clients at Bartercard who were looking to outsource but didn’t know where to turn to or who to trust. So there have been great synergies between the two businesses.

Also attributable to the quick success of his new company is the team he has around him, which has extensive experience in the Philippines.

By his side are Tony Godbehere and Tony’s wife, the Philippine born Alona. All three understand the landscape and are dedicated to helping local Australian businesses increase profitability, expand their business and lower expenses by providing cost efficient outsourcing services.

According to Tony’s biography, his mantra is to: provide quality professionals that live and work in the Philippines, so businesses can move their back-office functions offshore. Tony believes the key to success is simple; invest in the right people and create a positive work environment.

To reiterate the point one final time, Outsourced HR Solution is dedicated to delivering quality staff, not frustrating call centre operators. Outsourced employees are highly qualified and legitimate members of the team who contribute to the overall success of business operations.

“Each OHRS staff member is 100% dedicated to you and your business and because labour is cheaper in the Philippines, you can save between 40%-to-65% on salaries compared to what you would pay locally,” Federowsky says.

With the outsourcing market being so competitive, Federowsky says if companies are looking to cut costs and deliver cheap products they will quickly be out of business. However, if they reduce their costs through outsourcing, whilst using the money saved to create good quality products at better scale, then there is no limit to what they can achieve.

And speaking of no limits, one of Federowsky’s favourite quotes comes from the Austrian oak himself, Arnold Schwarzenegger: “ignore the naysayers”.

It is a mantra by which Federowsky has lived his entire life; one that has seen him through the successes and hard times with Bartercard and holds him in good stead for the future.

“We have been goal setters all along, going way back to Bartercard and we have taken the same philosophy with Outsourced HR Solution, even signing an option for a 3300sqm space to be executed next year.”

That reflects the confidence Federowsky has in this business and in his own capabilities to make it work. There is certainly no negative ambiance distracting him from his goals and he expects to grow quickly without sacrificing the quality of the service.

He has a simple formula for success, which he believes all businesses should follow, particularly those looking to upscale through outsourcing.

1. Have a go. A lot of people talk about what can’t be done, look at what can be done.
2. Be positive. Negative energy rubs off.
3. Go with the trends. If you don’t, you will get left behind. Look at what the telephone did to business, computers and Amazon. You can’t ignore the trends.

“I look at everything from all angles and I believe that if you decide to have a go, you need to leave no stone unturned. Thank god for outsourcing, because good outsourcing allows you to meet your ambitions.”

For more information visit www.outsourcedhrsolution.com.au.

Andrew Federowsky, Bartercard Co-Founder