John Jonas (Secret Sauce of Outsourcing podcast, Ep. 330) discusses how to decide raises for online Filipino specialists (OFS). Key factors: what you can afford, any prior agreement about raises, the worker's performance, and local/global inflation. Examples given: $1 on $8 = 12.5% (considered generous), common raise range ~5–10%, 3% raises to match inflation, and occasional large increases for exceptional staff. Raises are typically made in January and bonuses are also used. The episode emphasizes tailoring raises to your business, means, and the employee's contributions.
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Welcome to the Secret Sauce of Outsourcing podcast that's dedicated to making you better at working with OFS online Filipino specialists. This is episode 330. How much of a raise should you give your OFS? So raises are a common question that I get from people and there is no standard answer. I recently got an email from Rachel who said, how much of a raise is expected? I started her at $8 an hour, and that seemed to be the upper end for the bookkeeping secretarial work she does for us. Is a raise of $1 nice enough or too little? So let me give you a couple thoughts on giving a raise. Number one, what can you afford? Can you afford to give a dollar an hour? Second, what is the agreement that you made with that ofs? Did you make any agreement? Was there any sort of thing about how much raises would be, how much of a raise you would give? Third, how was their performance? How has their performance been? Are they amazing? Are they super mediocre? Are they not doing you well? I would consider all three of these things. Then here's something else that I would consider. Here's two more things. Number one, this raise is permanent, right? Which is good. But if you raise them too quickly, you run out of room to give raises, at least given a specific position. If you raise too quickly, you run out of room to give raises. In the long term, you set an expectation that a raise is going to be really big. And. And if you set an expectation that you're going to give big raises, well, after five years now this person's making $13 an hour, which may be really great. And that's so great for that person in the Philippines, assuming your business can handle that. The last thing is. So if you divide your raise amount by the amount you're paying them, so divide one by eight, that's a 12 and a half percent raise. I asked my team what they thought about this and they thought that was really, really generous. So it's pretty reasonable to find out. How much of a percentage raise are you giving to them? What's a normal raise? I don't know, 5 to 10%. I've doubled people's salary on occasions because they were so amazing and I felt like they weren't getting paid enough. I've done 3% raises just to keep up with inflation. Now this year, inflation has been really, really significant and especially in the Philippines. So it's been really significant in the US it's been really significant in the Philippines. Inflation hurts everybody, but it's been bad. There so if you can consider bigger raise this year, if you can. A couple more thoughts on this. We have typically done raises in January. My business partner and I list all of our people that work for us and we go through the list, we go through the list and we evaluate how well did you do this year? And there will be some people that I, that I will say, wow, this person is amazing. They were amazing last year. They're amazing this year. They just do amazing work. We're giving them a bigger raise. Others just continue to plot along and they don't really stand out and they still get a raise. And we try and be generous with our raise, but it may not be spectacular. Now, I'm not going to give any numbers here because I'm willing to bet that people on my team listen to this and I don't want people to know. Although if you're listening to this, you've probably had typically bigger raises than other people is my guess. We also do bonuses. But what you do for your OFS will depend on you. Your personality, your business, your means financially, your plans for the future. Consider all of these things as you go to give a raise. Now, your OFS is going to appreciate any raise that you give them. They would love to make more money, just like you would love to make money. So any raise you can give is going to be super well received.
