Ep. 355: How do you judge when to help an OFS financially

Welcome to the Secret Sauce of Outsourcing podcast that's dedicated to making you better at outsourcing to the Philippines. This is episode 355. How do you judge when to help an OFS financially? So this is something that comes up in our business quite a bit. We have about 40 people that work for us full time and we get requests to help financially. And those requests come in various different forms. Sometimes they come in a salary loan or a salary advance, so we're going to pay them their wages ahead of time. Sometimes it's asking for a loan where they need money in addition to their salary. Or sometimes families have problems and a worker needs money to help their family. Or sometimes it comes in the form of like, oh, there's a typhoon and we lost our house and everything we own. But don't worry, sir, I saved my laptop in this one. I want to talk about how do you judge when to help someone? So I got this email from Ben recently. Ben says, I got this message from an editor that I've been working with since January now. He's. He says, by the way, sir, can I ask for your help? Just $60. I just really don't have enough money to pay for my medical bill. Maybe a cash advance if it is okay. Ben says, I did pay him an extra hundred dollars to help him out. Did I do the right thing? It's been a good few months working together now and he's done really great for us so far. How do you judge when the right time is to help out with that sort of stuff? So this is a really great question from Ben and his keyword is judge. So you have to use your judgment to. In how you feel about this person and how much you trust them. But let me give you a couple of guidelines. So number one, if this happens right off the bat when someone is brand new, say no. Someone who is brand new asking for money for a loan for a new computer because the computer broke is likely a scam. Do not do it. Now, this really only applies in the first couple weeks. And really in the first week or so is when you're likely to encounter this. And actually you're not likely to encounter this. But if you encounter this, it's probably, probably going to be in the first week after that, they've put in too much effort. They're not looking to scam you. So second, if someone is newer, like they've worked for you for a couple months, then you need to use your judgment, like, do you trust this person? How good has their work been, how reliable have they been? How eager are they or do they appear to be to want to continue working for you? And how much is the amount that they're asking for? Are they asking for thousands of dollars? Well, you know, you better trust them a whole lot. If they're asking for thousands of dollars or they ask you for $60, which isn't that much money, and you could help them, and it would. It would build some trust from them and you and you and them. So in this case, the judgment call is, how long have they worked for you, how much do you trust them, and what's the amount they're asking for? So for me, if someone is new, like they've been with us less than a year, I'm less inclined to loan more money. That more money amount depends on what you are comfortable with with your business. If you're not comfortable loaning $200, well, then don't do it. But if you have someone who's worked for you for five years and they're asking you for 500 bucks, well, you know, if you have that money to loan, then it's probably pretty acceptable. They're unlikely to run away with the money. Especially if they feel comfortable with you and they trust you and they feel like they have a good job, then, you know, like, you're pretty secure in loaning that money. Consider how much that money is worth, too. $100 to you is different than $100 to them. $100 to you may not be. May not be so much money, but for them it's. It's quite a bit. And that loan can actually buy you a good amount of loyalty and hard work, and it is not very difficult for you to do so. Now, number three, let's talk about salary advances. Very often we get asked for people who say, hey, we're just short this month because we had a big expense come in. Can I get. It's November 5th. Can I get my December salary right now? So the salary that I would normally get paid in December 1st. Can I get it right now? This is one that you have to be careful with because you don't want it to get out of hand. We've usually given this salary advance. In fact, we've probably done it dozens of times. And sometimes it has gotten to where they ask for it. This starts on April 5th. They're asking for May's salary, and then in May, they're asking for Junes, and in June, they're asking for Julys, and then August and September, and it has gone on for a lot of months. Now. Usually when this happens, we start asking questions about the third time. The third time you're asking for a salary advance, we're going to start asking like, where's this money going? What's going on? What's the cause? What's causing this problem that's put you behind? Can you show me some receipts of things that you've paid for for this? I just don't want to be funding a gambling addiction or something like that where we're actually creating more of a problem by loaning money than the by withholding it. Now, we've never had that problem. We've always advanced the money and at some point they catch up and they're fine. Or at some point we loan them money enough so that they can get over the whole hump and then they pay us back in lesser amounts. Rather than giving a full salary a month ahead, we'll loan them the thousand dollars and then pay that back in hundred dollar increments. So now they're still getting their normal salary every month and they're just taking $100 out of it every month. So I know some of this could have seemed intrusive, like, well, where are you spending your money? And yep, that's true, except you're the one loaning the money. And so it's acceptable for you to ask difficult questions and you might just find out that they have squandered their money or you might find out they're actually kind of not making enough. That was the case one time with, with one of our people. Him and husband and wife worked for us and they had three or four kids in school and they, they're paying tuition for these kids and they just couldn't make it work. And we realized, yeah, these guys just need some more help so their kids can get a good education. Which, yeah, we're willing to do that. We're willing to help you out here. Okay, so the last thing that I want to talk about is when someone asks for a large amount of money. Now we've had people ask for $1,000. We've had people ask for two or $3,000. Recently we had someone ask for $25,000. And this was them coming to us as the bank because they could get a loan from the bank or they can get a loan from us. They're buying real property with it. They're buying a lot with it. With that one, we had to look and say, wow, I mean this, this is quite a bit. And we're Not a bank, but you've also worked for us for a really long, long time. And so in all of these situations, and this comes to the same things I've talked about before, where how much do I trust this person? How long have you worked for us? How valuable are you to our company? And really, in the end, a lot of it comes to how much do I love this person who is working for me and helping me build a business. That is amazing. And yep, we're helping take care of them in their life, too. So we've loaned $1,000, we've loaned two or $3,000. We've loaned now $25,000. And they will pay it back. Their plan was to pay it back over 13 years, which we hope to not have it take 13 years to pay back. And we will use bonuses and their wages to help pay that back. In all of these situations, we deduct a monthly amount from their salary and we've never once had a problem with. Now, how much is that monthly amount? That depends on how much that person makes and how much we think they can deduct. It also depends on what they say about it. Sometimes they'll say they want to deduct more than I think is reasonable. And from their wages, I don't know how they can survive deducting that amount from what they're getting paid. And so often we'll make it go longer than that, but that amount has never been a problem. They want their job, they want to keep the job. And so they're going to get an amount deducted every month from that wage until it's paid back. And we've had some things take aside from the really, really big one I keep talking about, we've had things take a couple years to pay back. And those people are, they were amazing then, they're still amazing now, and their loans are paid back. And it's been really great for us and for them. Now in a lot of these situations, like I mentioned before, I will review finances with people I'll go through. You know, what are your monthly expenses? Do you rent? Do you own? Where are you spending your money? How much money do you spend eating out every month? I want to know these things depending on the loan that I'm going to give. And yes, it's intrusive, but again, you're acting as the bank. And there is no credit score in the Philippines, at least not one that I'm aware of. There's nothing to say, oh, yeah, this person's reliable, that they're going to pay it back other than they have a job. And you know they have a job because you're paying them that job. And they're unlikely to disappear because of a loan. So now, one last word about this. Only reason this is even a topic is because we don't hire freelancer. We don't hire people that aren't part of our team. We hire team members. We hire people that are part of our company. They work for us. They give us everything they have, and we hope to take care of them. People like Ben, who asked this question, are doing the same thing, hiring people to be on his team rather than hiring freelancers. So if you want to hire a freelancer, go to upwork, that's fine. But if you want someone to be part of your team to stick with you long term, to help you build your company with you, go to onlinejobs, physical.