When Hiring Employees in Poorer Countries, Difficult Moral Questions Arise

July 22, 2014

Earlier this year, I wrote about the issues I’d encountered while building an outsourced office in another country. We’ve now expanded to a team of 14 in Manila, and we recruited everyone there using processes similar to those we use at home. I’ve worked out of the office there and have come to know each employee. We hold regular team lunches at our Manila office, and the whole company meets once a week by video conference. As a result, I had the impression that we were building a strong company culture across both offices.

Carlo Parungao, for example, is a big friendly guy in his early 20s who is a member of our Manila team. He researches and enters the details of all the new shops that users feed into Posse, and at our video meeting each Monday, he reports on the previous week’s achievements with a massive smile: “Hello Miss Rebekah. This week I researched 680 new stores, 40 more than last week.”

This last Monday, however, Carlo wasn’t at the meeting. Our office manager in Manila, Jenny Muncal, told us that he was on bereavement leave for a week because his brother, who had been suffering from leukemia, had died.

I know something about leukemia: Two years ago, a member of our team in Sydney had been stricken with it. He had spent four months in the hospital and a few more in and out of chemotherapy. One year after his diagnosis he’d made a full recovery, and he took a year off to travel the world. We all followed his adventures on Facebook. I researched the condition at the time and learned that some kinds of leukemia have a survival rate of better than 70 percent.

Carlo’s brother died because his family couldn’t afford treatment.

When Jenny told me the news, I was angry. If one of our colleagues in our Sydney office or our New York office had a brother with leukemia, we would have rallied and supported the person in any way we could. I had been striving to build a company culture where that closeness would extend across both teams. And yet we hadn’t even known what Carlo was enduring.

I wished we could have helped in some way, and I thought about what I might have done. Could we have raised money on his behalf? I felt I’d failed as a leader and as a person. Our company culture should have supported Carlo when he needed us.

This led to bigger questions. Most of us don’t accept that one of our fellow citizens should die because of their inability to pay when a life-saving treatment is available. We feel a responsibility to our family first, then our friends and the wider community.

But when we build teams in countries with economic circumstances and standards of living different from our own, what is our responsibility to those employees and their families? What is our responsibility to the communities they live in?

As entrepreneurs, we face some difficult questions. What is a fair amount to pay someone who lives in a much poorer country? What standard of living do we want for our teams and their families and communities? How far does our care extend? Then we have to balance this with our obligations to our shareholders to keep costs down and productivity up, a serious issue for start-ups like ours with limited cash and time.

I don’t have the answers, but I think these are important questions. By building a second team in Manila, we’ve succeeded in employing more people and moving much faster than we would have had we done everything in Sydney and New York. I think we’ve done a good job of creating a strong company culture there; their work is exceptional, and the team members certainly seem passionate about their jobs at Posse. But I’m sure we can do more.

We’re probably among the first generation of entrepreneurs to face these questions. Sure, outsourcing has existed for a while, but at big companies, the person in charge is likely to be disconnected from the lives of individual employees. By contrast, I know each of our Manila team members – I hired them and I speak to them every week.

It’s still novel for early-stage companies like ours to operate with a second team in a lower-cost country. The approach brings opportunities for entrepreneurs and investors who can develop businesses faster and at lower costs, and for an overseas work force that can learn the process of building and introducing global products. It’s a growing trend, and it means we are training an army of entrepreneurs in these countries, some of whom are already competing with us on the global stage. Today’s cost savings may lead to a worldwide equalizing of opportunity.

Building and leading a team in a less prosperous country has taught me volumes. I’ve been fortunate to meet ambitious young people like Carlo, and in the future I plan to do a better job of developing closer ties across multiple countries.

Originally published in The New York Times

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