The best countries for outsourcing offshore work

Just as the digital nomad scene has evolved over the years, outsourcing jobs to remote workers has also matured.

Dateline: Belgrade, Serbia

If you’re a nomadic entrepreneur, hiring is one of the most important decisions you can make. The people who work within your organization can make the difference between success and failure.

My friend Dan Andrews, founder of Tropical MBA, has been known to say that any company with a limited number of employees must ensure that they have only “A” players.

While a big insurance company can stock its cubicles with “A”, “B”, and “C” players, those of us running companies that are accountable and responsive can only afford to hire the best.

But it’s not just about hiring the best, it’s also about where you hire. In Italy, for example, people are obsessed with securing “un posto fisso” — a permanent job — that comes with substantial benefits, a liberal pension, and the guarantee of a job-for-life.

Government labor laws back up these aspirations, making it incredibly difficult for a company to let an employee go once they are hired, no matter how ill-fit they are for the job.

For anyone building an entrepreneurial team, these kinds of laws combined with a workforce with the wrong mindset can be a recipe for disaster. That is why it is so important to not only know what kind of talent you are looking for but also where to find that talent.

With years of experience under my belt hiring virtual assistants, outsourcing tasks to remote workers, and building distributed teams, I wanted to take a minute and share some of that experience with you. In this post, we’ll cover the following:

  • The Evolving World of Overseas Hiring
  • The Qualifications for a Good Hiring Location
  • My Top Five Countries for Hiring Foreign Workers

The Evolving World of Overseas Hiring

The nature of hiring overseas has evolved over the years. In reality, the entire nomad panorama is evolving. I have long told people — from Forbes to others — that nomadism, in general, would eventually become more than a lifestyle focused on being cheap.

The accessibility and opportunities of global living would soon attract people beyond those simply looking to travel, have a good time, and live on a shoestring.

To a large degree, this has occurred as the digital nomad scene has evolved to take on more of the characteristics of the Nomad Capitalist scene — one where different niches of people turn to international solutions and lifestyles to better run real businesses and enjoy more abundant living.

Nomad Capitalists are not asking how they can live on $20,000 a year in Bangkok, Chiang Mai or Bali. Instead, they are asking where they can live to enjoy a higher quality of life while also creating other benefits, be they lower taxes, better dating opportunities, greater financial security, etc.

And, as the digital nomad scene has matured and evolved, so too has the nature of hiring offshore.

Just as people are not going offshore simply to reduce their cost of living but instead to get the best of both worlds, the space for hiring foreign workers has begun to gravitate toward a desire for overall quality versus a drive to cut costs wherever possible, including for labor.

Even just 15 years ago, if you called customer service in the United States, you would often be routed to a call center in India. Businesses were all about cutting costs, and the fact that customers had to deal with frustrating communication barriers because of that was not a big concern for these companies.

However, quality eventually won out and, today, everyone from FinTech companies to guys selling mattresses on e-commerce will route you to a call center in the US. You can literally call these places and they’ll answer with, “Hi, I’m Susan in Columbus, Ohio. How can I help you?”

People got tired of companies beating down costs at the expense of quality… and businesses responded accordingly.

That doesn’t mean that some people aren’t still trying to go the route of cutting labor expenses. One of the most quintessential books from the era of cheap offshore labor, The Four Hour Work Week, is still an incredibly popular book today.

In his book, Tim Ferriss discussed many of the freelance websites of the time like Odesk and Elance (now Upwork) that served as platforms where you could find extremely cheap labor from folks living in places like the Philippines, India, Bangladesh, and similar countries.

And, at the time, even I found these services useful for growing my businesses.

My highest ROI business in the United States was a swimming pool cleaning company. Part of the reason I got into the business was that I could see that there were a lot of tools — like freelancers in the Philippines — that could help make the business easier to run.

While the rest of the swimming pool cleaning companies were terrible at marketing and operations, I was able to compete against them with better systems that did not cost me that much more.

For instance, I could not buy a list of names of people in the area with swimming pools that I could easily contact. Instead, I had to create my own data and I literally hired guys to do it. I kept a spreadsheet of all the Bangladeshi workers I hired for $1/hour to help me complete the task. And they did an excellent job creating lists of swimming pool owners in the area that I could contact.

However, when I sold the business about a year and a half later for a great return, the guy who bought the business and the business broker who sold it for me couldn’t stop laughing about how I was paying someone named Rup Rup $1/hour to create lists of swimming pools.

And, to be completely honest, that’s not something I would do today.

It worked very well for me at the time and I had a successful sale of the business by offering a low-cost system, but the same thing wouldn’t work very well today. I don’t do that kind of low-cost outsourcing much at all anymore as I focus as much as possible on building a full-time team.

And if I do outsource, I often try to pay more. I want to pay a price that gets lots of people interested, rather than trying to beat everybody down.

And it seems I’m not the only one who is trying to move away from low-cost labor, either. Many of the different freelance websites are now trying to offer options that assure higher-quality workers, even if that means more expensive labor.

That’s where the movement is going.

As more digital nomads build and scale their businesses, having full-time employees in a company is simply good business. You no longer have to compete with other employers as you have a team that is fully dedicated to building your business.

The Qualifications for a Good Hiring Location

You will need to hire different types of talent depending on your business, your preferences, your work style and expectations, and the tasks you need completed.

Ask anyone, I’m a bit difficult to work with. I’m demanding. I’m pretty neurotic about things being done on time. I don’t like to be bothered a lot. And I like people who can get the job done without needing a lot of management.

Because I know that about myself, I choose to hire a certain type of worker, and that often means hiring from specific locations and avoiding others.

As Nomad Capitalists, getting the best of both worlds will often mean looking to different hiring locations for your different needs. I do not mean this in a discriminatory way — I have worked with people from India and the Philippines and other countries who have delivered very professional work — but I have found that different cultures and educational backgrounds do make for different work experiences and worker aptitudes.

Knowing what you want and what your business needs can give you a better idea of where to hire simply because different labor markets generally have distinct strengths.

I understand that there are certain countries that people commonly use to hire offshore workers, but I want to turn some of the traditional countries on their ear because they may no longer offer what you are actually looking for.

Instead, I’m going to introduce countries that suit my standards. Obviously, your mileage may vary and other countries may be more suitable for you. However, if you feel your business has evolved to a point where you’re not simply looking for someone to do $2/hour jobs and you are ready to hire folks who can become A-Team players who contribute high levels of value to your team, the following are my top five recommendations for hiring foreign workers.

The Five Best Countries for Hiring Foreign Workers

5. Venezuela

Venezuela provides quality remote workers

A surprising find in Latin America, Venezuelan remote workers produce great quality work.

Average Monthly Wage: 1,307,646 VEF*

*While this technically equals roughly $13 USD, inflation is so out of control in Venezuela that any reported “average wage” will be entirely unreliable.

Venezuela is a bit of a wild card but it’s actually a very interesting place to hire. Not only was Venezuela a surprising find in terms of how easy it is to work with remote workers there but I have also been extremely impressed by their quality of work.

Because of my personal preferences, I’m not typically one to hire among the more relaxed latino population. I know several entrepreneurs who have moved out of Panama City and gone to Europe — including to countries as expensive as Germany — because they found that the productivity in Germany is better than in places like Panama.

On top of that, Latin American isn’t often as cheap as places like Southeast Asia or India and the work is not as good as what you’ll find in many European countries. But I’ll tell ya, there is something about the Venezuelans.

The challenge with a lot of Spanish speakers is that there is a very large Spanish-speaking ecosystem. If you’re Armenian or Estonian or Norwegian and you don’t learn English, you’re kind of screwed. You’re going to be so limited. You basically have to learn another language, and that second language is almost always English.

However, if you are a Spanish speaker, you’ve got Spain and all of Latin America from Mexico all the way south (excluding Brazil and Guyana, of course) so there’s not this great impetus to learn English.

So, at times, the English isn’t as perfect.

However, I’ve hired numerous people in Venezuela for one-off jobs and had great success. At one point, I had one of my team members do a test for other websites and we hired several Venezuelans to create content for those sites. The English content they produced was pretty good and came at very reasonable prices.

Those reasonable prices do come for a rather sad reason, though. Venezuela has been suffering an ongoing economic crisis and that has made labor somewhat affordable. As unfortunate as it is, rates are low and I have found people in Venezuela to be really on the ball.

When I first started hiring in Venezuela, I was kind of surprised it worked out so well. And I am continually pleased to see great work come out of Venezuela.

Again, I have found great success in hiring virtual assistants and people who can help with writing and data entry. I’m not so sure about IT or technical stuff. However, you get a more western mindset and better communication (in my experience) than hiring from Bangladesh or going after the cheapest options.

Overall, Venezuela is an interesting place to hire that not everyone knows about that offers great rates and quality work.

4. Ukraine

Ukraine is a great place to hire foreign workers

Ukraine is known in the outsourcing world for fantastic IT talent.

Average Wage: $325 USD

It’s no secret that Ukraine has a lot of different types of talent. People know it largely for IT, to the point that IT workers from Ukraine are becoming a bit more expensive. However, because of the recent devaluation of Ukraine’s currency — the Hryvnia — Ukraine is now actually the poorest country in Europe (the top spot formerly belonged to Moldova).

Poorest country or not, Ukraine has incredibly good IT workers. They also have great talent when it comes to graphic design and marketing. Ukraine has a very expressive culture with many people who are interested in fashion.

Many of the people I know from Ukraine are focused, on-the-ball, and tough. The combination makes for a wide variety of reliable talent.

Kiev is certainly not a bad place to live if you want to be managing your team, either. I have a client who recently moved his operations from Poland to Ukraine for the lower cost of living and the more affordable and better quality labor. He sees that the Ukrainian people have greater focus and a hunger to perform.

Another benefit to working in Ukraine is that the culture is very similar to Russia. If you’re doing stuff that’s not in English, you will find greater diversity and more options by working with Ukrainians. It is still kind of a wild, wild west for some legal aspects, but not a bad place to potentially put a large part of your team.

The one potential downside to working with folks from Ukraine is their super direct nature. This can prove to be more of a challenge when hiring, but can actually be a positive once they’re on your team… as long as you’re prepared to deal with that directness.

3. Moldova

Moldova is an off-the-radar country for outsourcing

Off-the-radar and extremely affordable, Moldova is also home to highly skilled foreign workers.

Average Wage: $362 USD

Moldova is a bit more of a hidden gem than Ukraine. People who are deep into the IT and programming world probably know about Moldova.

Moldova’s next-door neighbor, Romania, is a bit better known and is another good place that I’ve talked about before. I have met people in Bucharest who speak perfect American English with American accents and everything. That observation years ago led me to ask why everyone was going to the Philippines and India to set up call centers when Romanians speak perfect English and aren’t much more expensive.

Add to that the fact that Romanians have a more western mindset, making it easier to communicate and easier to work with them because you can give them a task and then walk away knowing that they will get the job done.

The Moldovan people share many of the same characteristics. They speak Romanian and have many cultural ties to Romania. The advantage you have hiring someone from Moldovan versus Romania is that Moldova is a much smaller, poorer, off-the-radar country.

There is not a lot of economic potential for the country as a whole to develop and so many people have left already, but the talent is there and is high quality. So, while you may not set up a company in Moldova, you could certainly build a talented team of Moldovan workers and do so with potentially much less red tape than in places like Ukraine.

2. Serbia

Serbia is my preferred country for building a distributed team

Serbia is my preferred country for building a distributed team.

Average Wage: $492 USD

Full Disclosure: I run a team of Serbians. We’re building other teams and I’ve had people from Eastern Europe and Asia and the western world on our teams in the past, but my personal preference is to hire Serbians.

Because I have a lot of experience hiring Serbians, I also know that there are many mistakes that people make when hiring in Serbia. One of the mistakes I see people make is that they choose Serbia for all the wrong reasons. Too many guys go to Belgrade and fall in love with the women — and the women are stunningly beautiful, you basically run into supermodels at every turn — but many guys fall into that and use that as their excuse to hire in Serbia.

That’s not a reason to hire anyone, ever.

While I have found incredible success hiring in Serbia and find the mindset to be a perfect fit for my business needs, there is a large focus on fashion and image in the country that can be distracting if you don’t focus on finding the right hire.

The Balkans also have a different culture than many other places. It’s not entirely western. It is uniquely Balkan and it is a mindset that you have to adapt to. For instance, in some cases, people in the Balkans aren’t really on time.

In the end, this simply means that you have to do a bit more filtering.

Whereas in Ukraine people are pretty rugged and tough, in Serbia you have to filter. Still, the more laid-back mindset can be a positive. There’s not as much desperation and people are enjoying their life there. In the end, the bottom line is that you can find some really smart people in Serbia who can become great additions to your team.

1. Armenia

Armenia is a hidden gem for offshore workers

Armenians stand out among other offshore workers for their valuable talent and affordable prices.

Average Wage: $365 USD

I spend a lot of time in Georgia which means that I have heard and seen quite a bit of the cultural rivalry between Georgia and Armenia. It’s kind of like the rivalry between Serbia and Albania where they always make fun of each other, so I’ve got a lot of Georgian friends who like to make jokes about Armenians.

As much as I love Georgians and living in Georgia, I have to admit that the people there are a bit laid-back. While I enjoy the slower and more relaxed culture for lifestyle purposes, when it comes to hiring workers for business, I would actually recommend Armenia first.

Armenians are really on the ball. I once tested a couple Armenians to do some research for me and I was amazed at how thorough their reporting was with meticulous spreadsheets that included everything I wanted. And it was all done lightning fast. I didn’t have to ask twice and I didn’t have to teach them anything.

I’ve continually found this to be true.

Armenia has a relatively wealthy and global diaspora. There are many Armenians in Paris, for example, as well as in Los Angeles and other places around the world.

That is one reason why real estate prices in Yerevan can actually be higher than in other places in the region like Tbilisi. Even though the average wage is lower in Armenia, real estate is higher because of Armenia’s wealthy diaspora that works their butt off overseas and then comes back to spend their money.

Having gotten to know a lot of Armenians in my recent travels, I found them to be really on the ball while also being in a country that is off the radar from the more obvious places like Ukraine or Romania.

Many people have started to catch on to many of the “freelancer countries.” The Philippines, India, and Ukraine have become household names and others are becoming known in their respective communities. But no one is talking about Armenia.

Costs are low in Armenia and even a recent college graduate is doing relatively well if they earn $300 a month. If they make $600-$800 a month, they’re pretty darn happy. And once you start paying them into the four figures — at least for folks in their 20s who are hungry and ambitious — you are basically the best option they’ve ever seen.

And for $2,000 a month, you could basically secure the best-educated person (even educated at an American university) who works with a total sense of responsibility where you can just set it and forget it. I’ve been told that, for $2,000 a month, that person will never quit, whether it’s in marketing or other fields.

Overall, Armenia really stands out for value, perseverance, and the fact that it’s still somewhat open and available and not overrun. You would also have lower costs of operation if you actually wanted to set up a bigger office there. There are so many possibilities in Armenia.

Andrew Henderson

Andrew Henderson

Andrew has been internationalizing since 2008, and has learned what works and what doesn't work when it comes to reducing taxes, increasing personal freedom, and creating wealth. Click here to work with him personally.
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