Expensify offer ‘hassle-free’ expense reporting built for employees. Each year they engage in ‘offshoring’ – taking their workforce to a foreign location where they’ll work on specific projects for a month. This benefit is challenging to make work but very rewarding. David Barrett, Expensify’s founder and CEO, tells HRZone about offshoring, how it helps the business, and how he makes it work.
The early history of offshoring our entire workforce
The first time we did it we were between offices. We had one month and they said ‘what should we do in the crossover period?’ and our bosses joked ‘ha ha ha we should go to Thailand.’
So we thought ‘why can’t we?’ We were an internet company and the internet goes everywhere! That was almost ten years ago and every year since then, now with Expensify, we’ve gone to a different place each year.
Unpicking the benefits of offshoring
It’s interesting trying to summarise the benefits of offshoring as they are numerous. There’s a series of obvious things and there’s a series of very sombre important things.
Firstly, the obvious things: it’s super fun. Also, it’s a great recruiting benefit: other companies are giving iPads and we’re going to Thailand every year, or Vietnam, or Croatia, or the Philippines. Last year was Portugal. So it’s always somewhere different and actually I think that’s key to the experience – finding somewhere very far from home, with a very different time zone and a very different culture. It makes everything as different as possible.
It’s not a vacation; it’s very much a business trip. It’s the most productive month of the year because we take away all of the distractions at home and then surround you with just your co-workers and we put you in this environment that is incredibly formed and it has the effect of pushing you together.
It’s the most productive month of the year because we take away all of the distractions at home and then surround you with just your co-workers.
Why? Because it’s basically a case of ‘us’ versus ‘everyone else.’ The only people you know within a thousand miles are the people you work with and especially if a lot of the people that we hire haven’t done a lot of travelling, they feel uncomfortable so basically it makes them rely on each other and trust each other and it’s a great thing.
This is why I think some of the secondary benefits come from the fact it puts people into a completely different frame of mind which is a much more creative frame of mind because it exclusively breaks the nine to five habit and gets people out of their comfort zone. It puts problems in front of them and forces them to solve them.
Ultimately you develop a bunch of habits in the office, which are great, but they encourage you to optimise to a local maximum. You kind of figure out what you do and you can always work for that and get in that habit but then when you get into an environment where, for example, the internet is super sketchy or there’s no power or quiet place to take your phone call, then you start to think on a more global scale.
So you ask questions, such as “do I really need to make this phone call?” or “I stopped doing that thing I thought was important for a month and no-one noticed. Was it even important?”
Nipping doubt in the bud by putting yourselves in challenging situations
One of the biggest challenges being an entrepreneur and being a disruptive business is that invariably you’re doing something pretty different and sometimes there can be doubts about the fact you’re going in a different direction to others in the industry.
If you do want to do something different, you have to really commit and that’s uncomfortable. A major constraint is doubt about whether we can really do this. And then you take something that’s completely absurd – a whole month away from home – and say that we’re going to minimally plan it, we’re going to show up and figure out.
And you all go there and it’s an amazing time and everyone comes back happy and healthy and you realise, “wow, that thing we did was so much crazier than the thing I’m afraid of, so why am I afraid of this thing again?”
Underlining our culture in the best possible way
We are a disruptive company and disruption doesn’t happen by being better at one thing or being different at one thing, it’s about being different at everything.
There is something to be said for getting people comfortable with going in their own direction and once you get comfortable doing something like offshoring, it becomes one of the many things that helps reinforce this sense that we’re comfortable showing our own path.
Everything about it is very unusual and it’s because we’ve done enough things that are unusual and they worked out and now we have no allegiance to how things are normally done.
How to make the offshoring trip work for everyone
The trip is totally optional and most people come but not everyone. Also, not everyone comes for the entire time. I have a new daughter, she’s eight months old, and her and my wife will come to Cambodia when we go this year, but only for two weeks.
The key to making the whole thing work is to be incredibly flexible around peoples’ personal needs with their comfort levels and the realities of life. Many of the younger people go for a vacation for a week after and a week before so it’s perfect for them. Some of our older employees come for a period, but everyone tends to come for a bit.
The key to making the whole thing work is to be incredibly flexible around peoples’ personal needs with their comfort levels and the realities of life.
But we’re still exploring. In the last year we’ve had to explore further into what we do with infants and children, but it’s the classic thing of this year will be different from last year, with its own challenges. Many people think ‘oh great it’s a onetime thing’ but we say ‘we’re going to figure out next year too and it will be different with different challenges but we’ll go ahead.’ We always try to have a new type of experience.
Selling it to employees in the most appropriate way
It’s not a typically relaxing trip. It’s actually a pretty intense trip because you’re with all your co-workers in tight environments in amazing parts of the world and so it means every night we’re going out to the clubs, every morning we’re waking up early and working hard through the day, every weekend we’re going out and doing something cool together. There’s some relaxing happening but that’s not the overall word that I would use to describe the trip.
How we sell it is interesting. One of the challenges of offshoring is that because it’s so multi-factored – there are so many components and people and moving parts – it’s hard to have a consistent message. It’s more like ‘hey, this is an option if you fancy it’ and if it appeals to them, great, and if it doesn’t then that’s fine too.
There’s no pressure to make people come so there isn’t in reality a whole lot of selling going on. But every year we do have to decide where we go and it’s this process of brainstorming and throwing in ideas that is the selling part. We then do a first round selection where we find the top three ideas and then people have to champion those ideas and research the areas and come up with potential itineraries.
This year we were looking at Ecuador, Costa Rica and Cambodia. I was championing Cambodia and what’s interesting is the people who were championing Ecuador and Costa Rica were not really thinking about it and they just sort of chose those locations because they’re safe – in a time zone sense, not physical sense.
I was selling Cambodia and so I initially said that Cambodia is a real adventure, something that’s going to challenge us and make it difficult. It’s going to be hot, dirty, with a foreign culture, and so the point of the trip to me this year is to shake things up.
So we can go to Ecuador or Costa Rica but that doesn’t really shake things up – we’d just be moving offices south by a thousand miles!
Selling offshoring to me is about trying to convince people to think bigger and take a risk and believe that we can take care of it. Again, the major benefit of this whole thing is if we feel the confidence in the company, in themselves, in our co-workers we can do amazing things and this is just a small example of the amazing things that we are able to do.
Higher productivity in different domains rather than higher overall productivity?
On these trips productivity remains high and that’s because everyone is just so excited and enthusiastic and we choose the projects to be tackled abroad that are big enough to engage a substantial majority of the company, that requires a lot of cross-communication and collaboration and that basically requires people to think outside the box.
So for these types of problems offshoring is great.
It gets harder in some areas, for example sometimes the internet sucks and there are some hits on productivity at different times but we set out to achieve things that reflect where we are, so for example we may focus on projects that don’t require a significant number of phone calls.
Bringing those underlying problems smack bang to the surface
While people are in the office and they’re on a regular schedule they can avoid certain people or they can just avoid certain problems which are really bothering them. There’s something nice about putting people in an environment that makes them uncomfortable, stressed and frustrated. It forces people to interact in close quarters who might be trying to avoid each other in other situations.
Offshoring forces people to interact in close quarters who might be trying to avoid each other in other situations.
So not on every trip, but on some problems arise that we need to talk about it and I think part of this is a frame of mind, shaking things up, forcing you to grapple with those feelings that you are trying to avoid. Every year we do it probably a couple of people quit or get fired afterwards, not because of the offshoring itself but because we’re forcing people to grapple with things. Sometimes things aren’t working out and that’s good for us to figure out.
As organisations grow there are more and more places for people to hide and objectively actually do no work but people don’t really notice and they can get away with that for a long time.
Shaking things up shines a different sort of spotlight on the organisation. Underperformers become highly visible. Sometimes they don’t realise they’re underperforming and they don’t know what’s going on. They think they’re really enjoying the work and not realising that they’re not and then in a foreign environment it causes them to view themselves, and their relationship with the team, differently.
It makes people remember that they have to do things they don’t enjoy, and perhaps like people they don’t like, and they realise it won’t change and it forces them to really think about their situation.
Business as usual when it’s business not-as-usual
We don’t leave anyone behind. Everyone’s welcome, including customer services. That is tough, because we’re going to a completely different time zone. We need to work through how we’re going to work with that.
One thing I’d say about this is that our goal as a business is to avoid customers that are demanding because I would much rather have customers that are just happy and love our product. So choosing customers is very important.
But offshoring also helps us identify customers who perhaps aren’t great for us, who don’t pay that much and are really demanding, so they help us identify customers that perhaps aren’t good for us because the costs to the organisation are too high.
It also helps us analyse our habits. So we can ask ‘we talked to this customer last week, do we actually need to talk to them now, is it truly urgent or will email suffice for now?’ Sometimes the answer is yes, so we’ll stay up late and phone those customers back in America.
Destroying fear one trip at a time
This situation provides real-life challenges and it’s about being very flexible towards work and really thinking things through. People doubt themselves and then you put them in a situation like this with a co-worker and they achieve something that’s amazing and they go back and tell others.
Everyone is held back by fear of what’s actually not that bad: when you’ve been through it a few times you realise it’s actually quite easy. It’s not a particularly challenging thing to do yet everyone’s terrified of it and I think that recognition is very valuable.
Future plans for expansion of offshoring and how we can make it better
We must always remember that this won’t work if we try and control it. It would be a total disaster if we had very specific, measurable goals and we tried to micromanage everything. It would also be way too hard to plan.
So the opposite approach works. What is the minimum we need to plan to make this work?
We also have to remember certain things: we have to accept there’s no way to know ahead of time if it’s going to work. We don’t even really know what the value is going to be until after that fact and then we’re going to talk about it, we’re going to work at it and then reflect at the end and learn from the things we did wrong.
We have a light touch. We’ll say ‘we’ve chosen a super cheap location and we’re going to meet at this place at this time’ and then we let people get on with it. People will talk to co-workers, friends etc. and they’ll do their research and figure out the good places to go.
The cost of offshoring
The important thing to understand is what we cover and what we don’t cover. We cover flights because they are the one large expense that’s roughly the same for everyone. Also, people have very minimal preference around them because all international flights are pretty much equal.
Then you’re on your own for food and hotels because that’s where people have strong personal preferences and a range of acceptable price points. Some people may really love great food but don’t really care about where they stay or vice versa.
Ultimately if the company pays for everyone it’s more expensive because you have to pay more if you’re going for a level acceptable to everyone.
But for at least a week during the trip we try and get a location where we provide lodging in a nice area, so in Portugal we rented a castle. We also cover random dinners, parties and other events.
One thing to be wary of is that some people think as it’s a business trip everything should be paid for. The answer to that is, of course, that the company cannot afford to pay for the whole trip for everyone. Also if it’s all expenses paid there are a bunch of abuse issues to worry about. It gets really complicated that way – in fact, so complicated that the trip becomes unfeasible.