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Outsourcing to Lebanon

20 May 2022 9:47 AM | Anonymous member (Administrator)

Author: This article is part of an expert series written by Ned Taleb, Co-Founder and CEO at several companies including B-Yond, a company providing AI-powered network automation solutions; Reailize, a business solutions company; Co-Founder at Nexius, a company providing innovative end-to-end deployment services and smart solutions on the latest technologies among others. Taleb was named EY Entrepreneur of the Year in 2014 and teaches Entrepreneurship at IE Business School. 

[Disclaimer: The below article is the author's personal opinion]

I am not here to tell you ‘Hey, Lebanon is now cheap and therefore an opportunity for outsourcing”. I am here to tell you that my brother and I have done that for 13 years, and there has never been a better time to do so and I am writing this article today to share the pros but also the cons of working with outsourcing companies in Lebanon so you as a Lebanese professional living outside of Lebanon can judge if it’s right for you.

I was approached recently by an ex-colleague who does business in Brazil about outsourcing to Lebanon. Unfortunately, following a financial crisis, low labor costs can attract interest from businesses looking to outsource work. Still, I appreciated his interest in our beloved Lebanon.

In a similar context, 20 years ago, I landed in Argentina for the first time. The country had just defaulted the year before under the rule of Carlos Menem. The Peso went from 1:1 with the USD to 3:1. The Lebanese crisis today has many similarities with the Argentine one. I also saw an opportunity for outsourcing to Argentina then; you could hire some people back then for 500 pesos per month or USD $167, and for the following 10 years it was a great low-cost hub. The following last decade, and despite the Pesos continuing its devaluation, inflation in Argentina has pushed the cost back up. Today, the Argentineans are adapting to reality; demanding USD salaries as their trust in their currency is close to nil.

[Photo credit: Linkedin]

The case for outsourcing to Lebanon is simple

Lebanon has top schools and a history of training top scientists and engineers. Lebanese are multilingual, street smart, practical and have an entrepreneurial mindset. Cost has been competitive even before the October 17th revolution (comparable to traditional outsourcing locations such as India or Argentina). Costs have become somewhat cheaper, but the global shortage of technical professionals does mean that many can command a decent salary in USD. 

Challenges? Infrastructure is the top concern 

Almost every company I tried to convince to outsource jobs to Lebanon complained about the infrastructure. Our failed political system has ruined the infrastructure from electricity to internet connectivity, and there is no light yet at the end of the tunnel. Another concern is that the country’s financial system is not the easiest to navigate and paying through bitcoin is not a scalable model yet. You need to understand how social security (‘Daman’) and terminations work.

In order for Lebanese companies to increase their competitiveness globally, here are four actions they can take, inspired by our work with Beirut-based outsourcing company Novelus:

1- Have at least two or three backup internet connections
2- Have your own power generators to avoid long electricity outages
3- Set up European or other international bank accounts from which you can bill clients
4- Recruit top talents who are aligned with the company’s culture and handle talent acquisition, on-boarding, compensation and benefits.

During our work with Novelus, we only handled technical interviews and gave the final green light for a candidate. The teams assigned to us are co-located and live our core values. In a world of WFH, interactions are seamless. We have lower cost yet exceptional talent, and our retention rate is close to perfect. We have hundreds of US-trained team members and a team based in Beirut. 

Give our Lebanese talent much needed opportunities 

To close off this article, let me tell you that after founding many companies, and like many successful Lebanese that are members of LebNet, nothing gives me more happiness or sense of purpose than giving opportunities to young Lebanese, some graduating in a pandemic, with minimal job opportunities abroad, and in a country brought down to its knees. That’s why I am a massive believer in LebNet’s mission, among other organizations such as Jobs for Lebanon, that are facilitating a great number of job opportunities for Lebanese.

Looking at the outsourcing tech companies in Lebanon, there’s only a handful and the current leveraged talent is a few thousand people at best. The potential is ten or twenty times when you consider the thousands of engineers and software people graduating per year. This is the fastest positive impact we can bring to Lebanon, and I hope the Lebanese Diaspora continues to investigate how to give back to Lebanon.


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