Posted by Cedric Joshua Martinez
Feb 19, 2024
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Outsourcing to the Philippines is a cost-effective way of working with competent professionals and increasing your company’s ability to handle more projects and clients.
What makes these benefits possible? And how can you find the right Philippine-based service provider so you can make the most out of your outsourcing initiative?
In this article:
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Learn the 5 potential benefits of outsourcing to the Philippines
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Tips for finding the right Philippine-based service provider
5 potential benefits of outsourcing to the Philippines
When you outsource to the Philippines, you can:
1. Achieve higher cost savings
Outsourcing to countries outside your geographical location — or a practice known as offshore outsourcing — can bring you significant cost savings.
Compared to Western countries, offshore locations like the Philippines have lower cost of living. Because of this, operational costs such as payroll, utilities, and equipment maintenance are also lower.
Related: Five Ways to Save Company Money and Reduce Business Expenses
2. Work with competent professionals
The Philippines is the home to competitive, skilled, and qualified professionals, making it an ideal outsourcing destination if your firm has talent shortages and skills gap concerns.
3. Increase your firm’s efficiency
An offshore team serves as an extension of your organization. With their added support, your in-house employees can focus on more mission-critical tasks while ensuring that the administrative and non-core areas of business are still properly taken care of.
4. Scale your team more quickly
Many Philippine-based outsourcing companies offer scalable solutions. Thus, you can find the most feasible way to adjust your outsourcing requirements based on your current needs.
For example, you can start with one or two full-time or part-time staff. As your business grows, outsourcing gives you the option to increase the headcount of your outsourced team. On the other hand, when the business is slow, you can adjust your service requirements to fit your existing budget.
5. Leverage existing technology and office space
Established outsourcing companies in the Philippines are equipped with the latest technology. Depending on your needs, you can find specialized providers that use commercially available software, add-ons, and equipment.
Their office spaces are also located in Philippine Economic Zone Authority (PEZA)-accredited buildings. These buildings comply with the National Building Code of the Philippines to ensure they’re safe and conducive to working.
Of course, these benefits are far beyond lip service. These are actual advantages you can achieve if you make outsourcing right. But how exactly can the Philippine BPO industry bring you such benefits?
The following section shows us the contributing factors behind the country’s billion-dollar outsourcing industry — and why countless businesses worldwide choose to outsource here.
What makes the Philippines a great place to outsource?
Many businesses, especially those from Western countries, have been working with Philippine-based outsourcing companies to address talent shortages, bridge skills gaps, and expand their internal capacity to grow while staying within their budget.
So what exactly do these businesses see in the Philippines when they decide to bring a portion of their operations into the country? What made them stay here ever since they started their outsourcing journey? And out of the many countries that offer diverse outsourcing services, why did they choose this Southeast Asian country?
Below is a curated list of the reasons to outsource to the Philippines:
1. Competitive and proficient Filipino professionals
In its 2020 Census of Population and Housing data, the Philippine Statistics Authority (PSA) revealed that the Philippines has a 97% literacy rate. Meanwhile, its national capital region where most outsourcing companies are located has a 98.9% literacy rate.
The country also produces around 850,000 higher education graduates every year, according to the 2028 IT-BPM Industry Roadmap of the IT & Business Process Association of the Philippines (IBPAP). The same report showed that around 1.5 to 1.6 million employees work in the country’s outsourcing industry. With its large talent pool, you can have enough leeway to find talents who meet your standards.
English is also considered an official language in the Philippines. Because of this, Filipinos have a clearer and neutral accent compared to other Asian countries. Currently, the country ranks 20th out of 113 countries in the English Proficiency Index conducted by Education First.
2. Trademark Filipino service
Filipinos are known to always care. They care for their families, they care for their jobs, and as partners, they care for your success. You can also find them as people who provide attentive support and compassion. They are service-oriented workers who aim to go beyond what’s expected from them.
Working with them is also comparably easier than with their Asian counterparts due to their strong familiarity with Western culture. In fact, the country’s diplomatic relations with the United States can be traced back to the late 1940s.
Above all, Filipinos strive to learn more about your company and how you plan to reach your goals.
3. Favorable government support
The Philippine government — through its Philippine Economic Zone Authority (PEZA) and Bureau of Investments (BOI) — has been generous with its fiscal and non-fiscal incentives for registered BPO companies.
To attract more foreign investors, the national government continues its efforts to improve the infrastructure throughout the country. It also established the Department of Information and Communications Technology (DICT) to support the information and communications technologies requirements of the outsourcing sector.
4. Resilient outsourcing industry
With over three decades of experience in providing outsourcing services, it’s safe to say that the Philippines has established its authority as a world-class outsourcing destination.
From providing basic contact center services back in 1992, Philippine-based service providers are now offering other types of outsourcing. This includes accounting services, legal solutions, recruitment support, and IT support to name a few. At present, the Philippine BPO industry’s revenue is valued to be around $33 billion, data from IBPAP shows.
Even during the pandemic, the country’s outsourcing industry continued to flourish in terms of headcount and revenue.
5. Diverse and cross-sectoral BPO hub
The Philippines has a lot to offer when it comes to outsourcing. Aside from customer service and tech support, the growing BPO sector in the Philippines also caters to finance and accounting, IT, human resources, creative, and admin services.
While there are providers that serve as all-in-one hubs in the country, there are also firms that provide specialized services, bringing clients in-depth expertise and wide-ranging solutions to suit their needs.
In any case, outsourcing various functions to the Philippines enables you to get the expertise you need. At the same time, it allows easy collaboration for your outsourcing partners, thereby giving you better results.
6. Low cost of living
Outsourcing to reputable service providers in the Philippines lets you cut down on expenses while ensuring that your offshore team is still receiving fair wages.
This is because the cost of living in the Philippines is more affordable than its Western counterparts — and this alone has direct impacts on the country's labor costs. The same goes for other operational costs like rent and utilities. We can also add here the fiscal and non-fiscal incentives from the government.
If we’re going to sum up everything, it becomes apparent how you can reduce costs by outsourcing to the Philippines.
Meanwhile, when it comes to service delivery, credible outsourcing companies in the Philippines have internal Quality Assurance processes. Through this, you can be confident of receiving high-quality support throughout your engagement.
Read Next: D&V Philippines: Serving our Clients Through Excellence and Quality
7. Time zone flexibility
Outsourcing companies in the Philippines usually have round-the-clock operations.
This means that despite time zone differences, you can still work with your outsourced team in real time. Just make sure to let your provider know about your preferred schedule so they can also make the necessary adjustments.
Tips for finding the right Philippine-based service provider
How should you outsource in the Philippines to increase your chances of success? Consider these tips on finding and selecting the right service provider:
- Assess your needs to know which tasks to outsource and which ones to keep in-house.
- Plan the direction of your outsourcing engagement so you can set realistic expectations and measurable KPIs (key performance indicators).
- Evaluate your shortlisted providers based on their track record, client feedback, experience in your industry, and familiarity with your country’s laws and regulations to see if they’re compatible with your company.
- Choose a provider with enterprise-level data security to guarantee the protection of your company’s sensitive and confidential data.
- Ask about their business continuity plan (BCP) to ensure that they can deliver their services with little or no interruptions.
You might be interested: D&V Philippines’ Business Continuity Plan
- See if they have standard quality assurance (QA) practices in place to maintain and improve the quality of their service delivery.
- Look into their employee development programs to see if their employees are equipped with the necessary knowledge and skills.
- Review their company culture to determine if their employees have good working conditions or if they’re happy at work. Social media and employee review sites are among the best places to start.
- Examine their attrition rates — especially if you’re outsourcing professional services or you plan to outsource in the long term — to foresee how long an outsourced employee can work with you.
- Check the office location of your shortlisted providers, especially if you plan to do in-person visits.
Always keep in mind that in outsourcing, proper research and enough planning are necessary before starting any engagement. Doing these steps can mitigate any potential risks and increase your ability to utilize outsourcing to its full capacity.
In other words, the result of your outsourcing initiative will depend on the decisions you make — right from the start until the actual engagement — regardless of where you outsource.
Build your offshore team in the Philippines
Outsourcing companies in the Philippines offer a competitive suite of services to help you get the most out of your offshoring engagement.
With D&V Philippines, you have access to top-notch accounting professionals who will help you achieve your goals. Read our guide Outsourcing: How to Make it Work or contact our team to find out how you can succeed with your outsourcing engagement.
This article was first published on 13 July 2017 and was updated on 19 February 2024 for relevancy and comprehensiveness.
Edited by: Mary Milorrie Campos
