Future of Philippines Outsourcing

The future of Philippine business process outsourcing is promising, with the following factors contributing to its continued growth: the accelerated digital transformation of many businesses leading to an increase in demand for outsourcing services in areas such as digital marketing and IT support; the expansion of services from the Philippine BPO industry beyond traditional customer service and support functions to include areas such as financial services, software development, and data analysis; increased investment from the Philippine government to develop the country’s technology and infrastructure, including the education system, which is expected to further strengthen the outsourcing industry in the future; the diversification of clients from various industries, including healthcare, finance, and e-commerce, demonstrating the versatility of Philippine outsourcing services; and the growing demand for outsourcing services in general.

Outsourcing to the Philippines has a bright future

The Philippines is one of the fastest-growing nations in the outsourcing industry, with a staggering 30% growth within the last decade alone. In fact, business process outsourcing accounts for one of the biggest boosts to the Philippines’ economy and currently employs more than 2 million people in several sectors, boasting a net worth of $24 billion. The BPO industry in the Philippines already has several key advantages as the top outsourcing destination – low cost of labor, an English-proficient and highly skilled workforce, as well as cutting-edge technology and infrastructure, are strengths that will continue to give the country an edge in the future. These are highly valued attributes to the world’s largest business process outsourcing companies in places like the US, Australia and the UK that rely on outsourcing.

With the rapid growth in Philippine outsourcing, the Philippines will continue to expand to offer more specialized outsourcing services. In a 2022 report shared by superstaff, analysts shared that the Philippines has improved its capacity to offer non-call center outsourcing services, including high-skill services such as IT, software development, finance and accounting, healthcare, and knowledge process outsourcing.

Impacts and opportunities of outsourcing in the Philippines?

According to USource, the Philippine BPO industry contributed to nation-building as the Information Technology and Business Process Management (IT-BPM) sector opened millions of jobs and contributed billions to the gross domestic product of the Philippines. Philippine revenue growth is at 5.6% from 2016 to 2022, and the IT and Business Process Association of the Philippines (IBPAP) expected the IT-BPM industry’s 10.6% revenue growth and 9.1% headcount growth to double by the end of 2022. As outsourcing helps developing nations grow, one notable effect of outsourcing in the Philippines is the international recognition that this industry received, thus solidifying the years-long accolade of the nation as the call center capital of the world. Santos Knight Frank, the world’s largest independently owned property consultancy, also states that investors are “eager to capitalize on the Philippines’ sound macroeconomic fundamentals, excellent pool of low cost-skilled labor, quality customer experiences, continuous technology and infrastructure development and one of the cheapest rental rates in Asia.” 

Reasons why Philippines is still the future in outsourcing

According to connectOS, the Philippine economy is one of fastest-growing economies in Southeast Asia. A significant reason why the Philippines maintains this reputation is because the Philippine government has invested significantly to position Manila as the leading global provider of outsourcing services and the industry is currently valued at $250 billion, hailed as the Call Center Capital of the World with 16-18% of the global market share. Foreign investment is welcomed and government support is very much alive. The government continues to actively invest in the nation’s technology and infrastructure to support the outsourcing industry. Tax and non-tax incentives are available to support foreign investment. Over 500,000 Filipinos are employed by BPO companies and are now the top foreign exchange earners in the Philippines, along with foreign exchange remittances coming from overseas Filipino workers (OFWs), with about PhP1-B (approximately USS$20-M) total revenue, as reported by BizScale.

Delivering quality

The Philippines boasts a highly-skilled workforce with a huge pool of professionals who are university-educated – hundreds of thousands of university graduates enter the workforce each year with western-influenced training, excellent communication skills, and the unique resourcefulness only Filipinos can deliver. Colliers also adds that the Philippines is considered a top-tier destination for the BPO industry; it is a market leader in terms of voice-related services, and it is rapidly expanding its capacity to provide non-voice Business Process Management (BPM) and IT services for the expanding list of global clientele. Being a former colony of Spain and the United States, the Philippines has a strong affinity to Western culture and is the world’s third-largest English-speaking nation. In a report by Global English Corporation, the Philippines was named as the world’s best country in business English proficiency with almost 60 million English speakers. Most of the Philippine workforce graduate from schools that adhere to western standards when it comes to English. 

Competent workforce

Filipinos are known for their excellent work ethic, resiliency, and professionalism. Aside from its diverse talent pool, rich culture, high literacy and communication, what makes the Philippines an ideal staffing destination is how the country has a strong western influence that makes it easier for foreign investors, particularly the US, to conduct business operations that saves plenty of time and resources, especially when understanding tasks, communicating with clients, and interpreting important assigned documents. The outsourcing workforce in the Philippines also provides 24/7 services. BPO centers have staff working multiple shifts so multiple time zones are covered. The Philippines also has a highly specialized talent pool with employees who have worked for large multinational and business process outsourcing companies. 

Competitive pricing

connectOS emphasizes how employee costs in the Philippines are generally 30% of an equivalent role in Australia or the US. For every role you have in Australia, you can typically hire three people in the Philippines for the same cost. This is achievable due to the Philippines having one of the lowest costs of living among its regional neighbors. Offshoring careers are highly sought after – an employee working in an outsourcing/offshoring role earns, on average, more than double the minimum wage – AUD$770 – AUD$930 per month.

Cost-efficient

According to The Scotsman, saving money is the main reason the Philippines continues to be the top outsourcing destination. Outsourcing can significantly reduce the cost of material expenditures such as office space, infrastructure, technology, and other equipment, as these become the BPO provider’s responsibility. In addition to that, companies also save on employee costs like salaries, health care, and other benefits. All in all, companies outsourcing to the Philippines can save up to 60% on labour and 40-50% on operating costs, savings that can go towards resources that will contribute to healthy and substantial growth. 

Continuous demand

As businesses around the world continue to seek ways to reduce costs while improving quality, the demand for outsourcing services is expected to increase, further driving the growth of the Philippine BPO industry. According to Select Voicecom, the hundreds of established agencies settled in the Philippines has an expected annual growth rate is around 7% to 9%, which is higher than the expected global growth. Prime Outsourcing also elaborates how the Philippine BPO industry has contributed $30 billion to the country’s economy annually. Furthermore, a buoyant outsourcing industry bodes positively well for the real estate sector as a result of increased demand for office space and residential condos, in addition to its benefits for the transportation, telecommunications, hospitality, and retail sectors, as Colliers stated.

Adaptable to change

As employees, Filipinos always strive to deliver results because they have quality-driven single-mindedness and perseverance like no other. Along with their technical education and commitment to deliver the best customer experience, they are also highly trainable, so they can keep up with new tasks and job specifications quickly and effectively. The Philippine workforce is also well-known for the type of resilience that makes them resourceful during times of abrupt changes – a skill you can most likely see at work as resiliency in the Philippines always goes hand in hand with adaptability.

future of philippines outsourcing

Frequently asked questions

Does the Philippines benefit from outsourcing?

Business process outsourcing is a powerful force driving the Philippine economy that has created a ripple effect in many aspects, helping build export growth, employment generation, telecommunication sector growth, real estate growth, small business growth, and transportation growth. According to Connext, the Philippines ranks 18th among the 2021 Top 50 Digital Nations Global Innovation Index by Tholons, a leading consulting firm. The Top 50 Digital Nations is an annual list which ranks top countries by Innovation / Digital, Super Cities, Population, Diversity & Inclusion. In addition, the Philippines has several highly urbanized cities, six of which placed in among the Top 100 Super Cities in the Tholons’ Global Innovation Index for 2021. Santos Knight Frank, the world’s largest independently owned property consultancy, also states that investors are “eager to capitalize on the Philippines’ sound macroeconomic fundamentals, excellent pool of low cost-skilled labor, outstanding customer service, continuous infrastructure development and one of the cheapest rental rates in Asia.”

What is the effect of outsourcing in the Philippines?

The Philippine BPO industry exists as the resilient economic driver of the country with over 11% contribution to national GDP and employing over 1.3 million Filipinos in more than 1000 BPO companies – with that figure growing at an annual rate of 8-10%. According to USource, 27% of the BPO sector’s workforce disperse across the countryside. Emerging and established hubs expect to erect their offices in provincial areas, therefore bringing a significant rise in the real estate industry. Another benefit outsourcing brings to the Philippines is improved telecommunication and internet services, along with the installment of fiber optic cable networks to support the continuously growing business demands – which inevitably benefits even non-BPO employees with wider internet coverage and faster internet speeds at reduced costs. This means that the BPO industry offers valuable opportunities to all Filipinos for their welfare and the country’s overall economic growth. 

What makes the Philippines the best in outsourcing?

Outsourcing to the Philippines automatically raises the standard of work. When you have access to more time and a diverse talent pool, naturally these factors will build and strengthen your brand – you get better concepts and better content. Having offshore staffing can enable quick development and delivery of ideas and products into the competitive market especially in terms of making your business accessible and attractive to the public. In addition to that, the reason why a lot of investors and entrepreneurs find the Philippines so attractive when looking for an outsourcing location is, besides the cost-efficient labor costs, where you get access to a multi-talented workforce at such an affordable rate, and the deeply-rooted values they uphold in their personal and professional lives, there is an unmistakable, genuine sense of cultural compatibility that you can only find in the Philippines.

If you’re a business owner who’s about to embark on outsourcing and is currently looking for the ideal partner to push your business to even greater heights, you don’t have to sweat looking for the right partner to provide you cost-efficient service when you can turn to a safe, secure, and reliable outsourcing provider like The Outsourcer who can deliver you everything that you’ve been looking for (and more) with their cutting-edge team of Filipino virtual assistants. 

The Outsourcer has only the best talent for whatever job you need to be done and will work on continuous training and coaching them to give you better results. Save on recruitment and training expenses, while maintaining successful operations free of doubt as your business grows by scheduling a free consultation with us today.

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