Here are some reasons for you to outsource to the Philippines.
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 (BPO) 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. Examples of these sectors include SEO, call centers, online marketing, virtual staffing, IT services, and more. Along with the remittances of 10 million overseas Filipinos, outsourcing is one of the legs of the Philippine economy. The Philippines is among the top outsourcing countries Western countries outsource to, there really is no doubt that the country has emerged as the world’s largest—and leading—top outsourcing destination.
Reasons why you should outsource to the Philippines
English proficiency
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.
Highly-skilled talent
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.
Overall availability
The outsourcing workforce in the Philippines 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.
Cultural match and compatibility
Filipinos are known for their excellent work ethic, resiliency, and professionalism. Aside from its 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, especially when understanding tasks, communicating with clients, and interpreting important assigned documents.
Good economic growth
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.
Data security and privacy
The Philippine government has passed essential data privacy acts and laws that protect, support and strengthen the BPO industry like the Data Privacy Act of 2012 (RA 10173), which seeks to protect all forms of data given, be it personal, private, or sensitive and includes those who, while not found or established in the Philippines, use equipment or maintain an office, branch, or agency in the country, and Republic Act 10844: Department of Information and Communications Technology Act of 2015, which ensures that all businesses in the information and communication fields follow trade and safety laws as it intends to expand the sector while assisting in maintaining the quality of its services, therefore making BPO activities in the Philippines more convenient.
Better quality of life
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. This means that the BPO industry offers valuable opportunities to Filipinos for their welfare and the country’s overall economic growth.
Filipinos are flexible
As employees, Filipinos always strive to deliver results because they have quality-driven single-mindedness and perseverance like no other. 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.
Cost-efficient labour costs
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.
Legal exemptions and government support
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 government has invested significantly to position Manila as the leading global provider of outsourcing services and the industry is currently valued at $250 billion. Foreign investment is welcomed and government support is very much alive. The government continues to actively invest in the nation’s infrastructure and technology to support the outsourcing industry. Tax and non-tax incentives are available to support foreign investment.
Fringe benefits
The Republic Act No. 7916 back in 1995, also known as the Special Economic Zone Act, makes the Philippines an attractive destination for outsourcing as it appeals to foreign investors with the various tax breaks and other crucial incentives within these special economic zones designated for BPO. Doing Business in The Philippines highlights how the BPO industry in the country has many great benefits that include paid holidays and vacations, life insurance, paid sick leave, free beverages, flexible schedule and dress code, the option to telecommute which many employees desire, professional training, and much more.
Reduced legal complications
According to MySource, one of the biggest problems in running a business is that you are faced with a lot of paperwork, legal, accounting, financial, human resources, and other related issues during the process. When you outsource to the Philippines, you absolve yourself from these troubles since you reduce legal liability and management issues when they provide you with a strong human resources management team that can help you easily set up training projects and provide the right resources for your employees and the management of your business, especially since Legal Process Outsourcing (LPO) is one of the fastest growing sectors in the Philippine BPO industry.
How much can companies save annually
According to The Scotsman, saving money is the main reason the Philippines continues to be the top outsourcing destination. Outsourcing can 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.
Philippines: the ideal outsourcing destination
Entrepreneurs and employees can maximize the fruits of outsourced work better if they can wisely choose which national cultures can go well together, while still respecting each others’ differences. And if you’re still on the lookout for the right culture for your right partner, you should outsource to the Philippines. The business processing outsourcing 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 process outsourcing companies in places like the US, Australia and the UK that rely on outsourcing.
Frequently asked questions
Why should we outsource in the Philippines?
According to Connext, the Philippines is the top outsourcing destination for investors looking to outsource operations as it 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 are foreigners’ reasons to outsource to the Philippines?
The key reasons why a lot of foreign investors and entrepreneurs find the Philippines so attractive when looking for an outsourcing location are the cost-efficient labor costs, where you get access to a highly-skilled 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. These factors made the Philippines as the top outsourcing destination for USA, Australia, Britain, and other parts of Asia, and still counting.
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