7 reasons for outsourcing to the Philippines

Gary Culverhouse
AUTHOR
Gary Culverhouse
    6 minute read

Managing a self-owned business can be a tough and grueling job for entrepreneurs because they have to balance controlling their costs without compromising quality. Business owners implement strategies that target this balance.

For some, they contract workforce talent across the globe targeting labour markets that offer highly skilled, well-educated workers at a lower cost. This is called outsourcing. Similar to this is offshoring, which refers to the expansion of a business operation into a lower cost economy to leverage cost efficiencies. Based on the 2019 A.T. Kearney’s Global Services Location Index (GSLI), the Philippines is ranked within the top ten best countries for Business Process Outsourcing (BPO) in the outsourcing industry. The Philippines is a country that offers outsourcing solutions to entrepreneurs and has always been ranked as one of the best outsourcing countries in the world. Listed below are the reasons why:

  1. Time difference is not an issue Time difference is not an issue One reason why the outsourcing industry boomed to success in a country like the Philippines, is because Filipinos are flexible on time. Filipino employees are willing to work shifts even if it means working at night, on holidays, and challenging schedules to accommodate clients regardless of where they are located in the world. In Australia, the Philippines actually has the same time zone as Perth and is 2 hours behind Brisbane, Sydney and Melbourne.
  2. English language proficiency English language proficiency Education First released their 2020 English Proficiency Index (EPI) scores for 100 countries around the world, and ranks the Philippines as 562 out of 700. For context, the highest rating country is the Netherlands, garnering a score of 652. The country's English competency in Asia is ranked second only to Singapore which garnered a score of 611. The EPI study is designed to quantify global workers' English competency in the workplace.

    English is actually one of the official languages of the Philippines and is used as a way of verbal and written instruction across the country's educational systems and institutions. Given the literacy rate of 562 out of 700, it's understandable why businesses are employing Filipino staff when deciding to outsource.
  3. Highly skilled talent Highly skilled talent While it is a popular misconception that BPO in the Philippines is limited to call centres, there are a large number of providers offering talent across a multitude of fields including human resources, customer service, financial services, legal transcription, software development, animation, graphic design, content writing and marketing. Contrary to the belief that the primary reason business owners outsource is only to reduce costs, they also choose to outsource to target the best talent for the job to ensure they are investing in the right staff.

    Filipino employees are quite resourceful and are able to find the easiest ways to carry out their assigned tasks with minimal supervision when given clear instructions. They are fast learners and are able to easily adapt to new systems, processes, technologies and workplace situations.
  4. Excellent work ethic Excellent work ethic Business owners invest in Filipino teams due to their excellent work ethic, values, integrity, loyalty, service-oriented mindset, and the friendly working atmosphere they seem to foster in any organisation's culture. They value integrity just as much as they value time and show innate respect for individuals, both in a team environment and outside of work. Filipinos generally know what fun is without forgetting what responsibility entails and they place high regard on professionalism.

    It's in their nature to be respectful and is evident in their workplace interactions with managers, colleagues and clients. They are able to work well under pressure due to their patient and calm persona. The positive attitude Filipinos have towards work is what generates the success behind outsourcing teams in the Philippines.
  5. Quality yet cost-effective Highly skilled talent Filipinos strive to produce quality work. This is obvious by looking at the outstanding business results produced by BPOs in the Philippines. In fact, performance efficiency led the BPO industry to grow in the country with a reported figure of 1.35 million employees in 2017 while reaching 22.1 billion US dollars of revenue. Simply because Filipino talent is a low-cost alternative for businesses, does not mean quality is jeopardised. The difference in staff costs, benefits and operational effectiveness between countries make the Philippines a more appealing location to outsource and grow an offshore team.

    The cost of living in the Philippines is also much lower than say Australia for example. However, a lower cost of living doesn't mean a lower standard of living. In fact, many outsourcing companies in the Philippines offer employment to local Filipino's to help support them and their families. All in all, companies that outsource to the Philippines are actually supporting the teams financially while paying LESS for MORE.
  6. Strong government support Strong government support As one of the economic pillars and main revenue generators of the country, the Philippine Government recognizes the potential growth of the industry by providing strong support and infrastructure for BPOs and for businesses setting up an outsourced team. Some of the government and industry initiatives to ensure the Philippines maintains its place as one of the top outsourcing destinations include:
    • Partnerships with universities in the Philippines to create BPO-specific curricula to prepare the future BPO workforce
    • A voucher system from the Technical Education and Skills Development Authority (TESDA) as funding support for call centre training
    • Tax and non-tax incentives to support foreign investment
    • Creation of national Information and Communications Technology council.
  7. Cultural compatibility Cultural compatibility Tracing back, the Philippines was colonised by foreign forces from Spain, the United States, Japan, Portugal, and other countries. As a nation that was colonised by various foreign invaders in the past, Filipinos were influenced by ethical values, traditions, customs, behaviours, and ways of life that weren't originally theirs. This history is what comprises the Filipino character at present. Not only have they adopted many of the western cultural traditions but also the lifestyle. They communicate effectively with their foreign partners in the industry as there is almost no language barrier and can speak about common topics of interest from sport, politics, television, news or work concerns. This western lifestyle adoption has created compatibility among Filipinos and foreign cultures giving them the edge against other nationalities in providing excellent BPO services.

Watch as Gary Culverhouse, National Sales Manager for Beepo, highlights the 7 reasons for outsourcing to the Philippines:

Considering outsourcing?

So, now you know why the Philippines is one of the top outsourcing destinations in the world - what's next? Check out this blog if you are considering hiring offshore staff but not sure what to expect.

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