Philippines-based offshore outsourcing has gained popularity as a business approach. The nation’s IT and business process management (BPM) industry has gone a long way since its humble beginnings.

In 1992, the Philippine outsourcing market was established. At that time, Accenture was the pioneering business process company to provide outsourcing services in the nation. The first transnational corporation was founded by Sykes, and the first call center was afterwards formed by eTelecare Global Solutions. Since then, the business has rapidly expanded, and the Philippines now has over 700 BPO companies making the Philippines as one of the leading outsourcing destination.

For business operations of all sizes, business process outsourcing has emerged as an increasingly common strategy for cost reduction, increased productivity, and access to a worldwide talent pool. The Philippines has become one of the top locations for business process outsourcing, providing companies with a variety of advantages that are difficult to match making the country of the Philippines one of the leading global outsourcing market. The Philippine outsourcing industry provides a distinctive mix of benefits, from the absence of time zone differences to contemporary infrastructure as well as access to a highly skilled workforce.

Since then, the Philippine bpo industry has changed from offering low-cost services as an option to high quality services at fair prices. With the development of its horizontal BPM services in industries like finance and accounting as well as vertically-focused solutions like healthcare information services, the Philippines is quickly extending its capacity to provide non-voice BPM and IT services to an ever-wider range of clients globally.

While holding the top spot in voice-related services, the Philippines accounts for 13% of the worldwide BPO industry market share.

Let’s look at the positive aspects of outsourcing to the Philippines.

Benefits Of Outsourcing To The Philippines

1. Cost effectiveness

Compared to the technologically advanced world, living expenses are significantly cheaper in the Philippines. This does not imply that there is a lesser level of life; in fact, many BPO firms provide employment that has helped countless Filipinos sustain their families and raise their average cost of living.

This is the main reason why businesses outsource some of their work. Making the Philippines one of the top outsourcing destinations. Business functions are spared from paying operational costs for office space, computers, equipment, taxes, pay employees, or legal expenses on top of the fact that labor costs are often half of what they are in developed foreign companies. All of these together can result in cost reductions in operating costs of no fewer than 50% or more.

2. Time zones are not a problem.

No matter where in the world the customer is situated, Filipino workers are eager to work shifts, even if it involves performing work at night, on holidays, or in various timezones. The Philippines really shares a time zone with Perth in Australia and is approximately two hours later than Brisbane, Sydney, and Melbourne. Increased operation hours are also possible with flexible schedules, especially in sectors like customer service.

3. Strong Support From The Philippine Government

With the Philippine government support the business process outsourcing (BPO) sector and has put regulations and strategies in place to encourage its growth. The BPO industry significantly boosts the economic growth of the Philippines by creating jobs and luring foreign investors.

The government has teamed up with universities to develop business process outsourcing (BPO)-specific courses to train the future workforce in order to keep its place as one of the most prominent outsourcing destinations. Additionally, they provide financial assistance for call center training through the Technical Education and Skills Development Authority (TESDA)’s voucher program. Foreign investment can also be boosted by tax and non-tax advantages. A national council for technology for communication and information has also been established to monitor and support the development of the sector.

4. Scalability And Flexibility

Although it is possible to start outsourcing offshore teams, it is more secure to work with an outsourcing partner in the Philippines. The BPO provider works with you as a business partner to develop unique, efficient solutions. They recommend the most appropriate choice of action once you have discussed your individual aims and ambitions.

Scaling your staff without incurring additional expenditures is possible when collaborating with a Filipino workforce. It’s simpler than ever to grow the workforce based on the type of job and workload that your business processes requires.

Full-time employees, part-time employees, freelancers and remote worker are among the staffing alternatives provided by the Philippines’ business process outsourcing companies. Businesses are able to grow their staff in response to demand thanks to this flexibility.

5. Fluency In English

Approximately 70% of Filipinos speak English fluently. The majority of local kids start learning a foreign tongue even before they enter school. Once students begin receiving a formal education, their comprehension of English is further strengthened. The main language of regional business in the Philippines is English, which is also the language of teaching in schools there. The Philippines was placed 22nd in Asia by EF for English competence, right after Singapore.

Since English happens to be one of the official languages of the Philippines and is taught in all of its educational institutions, a considerable portion of its overseas labor force frequently returns with skills in languages in addition to English. The Philippines scored highly in the EPI research, which rates the English proficiency of global workers, suggesting that it is a popular outsourcing site and a good place for companies looking for English-speaking employees.

6. Boost Service Quality

You will be able to provide 24/7 coverage and delight your consumers in ways that weren’t previously feasible with an offshore customer support crew. You will get excellent support for your operations if you choose the correct bpo partner. The BPO service provider you choose to work with will handle your business continuity, management and internal issues.

The Filipino workers are very focused and are highly skilled workers on providing coverage around-the-clock. So, no matter where you are in the world or what time zone your clients are in, the Philippine outsourcing industry can provide business solutions to meet customer satisfaction.

The USA is the Philippines’ single largest customer nation, yet there is a 12-hour time difference between the two countries. Consequently, outsourcing to the Philippines still employs nearly 60% of the global outsourcing workforce.

7. Secure Data Privacy

By enacting beneficial regulations, the Philippine government support makes sure that the nation’s bpo industry prospers.

The Data Privacy Act of 2012 was approved by lawmakers because back-office outsourcing frequently entails exchanging sensitive information. The compliance of the nation’s privacy and security of information processes with international standards is ensured by this statute. To prevent illegal access to priceless private information, the law requires strong data regulation.

After the law was passed, numerous sectors, including the healthcare industry, began to consider the nation of Philippines as a potential outsourcing providers.

To secure the confidential data handled by BPO industry and uphold the confidence of its overseas clients, the government imposes data privacy requirements.

How much will it cost you to outsource to the Philippines? 

a number of factors, including the sort of employees you recruit, it should cost you approximately $500 and $1500 per month; clearly, someone like a licensed engineer or accountant with experience would cost more than a typical virtual assistant or customer service agent.

The Manila Bulletin reports that another factor that might help a business decide which BPO partner to work with is the reasonable hourly prices for Philippine contact centers. Outsourcing to the Philippines would often cost between $8 and $16 an hour for the services they provide. Outsourcing to the Philippines is by far one of the most economical choice when compared to hourly rates paid by centers in the US for local talent (US$24-$32/hour), Latin America (US$14-$20/hour), Western Europe (US$25-$35/hour), Eastern Europe (US$18-$26/hour), or Australia (US$28-$40/hour).

Tips For Successful Outsourcing To The Philippines

Take Small But Sure Steps

Start with tiny tasks if you have no prior expertise with outsourcing. For instance, you can begin by hiring just a couple of offshore workers rather than a whole team. You might initially choose short-term assignments as well. This will result to cost savings and make it simpler for you to leave if you decide the arrangement isn’t beneficial to you. It also enables you to experience the outsource operations without having to make a costly.

You might also start outsourcing out low-risk procedures like back-end services. Later, when you’re more confident, you may outsource more complicated services that may involve hiring virtual assistants or an offshore team of talented workforce that would maintain business continuity.

Invest In Trainings

To have tasks completed in the manner you desire, as a business owner you must teach your outsourced talent. Introduce them to your company and brand so they can appropriately represent you. This enables your team to work better and regularly accomplish objectives. They can function and make judgments on their own as a result of this and become less reliant on your feedback. Both your energy and time will be freed up, enabling you to concentrate on your other core competencies.

Provide the outsourced team with thorough training, especially if the jobs call for an in-depth knowledge of the procedures, business operations, business processes and company culture. Give them the materials and equipment they need to do their duties successfully.

Communicate What You Want

You must be aware of the personnel you seek and the outcomes you hope to achieve from your offshore outsourcing. Depending on how thorough you are with the screening procedure, the recruiting process might take a few days up to a few weeks. If you’re unsure about your outsourcing partner, you’ll waste both time and money. Make sure you are clear on the credentials they must possess and the concessions you are ready to make in order to speed up the hiring process.

When you’re outsourcing services, you should have some specific, quantifiable goals in mind. This facilitates the achievement of outcomes by your offshore team.

Know Your Budget

As much as you can, avoid extras and unforeseen costs. It can appear that you’re left with a lot more to spend than you actually have due to the inexpensive rates in your offshore outsourcing location. Don’t let the smaller overhead costs fool you. Until you are ready to outsource bigger work, establish an amount to spend and stick to it.

Maintain Open Communication

Other than communicating your wants, also maintain an open communication to create a thorough contract that specifies the work’s parameters, service level agreements (SLAs), costs, terms of payment, and termination provisions. Make sure a lawyer also examines the contract.

For an outsourcing project to be effective, there must be clear and ongoing communication. Name a point person who will act as your on-site eyes and ears. Ask your outsourced team to provide you updates frequently so you can keep informed and track their development throughout the project.

Choosing to hire business process outsourcing companies for highly skilled workforce may help reduce operating costs and boost profit margins when done properly. It can increase your productivity and let you concentrate mostly on important business functions.

Drawbacks In Outsourcing To The Philippines

1. Language Barrier

Despite the Philippines’ high level of English proficiency and , there may still be instances of cultural differences, cultural compatibility and misunderstanding or subtle language differences that may impair the precision of instructions and expectations between the company and the outsourced team.

2. Lack Of Control On Offsite Staffing

Consequently, it may be challenging to manage outside personnel mainly because of time zone differences and cultural differences. Your methods of communication are frequently digital, which might result in misunderstandings. It might be difficult to even monitor performance and make improvements.

Being physically apart from the outsourced workforce may cause a perception of loss of oversight of activities and procedures, which can be problematic for some firms.

To avoid this ensure continuous interaction and cooperation with your remote workers. Create a quality assurance team whose job it is to keep an eye on and enhance performance. Last but not least, make sure your outsourced talent receives ongoing training and the best support.

3. Labor Laws And Regulations

When assessing the benefits and drawbacks of choosing Philippines as your outsourcing destination, the law is a deciding issue. The Philippine labor code must be followed while selecting a BPO partner there. Therefore, you should educate yourself on the minimum wage, 13th-month compensation, overtime pay, and other perks available to contractors. Lawbreaking is punishable by severe fines and other sanctions.

While adhering to labor rules and regulations is the only available option. To comply with legal standards, cooperate with a local legal specialist. Offshore outsourcing is typically cost-effective, but look for a BPO partner with a pricing structure that benefits your company.

4. Regular interruptions.

The archipelago of the Philippines has a tropical climate. Its location on the western shore of the Pacific Ocean accounts for the region’s average annual storm count of 20. In low-lying locations that are in their path, cyclones result in power disruptions and job cancellations.

The Philippines may experience interruptions as a result of natural disasters, geopolitical unrest, and official holidays. Create a contingency plan and keep an internal staff on hand for preparation for these situations. To reduce the impact, thorough preparation and planning are essential.

The majority of Filipino workers especially the Philppine bpo industry are more than capable of working remotely, which is a plus. To ensure company continuity despite natural disasters, several BPO partners shifted to working from home.

In conclusion, Working with a BPO partner in the Philippines offers access to highly skilled workforce who are fluent in English, considerable cost savings, more scalability and flexibility, and lower danger of legal action. The drawbacks include bad weather, a volatile geopolitical climate, and dissatisfied customers.

A BPO partner in the Philippines is a sensible decision when all the aforementioned criteria are taken into account. Even if other multinational companies provide even lower prices, Western businesses prefer the higher quality of labor provided by the Filipino workers because it offers a superior price-to-skill ratio. The nation’s cultural compatibility and assured skilled workers might also be advantageous to you.

Think about the benefits and drawbacks of the location before picking an outsourcing service. Each hub has advantages and disadvantages. Selecting the ideal BPO supplier may be a fruitful decision that can boost your company’s growth.


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