Are you a business owner who wants to expand your business but is also concerned about the recruitment and labor costs involved? Do you wish to have access to global talent and technology without spending too much money? In this age of digital transformation, more companies are considering hiring teams in neighboring countries as support to their onsite employees. Looking at the current size of the global BPO market, it is no longer a surprise that the idea of outsourcing is growing more and more popular.
While the industry can thrive in almost every country or region, there are specific countries that multinational companies prefer when outsourcing their business functions. Here are the six of the most common factors that business owners consider when choosing their outsourcing destination:
- Timezone Differences
- Technical Education Level
- English Proficiency (both oral and written)
- Experience with Complex Projects
- Cultural Diversity
- Technological Edge
A lapse in any of these factors could affect the company’s growth and may result in negative customer experiences and low satisfaction rates. To prevent this from happening, choosing the best country as your outsourcing destination is crucial.
In this article, we will give you the list of the top countries for outsourcing and the things that make them stand out among other countries in the globe.
The Top 7 Outsourcing Destinations in the World
1. The Philippines
Known as the world’s “BPO Capital” for more than a decade, the Philippines tops the list of the best outsourcing destinations that international companies prefer. International BPO companies such as Teleperformance, Sitel, and Accenture have great trust and confidence in the Filipino workforce. This shows that outsourcing and offshoring in the Philippines are worthwhile investments.
Why is the Philippines at the top of this list? Here are the reasons:
Excellent English Language Skills
Language barriers can become a problem when hiring teams overseas, but when you choose to outsource your non-core tasks with the help of a Filipino team, you could be at ease that there will be no miscommunication between your remote employees and your in-house team. How is this possible? Filipinos are known for their excellent English language skills. In fact, the Philippines ranked 18th in the global list of countries in terms of English proficiency, with an impressive rate of 98.18% last 2021.
Affordable Cost of Living
If cost reduction is your ultimate goal, the Philippines is a perfect choice indeed. Compared to Western countries, the Philippines is known for its affordable cost of living. Affordable cost of living also means lower salary rates and operational costs for companies, which makes the country a popular outsourcing destination for foreign investors.
The average salary for BPO workers in the Philippines is 20,426 pesos or 368.89 in USD.
Filipino Work Ethics
Filipino remote teams can guarantee every business with high-quality work and performance, in any field of expertise. Filipinos are known for being hardworking and resilient. They can handle challenging schedules and shifts, so you can rely on them to complete important tasks and meet crucial deadlines.
Cultural Compatibility
The rich and colorful history of the country helped make the people more open to other cultures. They also show respect for foreign cultures and practices, and they carry this value in their workplace. Cultural peculiarities can be a burden for some people, but Filipinos are good at getting to know people from other countries. They make good friends with them and learn from them.
Government Support
For any type of business to prosper, support from the state is crucial. The BPO industry in the Philippines is booming, thanks to the strong support that they get from government authorities. The government of the Philippines wants to keep the country’s reputation as an outsourcing hub. They also want to make sure that people know how important information and communication technology is.
In fact, there are four laws that support ICT in the country, so your Filipino workers can enjoy all the benefits that your company can provide. In addition to this, you can also contribute to the country’s economic growth and give Filipino workers and their families better quality of life.
2. India
With the world’s largest higher education system, India is a country that produces the best and most reputable professionals in the world. Hiring an offshore team based in India is a perfect way to start your outsourcing journey. Here are some of the things that make this South Asian country a perfect outsourcing destination for your business:
Highly Skilled Talent Pool
The country boasts an employment rate of 93.5% for software engineers and its revenue market is projected to reach US$7.72 billion this year. With this, more and more software development companies employ the services of Indian software developers and engineers.
Compared to neighboring countries, India developers offer cost-effective and high-quality custom software solutions. They also have the highest number of ISO-certified companies, so they guarantee the level of services based on updated standards and policies.
English Language Skills
India ranks second in the list of countries with the biggest English-speaking population, so your customers around the world do not need to worry about miscommunication and mistranslation. Indians speak decent and comprehensible English that fits professional settings, and dealing with foreign clients and partners will not be a problem for them.
Work and Business Values
Indians are known for their hard work and determination as well as their love for learning. It is no surprise that the most successful business leaders in many industries are from India. They are also known for their punctuality and respect for people’s time and overall wellbeing.
Time zone differences will not be an issue if your remote workers are based in India, because Indians are also trained to work under late shifts and schedules.
Average Salary
The average annual salary of BPO workers is 325,000 INR. The cost of living in India is estimated to be 68.3% less expensive than in the US. Entry level positions start at 220,831 INR while more experienced workers make up to 658,750 INR per year.
3. Poland
Located in Eastern Europe, Poland is one of the best software outsourcing countries in the globe. In addition to its progressive software development industry, this Eastern European country also excels in finance and accounting, making them a good choice for business software development and accounting services.
Interested in setting up a remote team of Polish developers? Here are some factors to consider:
Advanced Data Security
If your business is processing huge amounts of data and your primary concern is privacy and security, Poland tech companies comply with the General Data Protection Regulation (GDPR) for data security and IP protection.
You will be at ease that your company and client data will not be accessed by hackers and malware. The quality of services you offer will not be negatively affected.
High-Skilled Workers
Poland is acknowledged worldwide for the high number of high-skilled workers that they have. Their pool of talents consists of experienced IT professionals specializing in software development projects, web development, and PHP (Hypertext Preprocessor) programming outsourcing.
Stable Economy
Any company owner who wants to outsource or offshore his/her business processes should look for an outsourcing or offshoring destination with a stable economy. Poland’s economy is one of the countries in Eastern Europe with a resilient and diversified economy. Since 1991, the country has maintained a healthy GDP growth rate, with a minimal contraction of 2.7% during the pandemic.
4. Malaysia
Another Asian country on the list, Malaysia is quickly changing into a perfect outsourcing destination through the availability of local and foreign professionals and the competitiveness of its tech sector. Below are some of the factors that make Malaysia an ideal outsourcing and offshoring destination for any business:
Good English Proficiency
Malaysians are good English speakers. In fact, they ranked third on the English Proficiency Index for Asian countries in 2021 and maintained a high rating amongst 112 countries worldwide. This literacy rate allows them to perform a wide range of services which include customer service, content development, and other client-focused business processes.
Affordable Cost of Living
Despite being one of the most modernized South East Asian countries, Malaysia has a relatively low cost of living. This also means that the average salary for Malaysian outsourcing companies is also lower than American countries or European countries.
The average salary of a call center representative in Malaysia is RM 2,603 which is equivalent to 586.26 in USD.
5. Argentina
This South American country is also known worldwide as a front-runner in Latin America’s IT industry. Argentines specialize in tech stack creation, software development, and other IT-related services. MercadoLibre and Globant are just two of the most established tech companies in Argentina that house several global companies.
Planning to have access to outsourcing services in Argentina? Here are the things that make the country an ideal outsourcing hub:
Lower Hiring Costs
Hiring the most experienced and qualified IT professionals in Argentina will only cost you an average of 1,183.04 USD per developer per month. This is a thousand dollars cheaper than US and UK rates, which will cost you an average of 6,543.39 USD.
Hiring Argentine developers for Python, Java, C++, and other programming languages can save you up to 6,000 USD. You can use these savings to fund other core activities that will help in lead generation and drive more sales.
The average salary of customer service and call center representatives in Argentina starts at 45,200 ARS or 427.82 USD.
Top Professionals
Argentines value the quality of their higher education system and most colleges and universities in the country specialize in engineering, law, and business courses. You can just sit back, relax, and have the best engineers, legal management specialists, and business development experts handle your back-office tasks to increase brand awareness and widen your target market while your onsite team focuses on revenue-generating tasks.
6. Mexico
Ranking 8th in Tholons Top 20 Digital Nations in 2021, Mexico went through major digital transformation, which makes it one of the best outsourcing destinations in Latin America.
If you are planning to hire a Mexican outsourcing team for a short-term project or even for long-term contracts, below are some things to consider:
Employee Retention Rate
Unlike other countries in North America and South America, Mexico is just starting to plant its roots in the global outsourcing and offshoring industry. This makes the country less exposed to the global market and competition. These scenarios result in low attrition rates for Mexican BPO companies, which is a good indicator of a solid and stable outsourcing company and processes.
Time Zone Similarities
Differences in time zones is a common issue when hiring outsourcing providers based in international territories. With the country’s proximity to the US, outsourcing business processes will be smoother. If you own a company that sells products, hiring the services of Mexican outsourcing companies for manufacturing can save you more time and money. You can also schedule regular site visits to make sure that your remote team is working according to your company’s standards. The quality of your products will not be compromised.
Lower Wages
BPO employees working as call center representatives earn 22,800 MXN per month (USD 1140.84). This is a lot of dollars lower than the salary rates of US-based agents who receive $5,500 per month.
7. Brazil
This Latin American country is known for its well-developed infrastructure and large pool of talent in business processes and software development services. If you are seeing Brazil as a potential outsourcing destination for your business processes, these factors can help you decide:
Laws that Support Outsourcing
With Brazil’s 2017 outsourcing regulations, the government has given its full support to the outsourcing industry. The regulations allow companies to hire outsourced employees to perform the company’s core activities, apart from non-core operations.
This can give you the authority to hire Brazilian professionals to work on the primary functions of your company.
Modernized Digital Infrastructure
In recent years, Brazil has expanded its digital infrastructure to give way to a more modern business operations and welcome more foreign investments. Currently, the country has over 90 technology parks and more than 35 business accelerators.
The technology parks are equipped with the latest technologies and house some of the most established international companies and offshore development teams.
Fair Wages
Compared to the salary range of US-based BPO employees, Brazil’s salary range for customer service and call center representatives is relatively low. Entry-level positions pay a minimum of 1,610 BRL (312.48 USD) per month. While jobs requiring more technical knowledge and experience pay like software specialists and engineers start at 10,500 BRL or 2,037.89 USD per month.
Frequently Asked Questions
What is the most outsourced service globally?
Outsourced services vary depending on the type and the size of business. For small businesses or startup companies, these are the top 3 most outsourced functions:
- Web Design and Development
- Information Technology
- Customer Service Call Center
Larger companies, on the other hand, usually outsource the following services:
Which country offers the cheapest rates for call center outsourcing?
India and the Philippines offer the lowest rates for call center outsourcing.
What are some tips for finding a reliable outsourcing partner?
In finding the best partner for outsourcing, consider these tips:
- Look for companies with an impressive and reputable track record in BPO. Create a shortlist, then make fair comparisons.
- Don’t overestimate and underestimate your budget. Always prepare for the necessary adjustments just in case your company needs additional services.
- Find companies that hire staff with good English skills and technical skills as well.
- Always discuss your concerns about cultural differences. Make a guideline if possible.
- Set expectations for the outsourced team. Don’t be too lenient or too strict; set attainable deadlines.
- Get involved in the selection process to assess the needed technical expertise for each role.
- Consult a legal expert about company policies and regulations and be mindful about foreign outsourcing laws as well.
Which are the best countries for outsourcing software development?
Some of the top destinations for outsourcing software development in 2024 include India, Poland, and The Philippines. These countries have a robust outsourcing market, deep technical expertise, and offer good value for money.
How do I choose the best country to outsource my work?
When choosing the right outsourcing location for your needs, several factors come into play: the expertise and talent pool of the country, the economic stability, language proficiency level, time zone differences, and culture. Also, consider previous outsourcing experiences in that country. Take into account the top 50 digital nations ranking, which can give you some insight into the best countries for outsourcing.
How does the population impact the ranking of best countries for outsourcing?
Countries with larger populations often have a larger talent pool to choose from. This gives them an advantage as they can offer a wider range of services. That’s why countries like India and The Philippines, with one of the largest English-speaking populations in the world, are on the list of top countries for outsourcing.
Does the cost of outsourcing services vary from country to country?
Yes, the cost of outsourcing services varies significantly from one country to another. However, while cost is an important factor in choosing an outsourcing destination, it should not be the only consideration. Quality, reliability, professionalism, communication and relevant experiences should also play a significant role in the decision-making process.
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