Good food, friendly citizens, rich culture and tradition, wonders of the world. Much has been said to describe the Philippines, and some people think the archipelago is just about natural spots and Instagram-worthy gastro-tourism.
The country is slowly adapting to the latest trends in technology and artificial intelligence. So it’s no longer surprising to see BPO companies’ headquarters and towering buildings on the streets and avenues of the country’s cities and provinces.
Based on the October 2022 report, the BPO, IT, and business services industry ranked fifth in the list of the biggest industries in the Philippines.
There are over 700 BPO companies in the archipelago, and these figures show the industry’s impact on local employment and career opportunities. Undeniably, the outsourcing industry plays an important role in the economy. In fact, outsourcing companies are said to add as much as $30 billion to the Philippine economy. The BPO sector remains strong even during the height of the pandemic that affected millions of people and businesses in the world.
With this, you may be wondering why the Philippines is among the most popular outsourcing places for foreign companies and international business owners to consider. Continue reading to learn what makes the Filipino workforce standout in the outsourcing sector.
What is outsourcing?
Outsourcing is the process of hiring a third-party service provider to help a company perform non-core business functions. This can be done while an in-house team focuses on core business functions to generate revenue and leads.
While most companies only outsource specific tasks, bigger companies do outsource entire business operations. This is a common practice for food and retail businesses that outsource entire business processes from manufacturing, to quality control, and production.
Why do companies outsource?
Most of the time, companies outsource a business process when its in-house employees can no longer keep up with the demand of their customers. Peak seasons like holidays can result in service delays, and delays are never beneficial to any type of business. Here are some major benefits of outsourcing that motivate company owners to outsource business operations:
Outsourcing can reduce business costs.
Many companies outsource to save money through reduced labor costs, budget allocation for recruitment, operational costs, and other overhead costs.
A survey found out that outsourcing external services assigned to one or more tasks can help your business save up to 70% in labor costs.
Moreover, outsourcing services from overseas companies is considered cheaper due to lower cost of living, taxes, and wages. Many businesses choose to offshore some of their functions and tasks so that they can focus on their core business activities and reduce costs.
Outsourcing increases efficiency.
Outsourcing allows your core team to focus on the major job functions that carry your business. You will no longer have to worry about choosing the best talent pool to make sure that goals are met.
Once you set a target along with a specific time frame, external agencies will be responsible in the selection process. To ensure quality results, you need to check it on a regular basis.
Outsourcing gives you affordable access to technology.
Work is almost always finished on time since your external service provider has updated and close access to technology. BPO companies invest in project management and accounting tools and software to provide you with the best services that will benefit your business.
Outsourcing gives you access to global talent and expertise.
Outsourcing certain business functions and tasks may require specific levels of expertise and competence and this is what outsourcing agencies do best. BPO companies are known for conducting intensive training programs for new employees who wish to work in customer service, technical support, sales, and marketing.
Outsourcing companies train agents in customer service best practices, language, and call center etiquette to make sure the right people are doing the right things. By outsourcing your business operations, you can gain access to staff with different skill sets and specialized skills needed to perform technical tasks.
Outsourcing helps you scale your business.
Do you have plans to grow your business? Then you can make the most out of one of the main advantages of outsourcing, which is scalability. This means that businesses can scale up or down their use of outsourced services as needed, without having to make a long-term commitment.
Set limits on the number of full-time employees that you want to keep in your internal team and find reputable freelancers to do seasonal jobs. This flexibility can be a major cost-saving measure, as businesses only pay for what they use when they use it.
Why outsource to the Philippines? Here are the top reasons.
1. Cost Savings
Just like outsourcing business activities, companies that offshore their operations and services also enjoy the cost benefits that service providers offer. International companies invest in outsourcing and offshoring their services to cut labor costs and make the company more scalable.
In offshoring, your service provider will be in charge of hiring agents who will be working in your offshore team. The recruitment, hiring process, and training costs in the Philippines are more affordable. This is because of the lower cost of living in the country compared to other countries. A lower cost of living also means lower average salaries and bigger funds to buy new equipment. It is essential for your in-house teams to use advanced technology and equipment, and have extra funds to monitor projects.
You get to serve your clients and connect with them 24/7 without paying so much. Offshoring call centers in the Philippines only costs $6 to $14 per hour.
| Country / Region | Cost per hour |
| United States / Canada | $22 – $40 |
| Western Europe | $42 up |
| Eastern Europe | $12 – $25 |
| Australia | $35 – $50 |
| Africa / Middle East | $16 – $20 |
| Latin America | $8 – $20 |
| Asia / Philippines | $6 – $14 |
| India | $5 – $12 |
| Pakistan | $6 to $12 |
There are many countries in Asia Pacific that offer affordable offshoring rates. But this gem in Southeast Asia is the perfect place for your business to set up shop.
2. English Language Skills
Worried about communication and language barriers with your customers, but also want to save money? The Philippines is the perfect place to work. Aside from the low cost of labor, every talent pool in the Philippines is made of staff with superb communication skills in English.
Since Philippine provinces were once colonized, each province in the archipelago speaks several official languages and dialects, with English being one of their known expertise. Cebu City is one of the many cities in the country where natives are good English speakers.
Filipino talent is highly sought after in the outsourcing market. You can rely on them for customer interactions, easing any concerns you may have.
3. Cross-Cultural Teams? No problem!
Cultural compatibility is an important part of business offshoring and outsourcing and if you choose to offshore in the Philippines, this is not a problem. Filipino people in BPO companies are known to be competitive yet friendly, so effort and camaraderie go well together. It is a part of the Filipino culture to be accommodating and respectful of foreigners and western cultures. Your in-house team will have no problem working with your remote team.
This amazing work ethic helped Filipino teams have productive, meaningful, and long-lasting relationships with their clients.
4. High Productivity Rates
Filipinos are hard workers, and fast-paced companies need productive individuals to form a solid team. Filipino teams have an excellent track record in working under pressure and challenging conditions. They don’t mind interacting with a wider talent pool to get the job done.
In addition to these, Filipinos always exceed expectations in working on projects and resolving concerns of clients. Lastly, Filipino workers are known to be resilient and capable of working under flexible time shifts and schedules. This brings us to the next reason.
5. Flexibility
If your business operates in western countries and regions, it is a must to have a reliable team that can perform different tasks 24/7. Even in service crew positions in fast food restaurants, staff work in the morning, afternoon, and even late in the evening, working in rotating shifts. You can expect the same thing when outsourcing your business tasks.
Filipinos can work in different time zones without compromising the quality of their outputs. With this, foreign companies are seeking the help of Philippine outsourcing companies in forming cross-cultural teams with experience in customer service.
Filipinos are also good at maintaining work-life balance and keeping a positive atmosphere in their workplace and everyday life.
6. Customer Service
Friendly, warm, and hospitable. These are just three things that you could think of when the Philippines is mentioned.
Filipinos are known for their amazing work ethic focusing on empathy and respect. They make good agents and customer service professionals.
Filipinos are the ideal choice for a remote team that can offer high-quality service and develop important relationships with customers and colleagues.
7. Skills
Filipino teams in the BPO industry are made of top-caliber talents. And when we talk about top-caliber talents, Filipinos are not limited to English proficiency and communicating in official languages and dialects. Companies like Accenture and Digital Minds BPO hire the best skilled agents and project managers with adept knowledge in different fields. Expect high-quality output and increased satisfaction rates with the help of a Filipino outsourcing workforce.
They also recruit experienced professionals in different categories of industries. They hire experts from banking institutions to work on financial services and payroll services. For IT-related services, they source employees from reputable tech companies.
With a relatively low cost of labor and training, you can optimize your business operations with the help of your offshore staff.
In fact, you can set your own selection and recruitment rules before you sign a contract so that you can ensure that your skills and service standards are followed.
8. 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 you can be sure that all the benefits that your company can provide will be enjoyed by your Filipino workers. 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.
9. Economic Resilience
While hundreds and thousands of businesses in the Philippines closed during the surge of the Covid-19 pandemic, call center workers remained untouchable.
Because of their strong work ethic and culture, Filipino BPO employees are always given many different work options, even during health emergencies and natural disasters. They also enjoy government tax benefits that allow them to save money and perform their duties in the safest way possible.
The Filipino government makes sure that BPO workers are given complete health benefits and incentives. With this, they can offer quality services to foreign customers even from the comfort of their own homes.
10. Infrastructure and Technology
The capital city of the Philippines, Manila, is the most industrialized area in the country. It is a center of foreign investments and job opportunities.
This means that apart from a talented workforce, you can guarantee professional services delivered with the aid of latest technology and AI. Your offshore team will also be given a comfortable workplace in a well-equipped office in the country.
Don’t worry about starting your offshore team from scratch: in the Philippines, it is easier to hire teams and get the best office spaces.
What services can you outsource to the Philippines?
From basic tasks to complex tasks, outsourcing can help you save costs and strengthen the core activities of your company.
Here are some of the most common tasks that business owners and foreign investors outsource in the Philippines:
- Specialized IT services
- Drafting and estimation
- Accounting and bookkeeping
- Digital marketing
- Data entry
- Virtual assistance / admin services
- Graphic design
- Back Office Support
- Human resource management (a Filipino HR is a good HR!)
- Recruitment
- Customer service
How much is the annual salary of a BPO professional in the Philippines?
The average annual salary of BPO workers in the Philippines is 183,000 pesos.
Average salaries vary depending on the location and minimum wage policies mandated by the local government. Major business cities can offer higher salary packages and benefits.
What industry outsources their activities the most?
Accounting is the industry that outsources their activities and business operations the most.
Foreign businesses usually tap the help of business process outsourcing companies in the Philippines to perform accounting tasks during and beyond their business hours. Accounting services usually involve bookkeeping, payroll, cash flow management, etc.
What are the different types of outsourcing?
There are two factors that you must consider before deciding to outsource: location and type of service.
Here are 11 types of outsourcing that you might want to consider based on the specific business functions that you want to outsource:
- Business Process Outsourcing (BPO)
- IT Outsourcing
- Professional Outsourcing
- Project Outsourcing
- Process-Specific Outsourcing
- Manufacturing Outsourcing
- Multisourcing
- Operational Outsourcing
- Offshore Outsourcing
- Nearshore Outsourcing
- Onshoring or Local Outsourcing
Read this blog to see how each type can help your in-house employees focus on high-value tasks. You can also discover how your internal resources can be managed by an external provider.
Furthermore, outsourcing services may also vary per location:
Offshoring
The most common type of outsourcing is known as “offshoring.” This is when a business contract with another company in another country to have work done. The most common example of offshore operations is when businesses outsource work to countries like India, China, and the Philippines.
For example, a company might outsource its customer service to a call center in the Philippines. Or, a clothing company might manufacture its products in China.
The main advantage of offshoring is that it can save businesses a lot of money. This is because labor costs are often much lower in other countries than they are in the United States.
Nearshoring
Another type of outsourcing arrangement is known as “nearshoring.” This is similar to offshoring, but instead of working with a company from another country, a company from a close-by country is hired.
This is often done to reduce shipping costs and time. For example, a company in the United States might contract with a company in Mexico to have work done.
Onshoring
The last type of outsourcing arrangement is known as “onshoring.” This is when a business contracts with another company or individual within the same country.
This is often done when a company wants to contract with another company that specializes in a certain type of work. For example, a company might contract with an IT company to manage its computer systems.
Find Your Niche in the Global Market with Digital Minds BPO.
If you are looking for an outsourcing partner in the Philippines that can help you reach more customers and grow your business, choose Digital Minds BPO. We can be your partner to success. Our services can help you save costs, and carve your competitive niche in the industry. With hardworking and dedicated teams, you can deliver personalized and prompt services to your existing and potential clients.
Digital Minds BPO is an all-Filipino company with experienced teams of agents and professionals. Our innovative mindset is perfect for your company’s digital transformation. This, and our optimistic approach to challenging projects, can help you streamline your business operations.
Request a quote now and get ready to find your niche in the global market.
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