7 Reasons Why You Should Outsource to the Philippines (and How to Do It Successfully)
How to Outsource to the Philippines
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Companies of all sizes and across various industries are recognizing the benefits of outsourcing to the Philippines. The country provides access to a large pool of college-educated professionals while offering lower operational and labor costs.
Call center outsourcing in the Philippines started in 1992. By 1995, the government created the Philippine Economic Zone Authority (PEZA) under the Special Economic Zone Act.
This legislation offers tax breaks and other incentives to support the growth of the business process outsourcing (BPO) sector. Today, 25 years later, the BPO industry in the Philippines employs over a million people. This accounts for 27% of all new job opportunities.
The growing demand for dependable BPO services is driving the rapid expansion of call centers in the Philippines. From small businesses to large multinational corporations, organizations are seeing the advantages of outsourcing to the Philippines.
Additionally, outsourcing can streamline your operations and enhance customer service. Discover how outsourcing to the Philippines can help grow your business with this comprehensive guide.
Is Outsourcing to the Philippines the Right Choice For Your Business?
What is Outsourcing?
Outsourcing means hiring an outside company to handle certain tasks for your business. These tasks can be anything from customer support to back-office operations like data entry and IT support. Many businesses, especially in the U.S., outsource to countries where they can get high-quality services at a lower cost. One of the best countries for outsourcing is the Philippines.
Top Reasons Why You Should Outsource to the Philippines
The Philippines offers skilled workers at a lower cost than many other countries. By outsourcing to the Philippines, you can save a lot of money, and you can also work with a company that offers a lot of benefits.
Philippines outsourcing enhances these advantages while providing many additional benefits to your business. Explore the primary reasons why companies in the US, the UK, Australia, Canada, and Europe frequently outsource to the Philippines:
- High level of English proficiency
- College-educated workforce
- Stable industry with government support
- 24/7/365 availability
- Cost-effective outsourcing solutions
- Reduced legal liability
- A wide range of BPO services
India remains the largest provider of outsourcing services. However, the Philippines is quickly becoming the leader in BPO solutions. Twenty-one of the top 25 outsourced call center projects are handled by companies in the Philippines. TELUS, the largest telecommunications company in Canada, currently outsources 2,500 call center jobs to the Philippines.
1. High Level of English Proficiency
The Philippines is the third-largest English-speaking country in the world, making it easy to communicate with Filipino professionals. This high level of English proficiency ensures that businesses can interact smoothly with their outsourced teams, reducing misunderstandings and improving overall productivity.
2. College-Educated Workforce
The Philippines has a highly educated workforce. Many workers in the outsourcing industry hold college degrees, making them qualified for various professional roles. This level of education allows businesses to outsource complex tasks, knowing they are handled by skilled professionals.
3. Stable Industry with Government Support
The Philippine government actively supports the Business Process Outsourcing (BPO) industry. This includes offering tax incentives and other benefits to attract foreign companies. Such backing ensures that the outsourcing industry in the Philippines remains stable and reliable for the long term.
4. 24/7/365 Availability
Filipino outsourcing companies are known for their flexibility in providing round-the-clock services. With teams working in shifts, you can ensure your business is running smoothly at all hours, no matter where you’re located.
5. Cost-Effective Outsourcing Solutions
One of the main reasons companies outsource to the Philippines is the cost savings. Labor costs are significantly lower than in the U.S., allowing businesses to get high-quality work done at a fraction of the cost.
6. Reduced Legal Liability
When you outsource tasks to the Philippines, you also reduce some of the legal liabilities. The outsourcing company will be responsible for employment regulations, taxes, and benefits for their employees, which can significantly simplify operations for your business.
7. A Wide Range of BPO Services
The Philippines offers a wide range of services, including customer support, IT services, data entry, and even creative roles like content moderation and photo editing. This flexibility allows businesses to outsource various functions depending on their needs.
Cons of Outsourcing to the Philippines You Should Know
While outsourcing to the Philippines offers numerous advantages, it’s essential to understand the potential challenges:
Communication Issues
While most Filipinos speak excellent English, some nuances or accents can sometimes lead to communication barriers. These can be easily overcome with proper training and cultural integration.
Pro-Employee Labor Laws
The Philippines has strict labor laws designed to protect workers. While this is great for employees, it can sometimes make it harder for companies to terminate contracts or adjust workforce levels.
Weather Conditions
The Philippines is prone to typhoons and other natural disasters, which can disrupt operations. However, most BPO companies have disaster recovery plans in place to minimize downtime.
Timezone Difference
The significant time difference between the U.S. and the Philippines can be a challenge. However, many Filipino companies offer 24/7 service, ensuring that time zones don’t affect operations.
13th-Month and 14th-Month Pay
Employers in the Philippines are required to give a 13th-month salary to employees, and some companies also offer a 14th-month salary. While this might slightly increase costs, it ensures a happier, more motivated workforce.
How to Find an Outsourcing Company in the Philippines
Finding the right outsourcing partner is key to a successful outsourcing experience. Here’s a step-by-step guide:
Choose the Services You Want to Outsource
Identify which tasks or services you’d like to outsource, such as customer service, technical support, or data entry.
Set Your Business Goals for Outsourcing
Clearly outline what you want to achieve by outsourcing, whether it’s cost reduction, better customer service, or improved efficiency.
Book a Consultation with a BPO Company
Reach out to several BPO companies and schedule consultations to discuss your needs and goals.
Review the Proposal from the BPO Company
Examine each company’s proposal carefully. Look at the services offered, pricing, and how well they align with your business goals.
Allow the BPO Company to Recruit Employees
Once you’ve selected a BPO company, let them handle the recruitment process. They’ll find the right employees to meet your business needs.
Set a Start Date for Your New Outsourced Team
Work with your BPO partner to establish a timeline for when the team will begin working on your project.
How to Outsource Successfully in the Philippines
1. Determine What to Outsource and What to Keep Internally
Identify which tasks are best handled by an external team and which ones require in-house attention.
2. Set Your Outsourcing Goals
Make sure your goals are clear and measurable, whether it’s improving customer satisfaction or cutting costs.
3. Evaluate Your Current Processes and Infrastructure
Ensure your business is ready for outsourcing by reviewing your current processes and making any necessary adjustments.
4. Plan Offshore Team Management
Decide how you will manage your outsourced team. This includes communication tools, performance monitoring, and regular check-ins.
5. Identify Potential Roadblocks
Consider any challenges you may face, such as cultural differences or time zone issues, and plan for them.
6. Develop Vendor Selection Criteria
Decide what’s most important to you when selecting a vendor: experience, cost, communication, etc.
7. Identify Potential Vendors
Research vendors that meet your criteria and request proposals.
8. Review Proposals and Agreements Thoroughly
Carefully go through the vendor’s proposals and agreements to make sure they meet your needs and expectations.
9. Evaluate and Monitor Performance
Once your outsourcing team is up and running, regularly evaluate their performance to ensure they are meeting your goals.
What Type of Services Can You Outsource to the Philippines?
- Appointment Setting Services
- Technical Support Call Center
- Data Entry Services
- Live Chat Support
- Customer Support
- Help Desk
- Email Support
- E-commerce Support
- Content Moderation
- Social Media Support
- Photo Editing
- Back Office Support
How Much Does Outsourcing to the Philippines Cost?
Costs can vary depending on the services you need and the complexity of the work. However, outsourcing to the Philippines is significantly more affordable than hiring in-house staff in countries like the U.S., often resulting in savings of 50-70%.
Final Thoughts
Outsourcing to the Philippines can be a game-changer for businesses looking to cut costs, improve efficiency, and access a highly skilled workforce. With the right approach and partner, outsourcing can provide tremendous benefits. Follow the steps outlined above to ensure your outsourcing experience is successful.
FAQs
Why is the Philippines a top choice for outsourcing?
The Philippines offers a skilled, English-speaking workforce at affordable rates, along with government support for the BPO industry.
What services can I outsource to the Philippines?
You can outsource services like customer support, technical support, data entry, social media management, and more.
How do I choose an outsourcing company in the Philippines?
Look for companies with experience, good communication, and a proven track record. Review their proposals carefully before making a decision.
What challenges should I expect when outsourcing to the Philippines?
Potential challenges include communication issues, time zone differences, and legal obligations like 13th-month pay.
How can I ensure successful outsourcing?
Define your goals, choose the right vendor, and regularly monitor performance to ensure success.