Outsourcing to the PHILIPPINES: A Comprehensive Guide for Small Business Owners
The Philippines is one of the most popular outsourcing destinations in the world. The country has even earned the title of the world’s call center capital. Responsible for 13% of the global outsourcing market, the Philippines is notable in the business process outsourcing (BPO) industry with over 700 BPO companies scattered across the country.
Due to the continuous expansion and growth of the outsourcing industry, the Philippines have dedicated resources and infrastructures to help foreign companies achieve their business goals. Local outsourcing companies have also helped establish the Philippines’ reputation by helping Filipino workers learn the best practices in the industry.
Looking forward to outsourcing to the Philippines? Read more about the country and its outsourcing scene below.
Outsourcing Factors in the Philippines You Need to Consider
1. Data Security
With the country being home to many BPO companies, the government has undertaken steps to encourage the BPO industry to grow. As a result of this, there are policies and legislation to ensure that there are laws in place to protect foreign companies. One of which is the Philippines’ Data Privacy Act.
Companies choosing to outsource to the Philippines would rest easy knowing that their data is protected. There are safeguards in place to keep healthcare information, educational data, financial information, and other data secured.
2. English Proficiency
The Philippines is home to a diverse and talented workforce that is trained to support your business. The Filipino workforce is relatively young and is growing fast. They also boast a highly educated workforce with a literacy rate of 97.5%. In addition to this, Filipino students are taught English as a second language to help them be a part of the global workforce.
Language proficiency is crucial in outsourcing. Filipino students learn English from grade school up to college. Being proficient in English helps Filipino workers communicate with foreign companies. Of course, this also gives Filipinos an edge in the BPO sector where fast and efficient communication is essential.
3. 24/7 Coverage
Philippine-based outsourcing partners go the extra mile to support your business. The country is known for having companies that offer 24/7 coverage. Regardless of time zones, you will be assured that someone in your team can offer their support when needed.
Rotating shifts and weekend staff cover are standard and normalized in the Philippines. With the USA as the origin country of most clients, the Philippines often have people working on the night shift to cover the 12-hour time difference. Similarly, this could be arranged with other companies that favor 24/7 support.
Outsourcing your business functions to the Philippines provides cost savings. The low cost of living in the country makes it an outsourcing destination where you can cut expenses that are often directed toward operations and labor.
Fresh graduates earn a small amount compared to their counterparts in other countries. A Filipino worker’s daily wage is comparable to the hourly salary of an employee from the US or Europe. But despite the low cost, you will still have an efficient and high-quality service that will help your business in the long run.
5. Culture Fit
One of the less talked about outsourcing challenges is culture fit. With many outsourced partners coming from different countries with diverse backgrounds, cultural differences couldn’t be helped. Often, these differences can lead to conflicts and misunderstandings. Thus, cultural compatibility can be the key to a seamless outsourcing relationship.
The Philippines was formerly colonized by Spain, Japan, and the US. Because of this, the country continues to have touches of all these different cultures. Filipinos have a strong affinity for Western culture with shared cultural traits evident in everyday life. This also gives you a workforce that is highly adaptable to different foreign cultures.
Notable Industries in the Philippines
As previously mentioned, the English proficiency of Filipinos has made the country a leader in the BPO sector. BPO is one of the notable industries in the Philippines that has made large revenues and investments for the country. Another pillar of the Philippines is the inward remittance from overseas Filipino workers.
The Philippines is also largely known for its amazing sights. The tourism industry is always on the rise, especially now that the pandemic is largely over, and borders are more open. Yearly, the number of foreigners that visit the Philippines is increasing with islands like Boracay and Palawan as their target destinations.
Aside from those mentioned above, the major industries in the Philippines are:
- Electronic Assembly
- Food Manufacturing
Outsourcing Challenges in the Philippines
With its many advantages, the Philippines may look like a perfect outsourcing destination. But like many business endeavors, outsourcing to the Philippines may come with challenges. Potential business disruptions can happen. The location of the Philippines makes it prone to typhoons and floods. These natural calamities may disrupt day-to-day operations.
In terms of technological advancements, the Philippines are still behind many Asian countries. The current infrastructure is outdated and may affect business performance. But this problem is easily solved once you talk to your outsourcing partner. They could address these issues by updating their technologies for a more seamless outsourcing process.
The Philippines also has labor laws that could prove to be unfamiliar to foreign companies. Like other outsourcing ventures, you would have to familiarize yourself with local labor laws, minimum wages, 13th-month pay, and other benefits. Not complying with Filipino labor laws can lead to penalties so make sure to learn these before outsourcing to the Philippines.
Outsourcing in the Philippines
Outsourcing is a wise strategy for reducing business and operation costs. Choosing to do so in the Philippines could have more advantages such as their 24/7 coverage. You would also be outsourced to skilled Filipino employees that are proficient in English and are highly adaptable to diverse cultures. Most importantly, you can rest assured that your data is secured through laws and policies established in the country.
Once you have considered the advantages and disadvantages of outsourcing to the Philippines, it is time to look for your Filipino partners. Let us help you out with this! Book a FREE appointment with Outsource Asia experts today.