For many years, outsourcing has been a significant source of savings for large and small companies. Historically, outsourcing may have required lengthy contract negotiations with foreign businesses and specialized employees willing to scope out new talent and recruit them from abroad. With the rise of the internet and easy communication from around the globe, that isn’t the case anymore.
With just a few clicks, even small businesses and individually-owned stores can outsource critical business processes to the Philippines for a fraction of the cost of in-house services. The Philippines is one of the largest business process outsourcing (BPO) markets in the world economy and provides services in both back-end office support and client-facing roles. Because of the various services offered, any company can find a position to be filled that would optimize its business process. Here are the top four drivers of outsourcing to the Philippines.
1) Cost
As with all things in business and commerce, the astronomically low cost of services is the primary reason many foreign companies choose BPOs in the Philippines. It’s commonly known that hiring foreign workers is a great way to keep costs low. Lower wages are a large part of why services cost less in the Philippines, with the average skilled worker costing only USD 40 daily.
This is almost double the minimum wage in the Philippines, attracting highly skilled workers for a competitive salary while still incredibly cost-efficient for Western companies, who may have to pay in-house workers almost three times that rate. But that’s only half the story. Many US, UK, Canada, and Australia workers have access to pension plans, 401ks, health insurance packages, and paid time off – all things companies won’t need to worry about with BPO workers.
2) Cross-cultural competency
One valid concern that companies have is the ability of foreign workers to communicate effectively with clients in the Western world. This goes beyond being able to speak English. However, there is no problem with the work in call centers in the Philippines – all educated Filipinos learn English from childhood due to the country’s history as a US colony. Workers must also understand the nuances of Western culture, mannerisms, and colloquialisms. With its strong hospitality sector and the Philippines’ ties to the United States, clients find call center workers respectful, conversational, and easy to understand. And because contact centers in the Philippines recruit well-educated college graduates, many have taken multiple courses to learn how to speak to Western clients.
3) Government support
Government buy-in is an extremely important aspect of any large economic sector – the. The more a government invests and supports an industry, the less legislative red tape there is to navigate for businesses. This is the case for the Philippines, which has largely deregulated this industry, allowing foreign companies to navigate contracting BPO work easily. Moreover, government-funded higher education institutions focus on creating a talented, sustainable BPO workforce. This brings us to our next point.
4) An educated workforce
The University of the Philippines, the country’s national university, provides comprehensive BPO degrees to interested students ready to join an industry with highly sought-after white-collar careers. Private universities such as La Salle have also started taking part. The country has begun a larger initiative across many higher education institutions to ensure some form of business management training. Moreover, BPO companies in the Philippines encourage employees to continue their training and education by investing in training programs and paying employees to return to school.
With so many benefits to pursuing outsourcing in the Philippines, it’s easy to see why companies and workers in the Philippines alike are pivoting to this industry. With competitive salaries for locals low,-cost services for foreign companies, a well-educated and culturally competent workforce, and government support, there’s no question that the BPO industry will continue to grow rapidly.
