Why Businesses Prefer Outsourcing to the Philippines

Some people respond to the question why businesses prefer outsourcing to the Philippines with, “Because labor cost is low.” The follow-up comment would be, “But it’s not a good idea because penny wise is pound foolish.” Although this may be the outlook some still have about international outsourcing, they are increasingly in the minority.

A $262 billion prediction for outsourcing in 2020 is proof enough outsourcing plays a major role in businesses today.

Where India was the main outsourcing country for call centers, the Philippines has taken over. Outsourcing is fast becoming the country’s main revenue source. The call center industry alone is responsible for 10% of the economy of the Philippines.

So, why does the Philippines stand out as the international outsourcing choice for many businesses? Three words—Time, Money, Skills.

Time

Freeing Up YOUR Time

For the business to run smoothly, there are different levels of importance and urgency linked to tasks. Some tasks may seem mundane and unimportant; yet, these tasks help turn the wheels of the business.

These non-urgent and low priority tasks cost YOU time and money. The time spent on data capturing, writing an email, making a phone call, and all that is the time you could’ve spent on income-generating activities.

The key to outsourcing is to delegate. The moment you delegate these tasks, you free up time for important tasks – tasks only you can do as the leader, the CEO, the boss of the business — essential, high priority tasks.

Outsourcing to the Philippines allows you to spend your abilities and skills on the tasks for your level of expertise. By outsourcing, you delegate other tasks that are low on your priority list but need to be done.

24-Hour Business with Time Zones

How often have you said, “There’s just not enough time in the day to accomplish everything? If only I had more hours in the day…”

You can have extra hours in the day by making use of time zones.

The time difference is one of the major reasons businesses prefer outsourcing to the Philippines. Depending on where you are in the U.S., the time difference varies between 12-16 hours. In other words, while you sleep, your business is making a profit. Tasks are being completed remotely in the Philippines.

This allows you to start your business-day effectively without wasting time. You can continue and build on the work done during the night. Data was captured, orders processed, products distributed, and global clients served.

Your decision to outsource can potentially double your business capacity overnight. You’ve also increased the quality of service provided to clients. Now your business responds to customers’ queries and concerns globally, night and day.

By outsourcing to a time zone opposite to the United States, you are effectively running a 24-hour business.

Money

Economical Outsourcing

Money is the oil that makes the wheels of your business turn. As your business grows, your profit increases, but so do the costs.

The cost of living in the Philippines is by far more economical than in the United States. There is a 154% difference in rent and consumer prices. Your grocery bill could be 118% less. The equivalent of $1 is about 45-50 Philippine Pesos.

The average salary for a Filipino call center agent is about $4,500 per year. The same call center agent will earn around $29,700 per year in the United States.

Outsourcing to the Philippines is a good economical choice for both parties—for your business and for the recipient. Money-wise, it makes more sense to outsource to the Philippines than to use local outsourcing.

Economically, it makes sense for the Philippines, too. With the growth of the outsourcing industry, Filipinos’ quality of life has improved. Instead of leaving loved ones behind to find work in other countries, there is now ample work opportunity at home. Remote work has opened doors for many Filipinos.

Skills

English Language and Culture Adaptiveness

The Philippines has more in common with the United States than most people realize. From 1898 to 1946, the United States occupied the Philippines. During this 50-year period of occupation, the United States impacted the Philippines in terms of introducing new opportunities for education, including, of course, the language. Most school textbooks are now in English as a result.

The United States also sent 540 qualified teachers to the Philippines and Philippine scholars went to America. American English was taught. The accent is American for the most part, which makes it easier for communication and language-dependent assignments.

Today, English is one of the 2 official languages in the Philippines. The national language is Filipino, but the language of government and education is English.

The language barrier is barely visible when outsourcing to the Philippines. At least half of the population speak English. Therefore, communicating when outsourcing isn’t a problem. Secondly, it’s possible to outsource English vocal and written assignments. With the expansion of project types in the outsourcing industry, the ability of Filipinos to write in English has become a major benefit. Hence the attraction to hire Philippine virtual assistants.  Fluency in English allows for more complex tasks and the ability to negotiate or discuss business matters.

This combination of Eastern and Western culture, furthermore, make Filipinos adaptive to any type of business culture. The ability to adapt to the client’s way of doing things is a major benefit to businesses and workers alike. Many Eastern countries can’t adapt so easily to Western culture, and vice versa.

Hard Working Skilled Talent

In addition to being able to speak English, Filipinos are skilled. The literacy rate is 95% in the country. About 500,000 graduates from universities join the job market yearly.

Business Process Outsourcing (BPO) is a lucrative career in the Philippines. Filipinos covet BPO contracts. It is no longer the last resort when looking for a job. The outsourcing industry is supported by the government. BPO skills are also taught at the university level to promote a career in outsourcing.

With time differences being common, Filipinos are flexible and easily adapt to working unusual hours. They work hard, are loyal, service-oriented, and work with integrity. Businesses can therefore safely outsource to the Philippines.

The average age in the Philippines is 23 years. This means Filipinos are a nation of adaptable youth who grew up with technology. Their familiarity with technology, proficiency in the English language, and their skills are beneficial to any business who outsource.

Outsourcing to the Philippines is a Winning Strategy

Call centers, internet marketing, IT services, and virtual assistants are commonly outsourced. The Filipino market offers skilled and experienced workers in these popular areas.

Taking into consideration:

• that the country speaks English,
• the economic sense of outsourcing to a country with low cost of living,
• the highly skilled and experienced workforce,
• and support from the government for the outsourcing industry,

it is understandable why the Philippines is one of the top 10 international countries that businesses outsource to.

Knowledge process outsourcing (KPO) to the Philippines is a trend to look out for in 2018. Outsourcing high-level tasks that require skilled professionals will increase. No longer is outsourcing restricted to low-level tasks.

What trends are you planning to follow in 2018? Is the Philippines on your list of countries to outsource to? Will your business contribute to the estimated 7 million outsourcing projects this year? What are your plans for outsourcing? Get those jotted down to help you plan for making smart hiring decisions.

Do you need help with your outsourcing strategy? Contact Freeup to talk about your hiring needs.

Retha Groenewald is a web copywriter and published author. Her versatile background gives her the freedom to write for the B2B and B2C market. Her writing is featured at Christian Web Copywriter and at Writing That Breathes Life.