how to start outsourcing to the Philippines

Outsourcing for Businesses

Outsourcing to the Philippines can be a beneficial move for your business. This process involves strategically using outside resources to perform processes traditionally assigned to in-house talent.

This practice allows business owners like to you have a competitive advantage over rivalling companies. It also gives you the opportunity to focus on your core services and competencies while a group of experienced service providers expertly handles other tasks.

Many companies often prefer to rely on talent outside of the company to handle tasks and functions regardless of the size of their operation. This includes:

  • Inbound customer service
  • Outbound telemarketing
  • Web design and development
  • Graphic design
  • SEO and online marketing
  • Back office and admin support
  • Accounting and human resources (HR) management
  • Marketing and sales support
  • Content creation, and more!

The Global Outsourcing Market

The global outsourcing industry has shown a steady stream of growth in the past few years. In 2018, Statista reported that the global outsourcing market amounted to USD85.6 billion. The revenue for business process outsourcing worldwide was recorded at USD23.6 billion.

Meanwhile that for information technology outsourcing was USD76.9 billion. A majority of the revenue came from the US, followed by Europe, and then by the Middle East and Africa.

While these numbers are marginally smaller than those from 2017, they still show that many companies feel inclined to outsource services.

This is particularly true for those in the e-commerce, banking and finance, healthcare education, and media and entertainment industries. This also suggests that outsourcing to the Philippines is a viable option for businesses worldwide.

The Philippines as an Outsourcing Destination

Today, the Philippines is recognized as one of the top outsourcing destinations in the world. It comes second to India according to Tholons Services Globalization Index 2018.

Furthermore, PayPal’s 2017 Global Freelancer Insights Report revealed that:

  • 60 percent of business owners who hire freelancers in the Philippines are from the United States
  • 29 percent are from Australia
  • 26 percent are from the United Kingdom and
  • 20 percent are from Canada

From what started as a single call center in 1992, the industry has grown exponentially in the last three decades. In 2016, the market was projected to generate work for 1.3 million individuals. It was also poised for an annual growth of 17 percent in the call center industry alone.

However, it is not just big companies who are benefiting from this industry in the Philippines. Factors such as improvements in internet speed, the rise of freelance platforms, and the advent of digital tools have opened up the Philippine freelance economy.

This continuously presents an opportunity for small to medium companies and even startup ventures from across the globe to access highly skilled Philippine-based freelancers.

Today, 2 percent of the population or around 1.5 million Filipinos are engaged in freelancing. This market segment is expected to grow further in the coming years as more digitally adept contractors enter the market.

This is because more people are seeking more freedom to work anywhere. More individuals are also are leaning towards flexible work schedules and are enticed by the possibility of gaining higher income. 

Top 9 Reasons Why Outsourcing to the Philippines is the Best Move for Your Business

outsourcing to the Philippines

The Philippines has a lot in store for companies who need to outsource some of their business processes without compromising the quality of work. Here are nine reasons why outsourcing to the Philippines could be the best move you can make to grow your company:

1. Economical option

Outsourcing to the Philippines is an economical way of getting the talent you need for certain tasks and functions. This is particularly helpful for small companies and startups.

You can hire freelancers from the Philippines for a fraction of the cost it will take to outsource locally. Filipino freelancers often charge up to 75 percent lower than their counterparts. So, if you own a small business, you don’t have to burn a hole in your coffers just to find high-quality services.

For example, an SEO specialist from the Philippines can charge as low as 500 USD a month for their services. Whereas an in-house service provider charges up to four times that amount. 

2. Access to diversified talent

The Philippines is a melting pot for a diverse range of talent every business can benefit from.

Regardless if you need help with data entry, customer support, research, web development, and design, marketing, SEO, social media marketing, or sales, you’re bound to find highly-skilled freelancers that fit the bill. This is particularly helpful for businesses who wish to build a pool of talent with diversified skills.

The human capital available in the Philippines is also highly educated. The country has a literacy rate of about 95 percent and each year, top universities and colleges produce thousands of globally competitive graduates.

There is human potential in the Philippines that you can tap in order to build your business. There over a million freelancers in the Philippines so the possibilities are practically endless when it comes to finding the talent you need.

3. Wide range of outsourcing services covered

The Philippine outsourcing industry covers a wide range of services. This includes call centers, IT services, SEO, online marketing, and virtual contractor services.

This fact ties in with the fact that the country possesses diverse talent that can help any business grow and develop faster.

4. Reduced legal liability and management issues

Business owners sometimes have to face legal liabilities because of inane lawsuits filed by in-house staff. The good news is that outsourcing to the Philippines can save you from this kind of trouble. By outsourcing to the Philippines, you are hiring them as contractors and not as employees.

5. Unbridled work ethics

Filipino contractors are known for their excellent work ethics, integrity, and loyalty. They are service-oriented, they display a high level of professionalism, and they are hard-working which means you can expect reliable service every time. 

6. Language proficiency

Freelancers in the Philippines have a strong command of the English language. This makes communication much more efficient and effective. English is one of the major languages spoken and written in the country. It is used as a medium of instruction in school alongside local languages based on the updated general curriculum.

What’s more, there are contractors who are proficient in other languages as well and you’ll be hard-pressed not to find a freelancer to suit your needs.

7. Flexibility in work hours

Call centers have been striving in the Philippines because Filipinos are known for their flexibility in terms of work hours. Outsourcing to the Philippines means getting access to contractors who can work around challenging schedules no matter where in the world their client is.

8. Cultural adaptiveness   

The country has had centuries of cultural influences from both the east and the west. This means contractors are often able to adapt culturally with ease. Freelancers from the Philippines are known for their ability to adapt to different business cultures and ways of doing things which sets them apart from their competitors from other outsourcing destinations.

9. Strong government support

The Philippine government recognizes outsourcing as a major contributor to the country’s economic growth. This is why several policies and legislation, as well as infrastructure support, have been put in place to support the industry.

Among these are partnerships with tertiary education institutions to create curricula that will foster the outsourcing industry. Call center training is also available through the Technical Education and Skills Development Authority. Moreover, tax and non-tax incentives for foreign investments.

Furthermore, the Philippines has legislated the Data Privacy Act while the Freelancers Protection Bill is currently filed in the Senate.

How to Outsource to the Philippines

The process of outsourcing intends to help business owners like you to lower operating costs, multiply productivity, and free up your schedule to focus on your core competencies.

As with any business decision, you need to implement strategies to effectively outsource to the Philippines. Here’s how you can start your outsourcing journey:

Determine what you should outsource

Depending on the industry you’re in, you can outsource tasks such as:

  • appointments, reservations, and logistics coordination
  • research
  • graphic design
  • payroll
  • conversion optimization
  • bookkeeping, and more

The simple truth is that there are aspects of your business that may be critical to your operations but do not necessarily play a role in your overall strategy. Performing these tasks by yourself or getting in-house staff to do them can be cumbersome and, to a certain extent, frustrating.

Therefore, outsourcing them is a better choice particularly because there are professionals who are trained and skilled to do these.

Know when to outsource

There’s a right time to outsource tasks and as a business owner, it’s up to you to determine when you should start doing so. Ask yourself these five questions:

  • Does your internal talent have the skill to perform the tasks you want to outsource?
  • Is the task a one-time need?
  • Is it cheaper to outsource?
  • Will outsourcing provide more value to your business?
  • Does the task pose a competitive advantage?

Start small

If you’re new to outsourcing, you might want to start finding a service provider for one-time or smaller tasks first until you get the hang of the process. You can start by finding someone who can write a short web copy or one small graphic. Doing helps in setting your expectations in the future. 

Find a reliable partner who can help you get started with outsourcing

Nowadays, finding the right contractor doesn’t have to be a daunting task. There are platforms like the FreeeUp Marketplace that can help you with finding pre-vetted freelancers who can suit your needs.

You may also seek recommendations from your business contacts who have experience with outsourcing professionals for their business.

Be descriptive

If you’re using a freelance platform to find the talent you need, it’s important to provide a detailed description of the project you need to outsource. Indicate deadlines and expectations together with information about the specific tools or software you need.

In doing so, you give freelancers a clear picture of what you need while reducing the risk of miscommunication and inaccurate assumptions

Set a budget

Think of outsourcing as part of your capital investment. You are investing in the skills of contractors.

In doing so, you can be free to do what you do best. With that in mind, it’s important to set a realistic budget when outsourcing to the Philippines.

Remember as well that there may be additional costs when using the services of a freelance platform. So you need to factor that into your budget on top of wages you need to pay.

Put everything in black and white

outsourcing to the Philippines

One of the trickier parts of outsourcing is communication. Sure, you can schedule Skype calls and phone calls with a freelancer but there are aspects of outsourcing that need to be written down.

Drawing up a contract will help you lay out the specifics of the project. This includes the services that will be provided by the contractor, the delivery schedule, and the payment for services.

Matters such as feedback, guidelines, and manuals also need to be put in writing. This helps avoid any potential confusion for you and for the contractor.

Start Outsourcing Now

Outsourcing to the Philippines lets you focus on delivering your core competencies without being hindered by tasks and functions that are best handled by someone more experienced. You can tap world-class talent to streamline time-consuming and resource-hungry tasks.

If you need help with services like e-commerce, Amazon, digital marketing, web development and design, customer service, and advertising, you can turn to FreeeUp to get access to freelancers possessing 85+ skillsets to match your needs.

You may schedule a call with our co-founder, Nathan Hirsch, for a free 30-minute consultation about how to start hiring with FreeeUp.