A quick research of good offshore staffing countries will lead you to several articles pointing to the Philippines — a country from Southeast Asia known for being one of the top BPO (business process outsourcing) providers in the world.
The country has long been established as a key player in the outsourcing industry, along with India, Brazil, and Eastern Europe. However, as with all things, there are pros and cons of outsourcing to the Philippines, and we made a quick list to help you think it over
8 Advantages of Outsourcing to the Philippines
The Philippines is a reputable outsourcing destination renowned for its fluent English, skilled workforce, world-class outsourcing services, and thriving BPO sector. Below, let’s learn about the perks of outsourcing your business operations to the Philippines:
1. Above Average to Native-level English Proficiency
The first advantage of outsourcing to the Philippines is the country's English proficiency. One of the major concerns of some companies when it comes to offshore outsourcing is the language barrier. Luckily, unlike outsourcing to countries like Ukraine, China, or Thailand, you will hardly ever experience this with Filipinos.
According to the Education First English Proficiency Index (EFPI), the Philippines ranks 22nd globally and 2nd in Asia as the country with the highest English proficiency. So, if you are planning on outsourcing to the Philippines, it won’t be difficult at all to work and collaborate seamlessly.
You’ll have strong communicators who you can understand, have discussions with, and resolve issues with a lot easier than accents and other things language barriers may present.
2. Exceptional Understanding of Western Culture
Another benefit of outsourcing to the Philippines is that the country has a good understanding of Western culture. The US colonized the country for 48 years, from 1898 to 1946, before the US recognized the independence of the Philippines.
After that, some Americans chose to stay in the Philippines, while the country itself held strong ties with the US, which greatly influenced the culture of the Filipinos. This led to Filipinos adopting Western culture, including food, language, education, and religious freedom.
3. Strong and Highly Diverse Talent Pool
A diverse pool of talent is the third advantage of outsourcing to the Philippines. Philippine universities churn out thousands of highly capable workers yearly, leading to a large and diverse talent pool. Not just that, they are also more than qualified and capable of handling work for you.
Moreover, according to the Philippine Statistics Authority, the Philippines currently has a median age of 25.3 years. Hence, in terms of technological competency, the Philippines has an edge as it has a young population that is familiar and capable of understanding technology to streamline business operations.
4. Cost-effective Labor
Depending on which state you live in, the US has a higher cost of living — housing, utilities, healthcare, food, and taxes — compared to the Philippines. According to World Population Review, expenses among US households amount $61,334 USD per year. Meanwhile, Filipino households only spend $4,504.68 USD per year on expenses.
Let’s also not forget that the cost of hiring in the US averages $4,375 USD per hire, whereas you can hire a Filipino BPO employee for as low as $268.95 USD a month. Therefore, statistically, you will always have to pay more for local talent compared to an outsourced Filipino worker.
The reason behind this difference is the currency movement and current economic gains of the PHP being weak compared to the USD. At the time of writing, the exchange rate of PHP to USD is 57.28 PHP to 1 USD, making employment costs lower than in developed countries. For this reason, outsourcing to the Philippines is one of the top choices that businesses consider.
5. Security, Flexibility, and Scalability
The fifth advantage of outsourcing to the Philippines is the country's security, flexibility, and scalability. While you can technically DIY an offshore team, the most secure way to outsource to the Philippines is still through a company like KDCI Outsourcing.
KDCI Outsourcing (and other best BPO companies) work as your business partner, and hence are flexible in terms of developing effective, customized outsourcing solutions that work for you.
Outsourcing providers talk about your business, goals, and objectives and recommend the best course of action. On top of that, outsourcing allows you to scale your business without additional infrastructure costs. You have the freedom to expand your team and operations, depending on the type of work your business needs at the moment.
6. BPO Industry Supported By the Philippine Government
eLearning solutions like the Learning English Application for Pinoys (LEAP) help senior high school students and college students prepare to meet call center demands after graduation. There are also BPO employee-targeted training programs offered by the Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEERD).
Moreover, the IBPAP, an organization solely dedicated to improving the IT-BPM industry in the Philippines, focuses on innovation and getting government support for enabling the IT-BPM industry in the Philippines.IBPAP works to continuously further and maintain global competitiveness by getting the country to provide higher-value services.
The continuous government support for the BPO industry helps Filipinos remain efficient amid the AI and automation revolution. One of the objectives of multiple government initiatives is to elevate the proficiency of Filipino professionals, enabling companies outsourcing to the Philippines to flourish and expand.
7. Hard Work Is in Their Culture
The family-oriented culture of the Filipinos complements their hardworking attitude. They have an innate desire to support their families and give them a more comfortable life, which ultimately becomes their reason to work harder.
However, as a new generation of Gen Zs enters the Filipino workforce, the value of work-life balance also becomes essential. Hence, you might have to coax them into working overtime or working during weekends if you really need them to.
Businesses are not only getting the best out of outsourcing to the Philippines, but they are also able to provide opportunities to millions of Filipinos.
8. Fewer Management Tasks
By outsourcing to the Philippines, you can reduce the number of management tasks you need to handle, enabling you to concentrate on your core competencies and responsibilities more effectively. Choosing to partner with outsourcing providers like KDCI means you have an offshore human resources and management team that will help manage your team.
This means the outsourcing firm takes care of handling employee attendance, tax headaches, leave reporting, and many more. Additionally, while you have full control over your outsourced team, you can also choose to hire a project lead for training and team management.
All you have to do now is check on them from time to time, or read reports while you focus on other aspects of your business.
5 Disadvantages of Outsourcing to the Philippines
However, outsourcing to the Philippines comes with several risks. Let’s take a look at them below:
1. The Weather
On the other hand, one of the disadvantages of outsourcing to the Philippines is its changing weather conditions. The Philippines is a tropical archipelago resting just in the western side of the Pacific Ocean.
Every year, the country experiences an average of 20 typhoons that can cause power interruptions and cancellation of work and school in flood-prone areas within a typhoon’s path.
Moreover, being within the Pacific Ring of Fire means the Philippines experiences earthquakes and volcanic eruptions. On average, 100 to 150 earthquakes occur each year, and while the country has 24 active volcanoes, eruptions rarely occur.
Fortunately, Filipinos are more than capable of handling remote work. Some outsourcing companies, including KDCI, also provide the option to work from home to maintain business continuity in case of natural disasters.
2. Holidays
Compared to the US — which only has 11 official holidays — the Philippines has a total of 18 official non-working government and religious holidays. Thus, businesses planning on outsourcing to the Philippines may also want to consider this factor.
With the Philippine population being predominantly Christian, a lot of culturally important holidays are officially deemed holidays by the government.
However, employers are allowed to ask their employees to come to work. Hence, outsourcing providers leave this in our client’s discretion, as Philippine labor laws mandate that employees get paid more when they work during legal holidays.
3. Pro-employee Labor Code
Businesses that are planning on outsourcing to the Philippines should take note of the country's labor code. An employer cannot fire an employee at will in the Philippines. A justifiable cause and proper documentation are required to terminate any Philippine employee.
Termination of any employee also requires that the company provide the allocated severance pay. However, labor codes that favor employees do lead to significantly lower turnover rates.
4. 13th-month and 14th-month Pay
The Philippine labor code requires organizations in the Philippines to pay employees an additional 13th-month pay annually. This incremental month of payment is paid in December as a mandatory bonus to employees and is done to show concern for the plight of the Filipino working masses.
5. Bad Rep
Every country and race has stereotypes, and the Filipinos are no exception. Some foreign companies that planned to outsource to the Philippines and tried to DIY their offshore teams have had poor experiences with hiring Filipino talent.
Because of the DIY-ing, they were more prone to hiring a less capable demographic, which led to generalizations that Filipinos are lazy or incompetent. Hence, to avoid this experience, put your trust in the best offshore outsourcing companies so that you hire quality talent and have proper HR to take care of them.
When to Offshore Outsource to the Philippines
If you made it this far, you’re probably considering the Philippines as your potential offshore outsourcing destination. Here are three signs you need to outsource to the Philippines:
1. You Want Higher Cost Savings
The Philippines is a treasure trove of highly skilled professionals, many of whom excel in specialized roles. Since the country has lower labor costs, you gain access to their expertise without paying more for the same specialized professional in the US.
Essentially, Philippine outsourcing is the right balance of cost-effectiveness and high-caliber talent. Before partnering with a Philippine-based outsourcing partner, make sure you’re aware of the costs of outsourcing to the Philippines.
2. You Need Professionals With Strong English Skills
Filipinos show pride in their English skills. They can write in fluent, cohesive English and speak the language like a native. English is also integrated into the facets of Filipino life — from education to law. By partnering with a Philippine outsourcing company, you can seamlessly communicate and collaborate with your Filipino professionals.
3. You’ve Carefully Assessed the Pros and Cons of Outsourcing to the Philippines
Deciding to outsource work to the Philippines means you already know what you’re signing up for — that is, Filipino culture (the good and the bad), holidays, political climate, and the weather.
It’s understandable to be worried about the weather, as the Philippines is prone to typhoons and floods during the rainy season. Make it a habit to read the news, check weather forecasts, and touch base with your outsourced team members to show that you care about their safety.
Work With Filipino Professionals From KDCI Outsourcing
Bad traits aren’t exclusive to any country. However, with KDCI, our teams actively work towards turning our weaknesses into strengths and uphold the pros that are intrinsic in our work ethic.
This breeds a culture of reliability and professionalism with our partners who trust us to provide expertise in accounting and finance, creative production, customer support, e-commerce and retail, digital marketing, and software development and information technology (IT).
Our clients who took the leap to work with us now have their business operations up by high-performing KDCI teams who take their businesses further.
Contact us today to learn how you, too, can take your business further!
