Exploring the Issues of Offshoring to the Philippines

Posted on:
March 30, 2023
10
min read
Table of Contents
1
What are the benefits of outsourcing to developing countries?
2
What are the challenges of outsourcing to developing countries?
3
Top 5 Most In-demand Developing Countries for Outsourcing
4
What are some successful examples of companies that have outsourced to developing countries?
5
What are the best practices for outsourcing to developing countries?
Exploring the Issues of Offshoring to the Philippines
KDCI Outsourcing
September 6, 2023

Offshoring staff to the Philippines, and other developing countries is a good way to solve your staffing issues while still being able to enjoy high-quality work and up to 70% reduction in operation costs.However, offshoring staff, especially to developing countries, isn't always a smooth and easy process. Along with its benefits, it also comes with a number of challenges that you need to resolve if you want to ensure efficient staff performance. What are these challenges, and how can you overcome them? Read further to find out!

Why Is the Philippines Famous for Offshore Outsourcing?

There are many things that make the Philippines famous for offshore outsourcing. Below are some of the most common reasons.

Excellent English Proficiency

Offshoring staff to the Philippines is famous because of the excellent level of English proficiency that Filipino workers have. So, working with Filipino workers will be easy since they can communicate with clients from English-speaking countries. This has made the country a famous destination for offshoring services such as customer support, digital marketing, and back-office operations.

Cost-Effectiveness

The Philippines has lower labor costs compared to developed countries like the United States and the United Kingdom. But how much companies are able to save by offshoring staff to the Philippines? Companies can expect to cut their operation costs by up to 70% when they hire offshore staff from the Philippines, making for a cost-effective solution for businesses looking to save on labor costs without sacrificing quality.

Government Support

The Philippine government has implemented policies and initiatives to promote and support the offshoring industry. This includes tax incentives, streamlined business registration processes, and the establishment of special economic zones.

Cultural Compatibility

The Philippine culture is heavily influenced by Western culture, particularly American culture, so there are little to no cultural barriers when it comes to professional environments. This means that the company can rest assured that the offshore Filipino workers understand the business practices and communication styles of clients from Western countries, making the country one of the best offshoring staff destination for businesses.

High Availability of Skilled Workers

The Philippines has a large pool of skilled workers, particularly in the fields of information technology, accounting, and healthcare, ideal for offshoring staff. Many universities in the country also offer courses that are relevant to the outsourcing industry.

philippines offshoring offce

What Does It Mean to Offshore Staff?

Offshoring staff refers to the practice of hiring employees from a foreign country to work for a company based in another country. In this arrangement, the staff are located in a different geographical location than the company, and they may work remotely or in a dedicated office space.Don’t confuse offshoring with outsourcing. Learn the differences of the two approaches here.The main reason why companies prefer offshoring staff is to take advantage of the cost savings associated with working with talents from countries with lower labor costs. Moreover, it can provide a range of services, including customer service, software development, data entry, and accounting, some of which can be hard to find locally.Offshoring staff can provide benefits to both the company and the offshore staff. Companies can access a wider pool of talent and reduce labor costs, while offshoring staff can access better job opportunities and higher pay than they might have available in their home countries.However, the approach of offshoring staff can also present some challenges for both the company and the offshore staff. Companies that are looking into offshoring their staffing needs should carefully consider the potential benefits and drawbacks to make the most out of the setup. Developing effective management strategies is also necessary.

What Are the Challenges When Offshoring to the Philippines?

Offshoring staff to the Philippines can present several challenges that companies need to be aware of and address to ensure the success of their outsourcing efforts. Some of these challenges are the following.

Cultural Differences

First challenge of offshoring staff in the Philippines is cultural differences. Despite the Philippines and western countries having compatible cultures, you still can’t have 100% assurance that your in-house staff, if there are, and your offshore staff will click immediately. There will always be slight cultural differences between the home country and the Philippines, which can lead to misunderstandings and miscommunications.

Time Zone Differences

Next is the differences in time zone. The Philippines is several hours ahead of many Western countries. This can create difficulties in terms of scheduling and communication. Both the company and the offshore staff should come to an agreement about the working hours, non-working holidays, and other technicalities involved in setting a work schedule.

Language Barriers

Third offshoring staff challenge is the language barriers. While the Philippines is known for its English proficiency, there may still be language barriers that can affect communication and productivity. Companies should ensure that their offshore staff are proficient in the specific dialect or accent used by their clients. This is also where different communication styles will come into play.

Infrastructure and Technology Limitations

Finally, the technology and infrastructure limitations. Since the Philippines is still a developing country, it may not have the same level of technological infrastructure as developed countries like the US. This can affect the speed and quality of work to be delivered.

How to Overcome the Challenges of Offshoring to the Philippines

Offshoring staff to developing countries can present several challenges, but there are strategies that companies can use to overcome these challenges and ensure the success of their offshoring efforts. Here are some tips.

Invest in Cultural Training

To overcome cultural differences, alongside offshoring staff, companies should invest in cultural sensitivity training for their local and offshore staff. This can help promote better understanding and collaboration among the team, and will also prevent possible miscommunication in the long run.

Establish Clear Communication Protocols

Clear communication is critical for the success of offshoring efforts. Companies should establish clear communication protocols that take important factors into account, such as time zone differences and language barriers. Doing this means holding regular check-ins, video conferencing, and incorporating instant messaging tools.

Provide the Necessary Infrastructure and Technology

The limitations on infrastructure and technology is one of the biggest challenges of offshoring to the Philippines. To solve this, companies should provide their offshore staff with the necessary tools and technologies to perform their jobs effectively. Invest in providing hardware and software, fast and reliable internet connections, and access to cloud-based collaboration tools.

Ensure Data Security and Privacy

To overcome data security concerns, companies should implement appropriate measures to protect their confidential information and comply with relevant data protection regulations. This may include taking steps like establishing clear security policies and procedures, implementing data encryption, and conducting regular security audits.

Build Strong Relationships

Building strong relationships with offshore staff is one of the main keys to establish success in offshoring. Companies should invest in relationship-building by regularly visiting their offices, providing opportunities for training and development, and offering recognition and rewards for their work.

Get the Best Offshore Team with KDCI Philippines

Get the best offshoring Philippines has to offer when you partner with KDCI!We, at KDCI, have been offering our outsourcing and offshoring solutions for more than a decade now, making us experts at overcoming the challenges that come with offshoring to a developing country like the Philippines.Our offshore staffing solutions range from a variety of services, including back office, customer support, graphic design, digital marketing, finance and accounting, and web development.Do you want to get the best offshoring Philippines has to offer, and save 70% on operation costs? Just click the button below!Contact Us

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