The Pros & Cons of Outsourcing to the Philippines in 2019


For any company, deciding to outsource is a big decision to make. The same can be said for choosing the right country to outsource to.

A quick online search of good offshore staffing countries will lead you to several articles pointing you to the Philippines, one of the top BPO providers in the world. The Philippines 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 benefits and drawbacks about outsourcing in the Philippines that one has to consider.

We made you a quick list to help you think it over.

Pros

Exceptional understanding of western culture

Filipinos are well-versed in the English language, owing to an educational system with a strong focus on the English language. English is one of the two official languages of the country, and it is widely used in all forms of media.

The Philippines’ strong American ties have also greatly influenced the country, giving Filipinos a better understanding of the western culture as compared to other Asian countries. As a result, language barriers would not be a problem with Filipino workers.

Great talent & lenient recruitment laws

The top outsourcing companies in the Philippines only hire candidates with college degrees. Philippine universities churn out thousands of highly capable workers yearly, leading to a large and diverse talent pool.

Unlike the US, employers in the Philippines can ask candidates to take IQ exams, qualify candidates based on age, gender & marital status. This makes it easier for companies to gauge an employee’s productivity.

Low cost of labor

The recent increase in the country’s inflation rate affects the dollar exchange rate by weakening Philippine Peso (PHP).

Currently, the US Dollar to PHP conversion is from P52.45 to $1.00, the weakest it has been in 12 years. This makes the cost of their salaries lower than other developing countries.

NextGen IT infrastructure

The Philippines’ IT infrastructure is at par with that of Japan, South Korea, and Hong Kong.

Tech conglomerates like Cisco & Avaya have local offices in Manila, offering expert data and networking solutions for outsourcing companies. Multiple established internet service providers are able to deliver high-speed fiber optic connection across the country.

BPO is a government-supported industry

The Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEERD) has been working towards providing training programs to train BPO workers since 2013.

eLearning solutions like the Learning English Application for Pinoys help senior high school students and college students prepare to meet the BPO demands after graduation.

Persistent annual growth

There was a time where there were security risks during the Marawi siege in 2017, leading analysts to predict investor withdrawal. Nevertheless, the BPO sector’s revenues still hit $23 billion that same year.

Market forecasts show that the Philippines might see a nearly doubled revenue by 2022 with $40 billion.

 

Cons

The weather

Annually, an average of 20 tropical cyclones pass through the Philippines, causing floods and cancelation of school and work in flood-prone areas within a typhoon's path.

Holidays

Compared to the US (11 official holidays), the Philippines has a total of 18 official non-working government and religious holidays. With the Philippine population being predominantly Christian, a lot of culturally important holidays are

Pro-employee 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.

13th-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.



In our pursuit of sharing our passion and providing world-class services, we balance these pros and cons out here at 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 to provide expertise in eCommerce, Digital Marketing, Creative Production, Web Development, and Back office processes. Our clients who took the leap to work with us now have their operations up by efficient and custom KDCI teams who take their businesses further.

Contact us today to learn how you too can take your business further.

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KDCI is a global provider of customized outsourcing solutions. We specialize in various business functions and practices ranging from back office support and design & branding, to contact center and web & app development services. CONTACT US now to learn more about our outsourcing solutions.