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Businesses need operational efficiency, expert knowledge, and strong skills to continuously grow and stay ahead of rivals. Improved service from effective processes generates more customers and repeat purchases. However, not all businesses can afford to remain competitive.
Philippine offshoring providers can help. Businesses of all sizes and shapes have benefited from offshore outsourcing for years. To help you identify whether it is the right move for you, here are the top benefits of Philippine-based offshore business process outsourcing (BPO).
Benefits of Philippine-based Offshore BPO
Outsourcing involves employing a third-party company to perform certain business functions or operating entire departments to reduce costs. Offshore outsourcing means hiring an external provider in a distant country to leverage economies of scale and minimize expenses. Several aspects of business process outsourcing in the Philippines can help you.
The Philippines is one of the top destinations for offshore outsourcing. The country’s BPO industry has all the qualities clients want: a talented workforce, low labor costs, and highly flexible workers. Filipinos are willing to work graveyard shifts and learn native-level English to adapt to their clients.
Here are the main benefits of Philippine-based offshore BPO:
Lower Labor Costs
Offshore countries typically have lower labor costs due to their low cost of living. The hourly rate of talented experts in the Philippines is almost half that of someone with the same expertise in the United States.
For instance, the hourly rate of a software developer in the U.S. with roughly one to two years of professional experience typically starts at $50 to $80 per hour. A Filipino talent with a similar skill set and years of experience has a starting hourly rate of anywhere between $20 and $30 per hour. That difference is primarily due to the cost of living differential.
Reduced Operating Expenses
One of the biggest benefits of Philippine-based offshore BPO is reduced operating costs, especially regarding real estate and infrastructure. Having fewer in-house staff means you can reduce real estate expenses, office supplies, and other utility costs.
Furthermore, you need to consider the total cost of an employee, including expenses for their training, recruitment, and benefits. The longer you advertise open positions, the more costly hiring new employees becomes, and that’s before factoring in any applicable legal fees.
Strong Government Support
The Philippine government fully supports the BPO industry since it significantly contributes to its growing economy. Republic Act No. 7916, or the Special Economic Zone Act, which dates back to 1995, makes the country an attractive BPO destination due to the tax breaks and other tax incentives BPO companies enjoy within special economic zones.
The government also supports the industry through data privacy laws, the Public Telecommunications Policy Act, which ensures reliable and universal infrastructure, and institutions that oversee the capabilities of BPO workers.
For instance, the Philippines has the BPO Training Academy, accredited by the Technical Education and Skills Development Authority (TESDA), which offers technical and vocational learning programs.
Fewer to No Language Barriers
English is one of the official languages of the Philippines, alongside Tagalog. As the medium of instruction in most educational institutions, the language of trade and law, and the language of many publications and broadcasts, English is integral to Filipinos’ daily lives.
According to Future Learn, over 14 million Filipinos can speak English fluently, making the Philippines one of the largest English-speaking nations in the world.
Companies considering outsourcing must not ignore this benefit of Philippine-based offshore BPO. With little to no language barrier, the collaboration between Filipino workers and foreign BPO clients is faster and smoother.
High-quality Solutions
Many Filipinos are known for being hardworking, polite, sincere, and open. More importantly, Filipinos are hospitable, accommodating, calm, and professional, taking extra care to provide high-quality output on time. They also have a cool attitude, even in highly stressful situations.
These qualities are crucial in administrative, customer service, and technical support roles. Plus, with its supportive government, access to higher learning opportunities, and other educational infrastructure, the Philippine BPO industry remains competitive when it comes to its solutions.
Similar Cultural Traits
One of the benefits of Philippine-based offshore BPO is the cultural similarities between Filipinos and the West. Western countries strongly influenced Filipino culture due to the colonization of Spain and the United States.
When it comes to BPO, Filipino culture is one that clients in the U.S. can recognize and understand. The familiar cultural aspects result in easier integration and a more efficient partnership between the two parties. Besides, Filipinos encounter little to no problem interacting with foreign end users due to their similar cultures.
Young Demographic
The Philippines has a young demographic, with a median age of 25.7 years. Thus, the country is home to talented and hardworking professionals eager to get started in their careers.
Since the workforce comprises mostly young talent, companies can expect Filipino workers to be highly familiar with technology and have a better understanding of how it operates, giving them a competitive advantage in the outsourcing market. The result is a better and more innovative exchange of ideas.
Immediate Labor Pool Availability
Why limit yourself to your domestic market when searching for potential candidates? The advent of technological developments made finding expert professionals across the world easier.
A major benefit of Philippine-based offshore BPO is that you gain immediate access to professionals eager to start their careers. Hiring the cream of the crop for your functions is also easier since you can offer a competitive salary for an offshore location while still paying less than you would for domestic talent.
Moreover, you can find candidates who are happy to work for a foreign company. BPO work is widely popular and accepted in the Philippines, giving you an abundant supply of applicants with sufficient skills and educational levels.
Talented Workforce
Filipinos are naturally resourceful and know the easiest way to perform tasks with minimal supervision. They also learn fast and can quickly adapt to innovations and technologies. They are willing and passionate about working in diverse settings.
The Philippines is also home to professionals specializing in accounting, information technology (IT), customer service, and legal and business support. Filipinos also have access to additional training opportunities, such as Contact Center Services NC II, accredited by TESDA.
Excellent Work Ethics
Filipinos are popular for their exceptional work ethics, which are noticeable in their interactions with customers, colleagues, and superiors. Working under pressure or being in a stressful situation is not a problem, as they maintain tact and patience in the most taxing situations.
Many also know Filipino workers for their accountability and sense of ownership or concern. Their positive work ethics and easygoing attitude attract outsourcing clients and companies in other sectors to the Filipino workforce.
Innovative Technology and Infrastructure
Central business areas, modern buildings, seat rentals, and office leases are widely available in the Philippines. Office buildings tower on almost every corner of the metro. With so many options, BPO companies have little trouble deciding where to shop.
Additionally, technological developments are continuously adopted in the Philippines, contributing to the BPO industry’s economic success. Internet service providers (ISPs), telecom companies, healthcare technologies, and more are pushing the limits of what is technologically possible to meet the demands of clients.
Better Diversity and Flexibility
As mentioned, the Philippines is a culturally diverse nation. Filipinos are familiar with foreign traditions and cultures that significantly impact their ways of life and thinking. Diversity contributes positively to productivity in the workplace and the innovation of ideas.
Another benefit of Philippine-based offshore BPO is Filipino workers’ flexibility regarding shifts and rest days. BPO companies in the country operate on a schedule that suits their clients, mostly at night. Filipinos have no problem working graveyards and are often willing to work on shifting schedules to meet the client’s needs.
Improved Data Security and Privacy
Privacy concerns are common in businesses. Many are at risk of cybersecurity threats and attacks, making it challenging to maintain IT infrastructure. If you lack the necessary knowledge or do not want to handle the brunt of monitoring IT assets and safeguarding data, outsourcing to the Philippines is your best choice.
The country’s data privacy law, solidified by the Data Privacy Act of 2012, has dramatically improved the security of the IT-BPO sector in the country. The act mandates outsourcing providers to guarantee personal data protection from unauthorized access.
With the law in place, BPO clients can feel more secure when working with Philippine-based offshore providers. Thanks to the best data privacy practices, the IT-BPO industry remains a fast-growing and successful sector in the archipelago.
Less Legal Liability
One of the issues with running a business is the risk of legal liabilities. Most businesses and C-level executives are already familiar with frivolous lawsuits filed by in-house staff. Hence, many outsource to minimize legal headaches.
With outsourcing, the BPO provider employed on a contractual basis controls the legal risks. You, as the client, do not have to recruit workers or face lawsuits and in-house politics since the outsourcing vendor handles these matters. Lastly, your BPO partner can help you minimize the risk of occupational hazards and compromised information.
Reduced Management Headaches
Reliable BPO service providers have professional and experienced administrative and human resources (HR) teams to help you throughout the process. They assist you with setup, task allocation, training program assignment, and tax returns. You can also stop dealing with vacation or sick leave reporting and worrying about whether employees report on time.
Not only does outsourcing to the Philippines absolve you of management headaches, but it also saves you time and money on hiring and onboarding procedures. So, all you need to do is concentrate on growing your business.
Improved Services and Change Catalyst
When you build a team offshore, you gain a new set of eyes on each task you assign to staff. You benefit from an objective and innovative opinion, bringing positive change to your organization. Outsourcing also requires you to document and analyze existing workflows when training offshore teams, enabling you to detect improvement points.
The quality of service you deliver and receive improves by outsourcing to the Philippines. For example, a Filipino customer service team can provide support 24/7 or in ways you cannot. The right BPO partner gives you excellent service and handles management and internal problems on your behalf.
Excellent Customer Service Skills
One of the benefits of Philippine-based offshore BPO is Filipinos’ innate hospitality. BPO clients and end customers are attracted to Filipino agents’ polite practice and speech, which come off as more natural than obliged. When greeted with a customer-centric approach, leads and prospects are more likely to become paying customers.
Outsourcing to a country that delivers excellent customer service lets you add real value to your business. It promotes positive word-of-mouth advertising from customers, making them more likely to refer your brand to friends and family.
Do Small Businesses Benefit from Philippine-based Offshore BPO?
Yes, even small businesses benefit from outsourcing to the Philippines. Offshore outsourcing solves many problems that small and mid-sized businesses (SMBs) encounter.
For a small business, the goal is to minimize time and money while maximizing business output. However, it is a challenge because SMBs must ensure that the reduced cost of work and raw materials does not impact the quality of their products and services.
In addition to raw materials, employee taxes, healthcare plans, bonuses, and training are part of the SMB’s budget. The result is that business owners pay 1.25 to 1.4 times more than the standard salary of employees in their area.
Many small businesses believe that outsourcing to the Philippines is an inexpensive strategy to save on valuable resources. Here are some of the benefits of Philippine-based offshore BPO for small businesses:
Saving Resources
A small-time business owner may find it impossible to save on valuable resources without compromising employee productivity and output. However, offshore outsourcing to Philippine-based BPO companies makes this possible.
They need not worry about paying for employee benefits and healthcare plans because the BPO company oversees this. Business owners simply need to pay the agreed-upon monthly fee. They can save up to 70% on labor costs by outsourcing to an offshore location with a lower cost of living.
Multiplying the Workforce
One of the benefits of Philippine-based offshore BPO for small businesses is the ability to multiply their workforce at a lower price than what they would pay locally. However, this involves building a scalable business growth model rather than saving labor money.
By doubling or tripling the workforce for the same price, small businesses can take their organizations to new heights. Considering how competitive the niches and markets for small businesses are, multiplying the workforce means they can outplay rivals.
Sharpening Focus
Outsourcing non-core tasks to Philippine-based BPO companies enables small businesses to concentrate on growing and developing the company. They can work on sales and innovation instead of managing boring and repetitive office problems or operational needs that add little to no value to the bottom line.
Improving Work-Life Balance
Most small business owners do not have enough hours in the day. They work more hours due to limited capacity. For example, building a customer service outsourcing team in the Philippines helps improve work-life balance by transferring your business’s repetitive, time-consuming, and often menial work to an external firm.
Five Industries That Benefit from Philippine-based Offshore BPO
Digital communication and cloud computing have helped businesses communicate with customers and each other faster and easier. Many companies would have stayed local businesses, but the internet and technology have enabled organizations to thrive globally. Offshore outsourcing is one of the biggest catalysts for a global way of doing business.
Which industries use BPO in the Philippines? This section explores the industries that outsource the most and the benefits of Philippine-based offshore BPO to their sector.
Finance
Daily local, in-house banking operations are increasingly going the way of the dinosaurs. Recessions taught the finance and banking industries that their practices were not efficient or cost-effective. However, the benefits of Philippine-based offshore BPO help the sector with the following:
- Centralizing functions
- Increasing efficiency
- Boosting speed
- Improving day-to-day operations
- Minimizing operational risks
While outsourcing has been around for decades, the banking and financial industries have only started embracing its benefits recently.
Insurance
Between dealing with healthcare providers, pharmaceutical companies, and government regulations, it is no surprise that insurance companies are major clients of outsourcing. Their customer data management system alone opens up constant, menial tasks. Some functions that insurance providers outsource include the following:
- Data capture
- Claims processing
- Commission management
- Policy management
- Content management
- Mailroom management
- Customer service
- Lead generation
- Other administrative duties
Retail
Many retail giants manufacture and sell goods directly to customers. Offshore outsourcing aids these businesses by taking care of the nuts and bolts of product sales and production, including dealing with customers and answering their questions.
Thousands of customer messages and tickets pass through retail companies each month. Keeping up with such demand overwhelms in-house staff, causing delays when responding to customer requests and a drop in satisfaction. The benefits of Philippine-based offshore BPO allow retail companies to focus on what they do best: manufacturing and selling.
Furthermore, the services you can outsource include:
- 24/7 customer support,
- Technical service outsourcing,
- Order processing management,
- Logistics monitoring,
- Data entry,
- Revenue management,
- Supply chain solutions, and
- Digital marketing and digital support.
Utilities
Utility companies have difficulty keeping up as competition for customer business heats up. They are not only fighting for customer dollars but also their legacy infrastructure. With most practices decades out of date, they hang on even as their bottom line decreases.
As with any business dealing directly with consumers, utility providers have a lot of information and paperwork to sort through. Companies can get operational breathing room by outsourcing customer service, invoicing, and billing.
Some services utility companies can outsource include:
- Customer care,
- Telesales,
- Virtual assistants, and
- Lead generation.
Real Estate
Real estate BPO companies offer the needed manpower to perform tasks. Real estate is one industry that reaps the benefits of Philippine-based offshore BPO because:
- The sector quickly implements new technologies, adapting to the digital world by engaging customers online.
- BPO providers enable work completion at any time since many employ a 24/7 outsourced customer support team.
- Hiring real estate BPO companies is affordable since they no longer need to pay for equipment or space.
Services you can outsource under real estate BPO include:
- Telemarketing,
- Customer services,
- Residential auction staffing,
- Leasing consultation, and
- Property finance and accounting management.
The Bottom Line
There are many pros and cons to outsourcing to the Philippines. However, the benefits of Philippine-based offshore BPO outweigh the costs, propelling the country to become one of the top offshore markets in the world.
The more businesses actively seek new locations to support their basic processes, the more it makes sense for them to consider the Philippines to minimize expenses and work with global talent. Several success stories of outsourcing to the Philippines prove this.
The Philippines is especially attractive due to its proven track record for providing high-quality service, wide talent pool, and cultural closeness to the West. The country’s government also helps facilitate collaboration between global clients and Filipino BPO companies.
