Written by Dion Jay Tality
Are you planning to strike a balance between improving productivity and saving money? Offshoring, or offshore outsourcing, is delegating functions to a third party in a foreign country.
As such, the Philippines is a top offshoring destination due to its skilled talent, lower costs, and quality services. So hiring an offshoring provider in the Philippines is best for scaling operations while reducing costs.
This page covers the benefits of offshoring to the Philippines. Learn how you can take advantage of this strategy in terms of the following:
Let us dive in!
Key Benefits of Offshoring to the Philippines
Outsourcing to the Philippines has become a common strategy among businesses in the U.S., the UK, Canada, and Australia. They take this route due to the many benefits of offshoring to the Philippines.
Why not? The Philippines has earned its title as the world’s business process outsourcing (BPO) capital. The country is notable for its offshoring perks brought about by its supportive government, favorable laws, and ideal business environment.
However, the benefits of offshore BPO partnerships in the Philippines boil down to three key factors: talent, cost, and quality. Read below to learn more.
1. Talent: Harnessing Knowledge and Skills
The Philippines is home to a diverse pool of skilled talent. Businesses of all sizes leverage Filipino professionals’ knowledge, skills, expertise, and experience. This talented workforce is one of the primary benefits of offshoring to the Philippines.
- Highly Skilled Workforce. The Philippines produces many graduates in various fields, such as hospitality, information technology (IT), finance, healthcare, and e-commerce. These graduates make up the workforce of offshoring providers in the country. Recent industry initiatives aim to generate 2.5 million direct employment by 2028.
- High English Language Proficiency. The Philippines takes pride in its high level of English proficiency. It ranked 22nd worldwide in the 2022 English Proficiency Index (EPI) and second in East and Southeast Asia. Thus, businesses offshoring to the country can easily communicate and collaborate with their offshore teams.
- Strong Western Cultural Affinity. The Philippines has a colonial past with the United States and Spain. Businesses in the country also have ongoing partnerships with companies in Western countries. As such, those looking to hire offshoring providers in the country can easily communicate and find commonality with Filipino contractors.
- Good Work Ethics and Desirable Traits. Filipinos have a strong work ethic, given their job commitment and dedication. Such professionalism benefits your offshore workforce. They also possess positive traits, such as hospitality, empathy, and patience, which are ideal for customer service outsourcing in the Philippines.
2. Cost: Saving Money for the Long Term
Business process outsourcing in the Philippines is a popular cost-reduction solution. The country is known for its lower labor, operating, and living expenditures, allowing businesses to save money in the long term. Check out the cost-saving benefits of offshoring to the Philippines below.
- Cheaper Labor Costs. The Philippines is known for its affordable workforce. According to a news report, companies offshoring to the country to leverage Filipino talent can reduce labor costs by 60%.
- Reduced Operating Expenses. The same news report cites that outsourcing can cut operating costs by 40% to 50%. BPO providers can build infrastructure, hire talent, and train workers more affordably in the Philippines than in first-world countries. This allows them to run at lower expenditures, reducing client service fees.
- Lower Cost of Living. Generally, the Philippines has a lower cost of living than many developed countries, such as the United States. Offshoring your business operations to another country can help you save money significantly. Aside from lower labor and operating expenses, you can also take advantage of tax incentives and other benefits.
- Competitive Pricing. The Philippines transformed from being a low-cost service provider to providing high-quality services at reasonable prices. What does this imply? Offshoring can help reduce costs while giving you access to expertise and technology to scale your operations and improve your services.
3. Quality: Improving Business Performance
Offshoring and BPO in the Philippines don’t only offer cost-saving benefits; they also guarantee quality services. Offshore providers establish quality control, set critical metrics, measure performance, and optimize business operations. That allows companies to enjoy the service quality benefits of offshoring to the Philippines.
- High-Quality Service. The Philippines has a good reputation for providing high-quality services. Partnering with service providers in the country gives you access to professionals and experts. Offshoring also lets you build infrastructure in information and communication technology (ICT) hubs. These factors help streamline operations and improve services.
- Improved Efficiency. Aside from quality, offshoring to the Philippines can also guarantee service efficiency. An offshore team consisting of expert Filipino professionals can deliver work on time. Advanced technology, such as automation, can help simplify and accelerate your processes. Ultimately, offshoring can increase your overall efficiency.
- Increased Productivity. As a decision-maker, you aim to boost your productivity to increase your bottom line and grow your business. With access to expertise and technology, offshoring is a viable solution for improving productivity. Place your business on the right track by investing in people and technology.
- High Customer Satisfaction. Besides service efficiency and quality, customer satisfaction (CSAT) is the most critical metric in business. By hiring customer-centric contractors through BPO providers and leveraging digital tools, you can enhance your customer experience. Offshoring thus allows you to access resources and improve your CSAT.
Other Remarkable Offshoring Benefits
We have already covered the primary benefits of offshoring to the Philippines: talent, cost, and quality. But wait, there is more—consider the other remarkable offshoring benefits below:
- Full Government Support. The Philippine government has actively supported the country’s BPO and offshoring industries. Its utmost support began with enacting the Special Economic Zone (SEZ) Act, which aims to build ecozones and attract foreign investments. The government’s recent initiative is the IT-BPM Roadmap 2028 program.
- Favorable Laws and Regulations. The Philippine government has created fair laws and regulations for the outsourcing and offshoring sector. Aside from the SEZ Act, businesses can also capitalize on the Foreign Investments Act (allowing 100% foreign ownership) and the Omnibus Investments Code (incentivizing foreign investments).
- Ideal Business Environment. The Philippines has gained a perfect business environment because of its supportive government and favorable laws. The offshoring sector initially boomed in the three metropolitan cities: Manila, Cebu, and Clark, Pampanga. Today, the country is preparing for the Digital Cities 2025.
- Proven Outsourcing Track Record. Due to its potential benefits, the Philippines earned its reputation as the world’s BPO capital. Colliers also cite that the country could capture a bigger share of the global BPO market. As such, businesses looking to offshore operations to the country can capitalize on a thriving industry.
How to Get Started with Offshoring in the Philippines
Now you know the benefits of offshoring to the Philippines. Still, you should be wary of possible drawbacks, such as time zone differences, communication barriers, cultural differences, security risks, and business disruptions. More importantly, find ways to address these challenges and mitigate risks.
After weighing the pros and cons of offshore outsourcing to the Philippines, you can start offshoring. Follow our critical steps below:
- Audit Your Business Operations. A thorough examination allows you to identify your business needs and determine tasks to move to the Philippines.
- Study the Philippine Offshoring Industry. Check the country’s market growth, laws and regulations, and industry trends. Consider all the valuable information discussed above to see if it is worth offshoring to the Philippines.
- Work with Government Agencies. Consult and coordinate with the IT and Business Process of the Association of the Philippines (IBPAP), the Philippine Economic Zone Authority (PEZA), and the Department of Information and Communications Technology (DICT).
- Find an Offshoring Partner. Offshoring providers in the Philippines abound. Find the right one for your business by studying its experience, credentials, technology and infrastructure, reviews and referrals, and workforce quality.
- Conduct a Pilot Run. The goal of a pilot run is to ensure everything will run as smoothly as possible before the actual implementation. If the pilot run returns subpar results, you can make some tweaks here and there.
- Launch Your Business Operations. Now, you are ready to kickstart your offshoring operation. Keep your business up, running, and fully operational!
- Continuously Optimize. As with any business or project, you must constantly improve your processes, update your technologies, and encourage the upskilling of your contractors. More importantly, track your progress and make improvements when necessary.
The Bottom Line
Offshoring to the Philippines is a strategic move for many businesses looking to boost profitability and save money. This strategy lets you take advantage of the country’s:
- Diverse pool of skilled talent,
- Lower labor and operating costs, and
- High-quality services.
As such, consider the benefits of offshoring to the Philippines. Weigh its pros and cons before taking the plunge. By leveraging the offshoring benefits described above, your business can achieve growth and long-term success!
Ready to employ offshore outsourcing in the Philippines? Contact us, and let’s connect! Unity Communication offers outsourcing services, whether for customer-facing or back-end functions. We can help scale your business operations and reduce costs in the long run.