Written by Rene Mallari
Offshoring providers in the Philippines offer different outsourcing services to businesses of various sizes and types.
Companies worldwide aim to improve their back-office operations by contracting with these service providers for technical assistance, sales support, and customer service. Filipino offshore teams have professionals with varying skill sets and specializations to fit every business need.
This article explains why you should consider hiring an offshoring company in the Philippines. It discusses the benefits of outsourcing processes to this Southeast Asian country.
Keep reading to learn more.
Reasons To Consider an Offshoring Company in the Philippines
The following are the benefits of outsourcing your business processes to a Philippine company:
Good Work Habits for Better Efficiency, Output, and Morale
Business process outsourcing (BPO) companies in the Philippines employ workers who inherently possess traits that promote service, team spirit, and performance. Most Filipino professionals are:
- Reliable. With proper onboarding, orientation, and training, they are dependable employees who can fulfill their duties without supervision. Most Filipino workers are also quick learners and active listeners.
- Optimistic. Filipino professionals often adopt a positive attitude during challenging situations. Many are cheerful regardless of the circumstances, smiling and greeting others warmly. A bright job attitude helps improve customer relations, collaboration, and harmony.
- Respectful. Filipino workers openly respect managers, team leaders, and executives. They address these individuals as “boss,” “ma’am,” “sir,” or “TL (team leader).” This demonstrates obedience to superiors and a commitment to their duties.
- Resourceful. Filipino employees are most diligent and creative. They confidently and patiently find solutions to the most challenging tasks. They devise a workaround to avoid disruptions if they cannot solve a problem completely and immediately.
- Service-oriented. Filipinos are known for their friendliness and hospitality, especially toward foreigners. They are sensitive to others’ needs and try to please them. This is one reason the Philippines excels in customer service.
Fewer Management and Legal Accountabilities To Cut Financial Costs
Your legal risks diminish when you outsource tech solutions, sales support, or customer service activities to an offshoring company in the Philippines. Setting up your own operations overseas entails abiding by and tracking different government regulations, compliance standards, tax laws, and labor laws.
The Philippines also permits its local workforce to organize labor groups to negotiate wages and other employment-related conditions. Outsourcing allows you to pass any labor issues on to the third-party vendor, reducing your potential financial and legal repercussions.
Above all, your service partner manages the third-party team. It tracks attendance, processes personal income taxes, and approves leave reporting. Your partner then submits periodic reports for your review.
Other benefits of delegating human resources (HR) activities include:
- Broad network. A service provider has access to a database of potential job candidates. Having more choices allows you to get the best candidates for the positions.
- Skilled professionals. Your BPO partner has an expert HR team to manage hiring processes and address job-related issues. It also conducts activities to promote work harmony among a culturally diverse workforce.
- Significant cost savings. You do not need to buy additional equipment, upgrade computer systems, or get a bigger office space when outsourcing. Your service partner has the necessary facilities.
Varying Work Schedules for Continuous Support
Professionals in an offshoring company in the Philippines are willing to work in shifts in technical support outsourcing, recruitment, bookkeeping, or customer service.
Filipino workers are amenable to working at night, on holidays, and on weekends to help clients, users, or customers from around the world. Rotating shifts are also a common practice in the industry, reducing the impact of time differences.
Delegating your back-end processes to the Philippines is favorable to your business. Your in-house team can work during the day, while your offshore team can work at night. This arrangement allows your in-house and third-party staff to work 24/7.
When you have continuous outsourced operations or customer support, you also have:
- Round-the-clock service. Your in-house staff and the third-party agents operate in separate locations with different time zones. This allows your customers, whenever and wherever they are, to reach your business anytime.
- Faster problem resolution. 24/7 accessibility lets your in-house and third-party teams quickly manage customer issues. Consumers’ wait time shortens because support agents are always available to respond to calls and resolve problems.
Growing BPO Sector for Future Opportunities
The first offshoring company in the Philippines started operations in 1992. The country became the world’s leading call center outsourcing hub within less than two decades. The BPO industry continues to grow and presents more opportunities for foreign businesses.
Since its inception, the Philippine outsourcing sector has opened millions of jobs for Filipinos and delivered billions of dollars in investments and revenue into its economy. Technology companies also continued their expansion efforts amid the COVID-19 pandemic, enabling the BPO industry to hit its revenue and job goals.
According to the Information Technology and Business Process Association of the Philippines (IBPAP), the IT and business process management (IT-BPM) industry will contribute almost $32 billion in revenue in 2022.
IBPAP adds that the IT-BPM sector’s revenue increased almost 11% from 2020 to around $29 billion in 2021, exceeding its adjusted target for 2022. The number of full-time employees in the industry also grew by 120,000 in 2021. This brings the overall headcount to approximately 1.4 million in 2021. The organization expects total jobs to reach 1.56 million in 2022.
Strong Economic Performance To Sustain High Investor Confidence
Between 2010 and 2019, the Philippine economy increased by 6% annually in the real gross domestic product (GDP). The 6% real GDP is viewed as above average, indicating a robust economy. As a result, this continuous growth raised consumer buying power, foreign and local investments, and government expenditure on public services and infrastructure to higher levels.
The national government’s cautious but aggressive economic and monetary policies helped sustain growth. Its measures have curbed inflation, improved public spending, increased foreign exchange reserves, and improved external debt payments. A stable political climate for the past several years also played a major part in this growth.
However, real GDP grew by 5.7% in 2021, when it plummeted to almost -10% because of the pandemic. Still, the country’s growth performance was above expectations and one of the highest in Asia-Pacific. In 2022, the economy grew by 7.6%.
The economy bouncing back after the pandemic is a sign that the Philippines is on track to recovery. Despite stellar economic growth in 2022, the government has conservatively set its growth target between 6% and 7% for 2023.
Strong Government Support To Encourage Investments
The government’s full support of the BPO industry is another reason to consider partnering with an offshoring company in the Philippines. The government acknowledges the vital role the BPO sector plays in generating jobs, introducing the latest technologies, and contributing to the nation’s coffers.
During the early years of the outsourcing industry, the national government established the Philippine Economic Zone Authority (PEZA). PEZA sets up economic zones across the country and incentivizes foreign investors.
Outsourcing companies that offer data entry services and other back-end processes set up offices in PEZA economic zones or IT parks to enjoy tax breaks and exemptions. These incentives spur business operations and revenues.
Additionally, the government launched several offices and initiatives to encourage employable Filipinos to work in the BPO industry. These include:
- Technical Education and Skills Development Authority (TESDA) provide free call center training and English proficiency programs for Filipinos interested in a BPO career.
- Learning English Application for Pinoys (LEAP) is a computer-based application funded by the Department of Science and Technology (DOST). It helps high school and college students meet the BPO industry’s employment requirements, which include excellent oral and written English skills.
- The Philippine Council for Industry, Energy, and Emerging Technology Research and Development (PCIEERD) is an agency under DOST that provides training programs for BPO workers, such as those to improve service orientation skills.
High Familiarity With Western Culture for Better Client Rapport
Filipino workers’ broad understanding of Western culture is a reason to consider working with an offshoring company in the Philippines. Sharing similar behaviors, beliefs, and expectations helps your outsourcing project succeed. Most Filipino professionals can easily interact with Americans and other native English speakers.
The Philippines had been a U.S. colony from 1898 to 1946 before it became a sovereign nation. During this period, the U.S. introduced its political, economic, educational, and cultural systems to the local population. American lifestyles, including fashion, movies, music, and food, were also brought in.
The Philippines shares these aspects with the U.S.:
- Many public and commercial billboards, posts, and signages are in English.
- English is the primary medium of instruction in primary schools and the language used in college and post-graduate examinations.
- The country’s branches of government (executive, legislative, and judicial), the criminal justice system, and the insurance code follow those of the U.S.
- English is the language of government, business, and legal records and documents.
With strong familiarity with Western culture and English skills, Filipinos can talk to Americans about various subjects. The language and lifestyles integrated into the local culture made Filipinos comfortable dealing with Western expectations. It gives them an edge over other nationalities in providing excellent BPO services such as contact center as a service.
High English Proficiency for Better Client Interactions
Millions of Filipinos can write, speak, and understand English well. The country ranks 22nd globally on the EF English Proficiency Index (EF EPI), thus labeled a “high English proficiency” country, and second to Singapore among the Asian nations in the index. Seventeen European nations, including Germany and the Netherlands, are ahead of it in the ranking.
The second official language of the Philippines is English, with basic grammar rules taught from preschool to college. This is one of the reasons many Filipinos do not find it hard to advance their English skills to make them suitable for BPO work.
High English fluency means Americans, Australians, Singaporeans, Irish, Canadians, and Britons can easily communicate and collaborate with Filipino workers. English-speaking employers, colleagues, and clients can clearly understand them. They can have their transactions processed and services addressed by Filipino agents more quickly.
Moreover, many Filipino agents can speak English with a neutral accent. Some have accents that resemble those of Americans, Britons, and Australians. They are well-versed in both formal and conversational English. Like other non-English speakers, Filipinos have a distinctive intonation that is still easy to understand.
Filipinos’ mastery of the English language makes outsourcing to the Philippines more appealing. BPO companies that depend on customer support, virtual assistance, help desks, and other back-office outsourcing services can use this competency.
More Robust Internet Infrastructure for Uninterrupted Operations
Since 2010, the Philippine internet infrastructure has considerably improved. Eight internet service providers (ISPs) currently offer connectivity using fiber-optic and satellite technologies to subscribers in the country’s main cities.
Increased competition in the ISP space resulted in faster internet connections. CNN reports that the country’s fixed broadband internet continued to progress while the ISP industry awaited the entry of Elon Musk’s Starlink.
According to the Ookla Speedtest Global Index report, the local fixed broadband median speed climbed to 88.13 Mbps in January 2023, higher than the 87.13 Mbps clocked in December 2022. The data shows a 26% speed improvement since the new administration started in 2022.
The National Telecommunications Commission (NTC) credited the current administration for issuing simplified tower permit procedures to further boost connectivity and speed. Permits granted to telecommunication providers to build fiber-optic towers and cell sites have risen from late 2020 to December 2022.
Starlink, the company under Musk’s SpaceX, started local operations in February 2023. It uses space satellites expected to deliver internet speeds of up to 200 Mbps. NTC Commissioner Ella Blanca Lopez expects its commercial availability will drive internet speeds in the country to higher levels.
The Bottom Line
Tapping into the services of an offshoring company in the Philippines brings many rewards to your business. Aside from the benefits mentioned above, you get an ample supply of low-cost and effective workers. A cost-effective operation leads to improved productivity and revenue.
Additionally, offshoring enables you to scale your outsourced activities. A BPO partner can increase or decrease the number of agents assigned to you based on business requirements or conditions. You can then manage your costs more prudently.
Know more about Philippine offshoring companies from providers with a reputable local presence, such as Unity Communications.