Written by Joyce Ann Danieles
Offshoring naturally comes to mind when you aim to reduce expenses, enhance efficiency, and prioritize growth. Offshoring to the Philippines is specifically an attractive option for your enterprise when you want to achieve such outsourcing goals.
But what makes this country special as an outsourcing destination?
Keep reading to discover the nine reasons you should hire an offshoring provider in the Philippines to suit your operational needs.
Why Offshore to the Philippines?
You turn to offshoring to free up resources and increase efficiency. Offshore business process outsourcing (BPO) lets you designate specific front- or back-office functions to an overseas provider.
The Philippines is one of the most trusted go-to hubs for offshoring in the Asia-Pacific region. The country accounts for 10% to 15% of the global BPO market share.
For many reasons, the country currently ranks among the world’s best BPO destinations. Let’s talk about a few of the proven benefits.
1. Achieve Cost Savings
Cutting operating costs is one of the top reasons businesses offshore work to the Philippines. As a small or medium-sized business, you have several necessary processes that do not generate revenue. Customer service and technical support are examples of these business functions.
Whether you employ contact center agents or virtual assistants, a Philippine BPO firm helps reduce your operating expenses.
Let us take the case of Wireless Watchdogs. The wireless management company saved up to 65% of labor costs by outsourcing its help desk to Unity Communications. The Philippine-based BPO provider also helped boost sales through upselling and service quality improvement.
To further illustrate, here is another example of how outsourcing to another country reduces your operating costs:
- A Colorado-based small business needs a 20-seater operation for its e-commerce support. These customer service representatives (CSR) will handle online shoppers’ pre- and after-sales support services.
- If the business does not outsource, it must allocate a significant budget for recruitment, technology, and real estate expenses. Its operating costs might look like this:
|Cost of Operations (In-house)|
|Rent||20 CSRs at $165 per individual service space||$3,300|
|Salary||20 CSRs at $18 per hour each; they work nine hours daily for 20 days.||$64,800|
|8 gb RAM laptops||20 units worth $1,700 a piece||$34,000|
- Based on the table above, the company’s initial cost for e-commerce support reaches over $100,000 monthly. The estimations do not include other utility costs such as internet service, power, and water bills.
- Meanwhile, the average salary of a CSR in the Philippines is around $300 per month. Compare the wage to the average labor cost per hour in Colorado; it does not reach $5.
- If the business offshores to the Philippines, it achieves high-quality service at affordable costs. Since the BPO company shoulders most operating expenses, such as real estate and office equipment, the business can also provide the same wages as a U.S.-based CSR. The outsourcing costs might look like this:
|Cost of Operations (Offshore)|
|Salary||20 CSRs at $18 per hour each; they work nine hours per day for 20 days.||$64,800|
|8 gb RAM laptops||None||$0|
- The table above shows that the business achieves more than 50% cost savings when contracting a Philippine BPO provider. It does not need to worry about the expenses for rental fees, laptops, and utilities.
2. Access Skilled and English-speaking Workforce
The Philippine BPO industry does not fall behind in providing a skilled and English-speaking workforce.
The Philippines ranks as the third-largest English-speaking country worldwide. It is also the second of 24 Asian countries with high English proficiency, garnering an Education First English Proficiency Index score of 578.
Since your consumers are native English speakers, you need team members who can naturally interact with them throughout the customer journey, which makes Filipino agents in high demand.
Besides recognizing English as an official language, the Philippines includes English grammar and oral communication as part of its curriculum.
Filipino professionals undergo comprehensive training in various BPO services through the Technical Education and Skills Development Authority (TESDA) and other trusted organizations.
In addition to English proficiency and literacy, expect the following work attitudes when offshoring to the Philippines:
- Flexibility and eagerness to learn. Filipinos have a knack for quickly adapting to various work policies and procedures. They also value education and upskilling to constantly progress in their careers.
- Resilience and optimism. These qualities are two of the most crucial traits a customer service agent should possess. Filipinos dare to smile and be friendly despite crises. The Fund for Peace proved that the country scored 5.9 on its State Resilience Index (SRI).
- Resourcefulness and competence. Filipino talent always explores alternatives and innovative ways to make ends meet. They are naturally resourceful and competent to meet their personal and team goals.
- Professionalism. Filipino workers are known for their hospitality. They share a positive mindset and attitude toward their workplace. Most importantly, they do not let rude clients ruin their mood in the office; they understand the consequences if they do so.
3. Experience Cultural Compatibility
Cultural compatibility makes offshoring to the Philippines practical. Since the 1500s, the Western world has strongly influenced the country’s cultural diversity.
From entertainment and politics to technology and business structure, the country has embodied most European and American values until today. Other than decreasing miscommunication, below are more ways for Filipino contractors to match and benefit Western employers and clients.
- Aligned educational and work experience. The Philippines follows the American educational system. Plus, with the current K-12 curriculum, Filipinos have become more immersed in international education standards. They know how to provide exceptional service once they enter the global workforce.
- Knowledge of the latest news and trends. Philippine BPO firms ensure their staff knows about recent industrial developments to provide quality output. For instance, Filipino agents focused on technical support outsourcing are well-versed in the latest computer and mobile device trends. Such knowledge helps them deliver effective tech repairs.
- Globalized mindset. Filipinos can quickly answer your questions if you ask them about fashion, music, film, and entertainment trends worldwide. These insights are vital if you operate in similar sectors and require a customer service team. Filipino agents can help you provide a more personalized customer experience.
Ultimately, the country’s cultural compatibility with the U.S. and other Western countries streamlines your customer service and secondary functions. This factor helps avoid conflicts and misunderstandings. It also strengthens your partnership with your selected Philippine BPO firm, resulting in quality outcomes and increased revenue.
4. Match Business Schedules and Operations
You will not regret offshoring to the Philippines because front- and back-office outsourcing providers adapt to different time zones. Reliable Philippine BPO firms build a team who works during your business hours. Filipino workers have fully adopted the night shift culture due to the benefits listed below.
- Article 86 of the Philippine Labor Code mandates a 10% night shift differential of a worker’s regular wage. Employees will receive the additional rate if they work between 10:00 PM and 6:00 AM.
- BPO workers can spend more time with their families. Filipinos are known for their strong family ties. Hence, those working at night can have more time to bond with their family and friends.
- Taking the night shift helps avoid the rush hour. Despite having a well-developed transportation system, the Philippines struggles to manage rush-hour traffic congestion. Filipino workers thus prefer working at night to avoid the stress of commuting daily.
- Some employees prefer working in a calmer environment. The night shift is slower and less challenging than the day shift, whether at the office or at home. Fewer distractions and disruptions affect their work.
As a BPO client, you also enjoy many advantages when offshoring to the Philippines. Expect to attain the following benefits while working with a Philippine BPO firm:
- Fast and reliable team communication
- Strong collaboration
- Regular meetings and training sessions
- Increased productivity and efficiency
- 24/7 customer service and other support services
- Fewer project delays and issues
- Better work performance monitoring
5. Optimize Robust Infrastructure and Technology
The Philippine BPO industry uses innovative technologies to perform non-core functions more effectively and quickly. They optimize these solutions to improve customer experience, enhance agent productivity, and prioritize growth.
- Artificial intelligence (AI) mimics human intelligence to perform large-scale, repetitive processes. AI expedites big data collection and analysis. AI-powered capabilities include machine learning (ML) and natural language processing (NLP).
- Speech analytics uses AI to understand, process, and analyze human speech. This technology helps contact centers evaluate call recordings and transcripts from digital channels such as chats and phone calls.
- Robotic process automation (RPA) utilizes AI-powered software bots to automate data collection, information sharing, and customer responses. RPA includes interactive voice response (IVR) systems, ticketing solutions, and chatbots.
- Predictive analytics combines data mining techniques, statistical models, and ML algorithms to conduct predictions based on historical data. BPO firms use this technology to study risks, opportunities, and trends.
- Cloud technology facilitates secure transactions, data management activities, and analyses over the Internet. Cloud solutions include contact center as a service (CCaaS), customer relationship management (CRM), remote monitoring, and software integration.
- An omnichannel solution consists of multiple integrated communication channels such as voice calls, live chat, email, video chat, and social media. Service providers implement omnichannel to connect with your customers seamlessly and quickly.
Offshoring to the Philippines lets you leverage such advanced technologies and enjoy these benefits:
- Boost customer satisfaction and retention rates
- Expedite market research and trend monitoring
- Eliminate duplicate tasks and processes
- Enhance productivity and flexibility
- Personalize customer experiences
- Make informed business decisions
- Spot critical issues and areas for improvement
- Meet daily quotas and project due dates
- Focus on business development initiatives
- Increase sales and revenue
6. Receive High-quality Service
Given the first five reasons discussed above, anticipate high-quality service delivery when offshoring to the Philippines. Because BPO firms have all the necessary talent, technologies, and cultural affinities, they provide the following front- and back-office services with scalable and excellent outcomes.
- Customer service (call centers and contact centers)
- Technical support (help desks and desktop support)
- Data entry services (data input and analysis)
- E-commerce support (digital marketing and inventory management)
- Healthcare outsourcing (medical billing and coding)
- Financial service support (payroll processing and bookkeeping)
- Telecommunications assistance (wireless network monitoring and maintenance)
7. Benefit From Strong Data and Privacy Protection
The Philippine BPO sector adheres to strict policies safeguarding sensitive data and privacy. In particular, the Philippine government ensures the protection of every individual and business information through the Data Privacy Act of 2012.
Established under the law, the National Privacy Commission works to:
- Ensure personal information controllers’ compliance with the law’s provisions;
- Require the appointment of data protection officers (DPO) for every BPO business;
- Process DPO and personal data processing and filing system registration;
- Monitor organizational and technical cybersecurity measures;
- Investigate and resolve data-related complaints and violations;
- Impose a temporary ban on data processing that threatens national security; and
- Negotiate with foreign data privacy authorities for cross-border business transactions.
8. Gain Solid Government Support
Due to the vast contribution of offshoring to the Philippines, the government implements related policies and procedures. These rules and regulations benefit BPO providers and foreign clients.
Recent statistics from the IT and Business Process Association of the Philippines (IBPAP) showed that the country’s BPO market grew by 10.6 % in 2021. The industry’s revenue reached nearly $29.5 billion in the same year.
Because of that, the national government has developed initiatives to maintain or further improve the industry’s economic contribution. The government ensures the BPO sector becomes one of the fastest-growing industries in the Philippines and globally by enacting these laws.
- The Department of Information and Communications Technology (ICT) Act of 2015 enables universal access to affordable and reliable ICT services. It also set rules and standardized policies to simplify partnerships with outbound and overseas industries.
- As tackled in the previous section, the Data Privacy Act of 2012 ensures compliance with international security standards to safeguard personal data confidentiality and integrity. It also directs the proper management of countries’ outsourcing requirements and alignment with their data privacy laws.
- The Special Economic Zone Act oversees foreign investments such as BPO and promotes them inside special economic zones. Foreign companies outsourcing to the country or providing Filipinos job opportunities gain tax benefits and exemptions.
- The Telecommuting Act recognizes digitalization and technology modernization as alternatives for flexible work arrangements. It allows BPO employers to offer telework under mutual agreements with their workers.
9. Ensure Economic Stability
The ample support the BPO industry receives from the Philippine government guarantees economic stability.
According to the Heritage Foundation’s 2022 Index of Economic Freedom, the Philippines scores 59.3. It makes the country the 89th freest economy worldwide and 18th among the 39 countries in the Asia-Pacific region.
Why does it matter?
A nation’s economic stability gives you confidence that you will get your expected returns on your offshoring investments. The index of economic freedom also guides you in deciding whether offshoring to a country is safe.
For instance, a country with a declining stability score means a BPO company operating within its economic zone might not give you positive outcomes and revenues. So removing it from your list of potential countries to outsource tech solutions to is your best option.
The Bottom Line
Many companies offshore to the Philippines because of cost reduction, skilled workforce access, and advanced technology optimization.
Cultural and operational compatibility and unmatched government support are the reasons they hire Philippine BPO firms. Data protection and economic stability further urge foreign businesses to delegate business processes to Filipino workers.
Do not hesitate to contact Unity Communications if you know why you should consider offshoring to the Philippines. Our team incorporates all the factors discussed to make your BPO journey remarkable.