If you’re looking to reduce labor costs, improve efficiency and scale your business, offshoring can offer you a lot of advantages. Plus, it can also allow you to improve both your internal and external customer service by increasing your capacity.
However, not all countries are equal when it comes to offshoring.
There are many different factors that affect whether or not a country will be a good offshoring destination – such as the economic climate, culture, work ethic, education levels and more. Some countries have all the right elements, and when these elements combine together it creates the perfect environment for a booming offshoring industry.
The Philippines is one of these countries. In fact, all factors considered, the Philippines has a reputation for being one of the best countries in the world for offshoring talent. Over the last 10 years, the Philippines has gained a strong position in the top 10 countries worldwide for business process offshoring for a number of reasons.
Manila (at #2) is the only non-Indian city to make the list of the Top 5 Outsourcing Destinations in the World, according to Tholons, a US-based strategic advisory firm. It beat out Mumbai for the second place spot in the rankings.
In this article, we’ll look at some of the reasons why the Philippines is such a great option for offshoring and the many advantages of setting up an overseas team in this gorgeous Southeast Asian country
Offshoring vs. Outsourcing
Before we dive into the advantages of offshoring with talent from the Philippines, we should quickly clarify the difference between offshoring and outsourcing. Many people confuse these two terms and although they might sound similar, they are actually quite different.
Outsourcing is when a company negotiates a contract with a third party company to perform a certain function.
Offshoring is when a company hires workers to perform in-house jobs in another country.
To put it simply, with offshoring you will be working with an extension of your own office in another country. With outsourcing, you’re shifting the work to someone else’s company.
One of the main differences between these two different options is the amount of control the company has over the team. With offshoring, the offshoring firm hires the talent for you and the talent is dedicated to your company. This means that you have control over every step of the process and you have a say in how the work is done.
When it comes to outsourcing work, you’re working with a third party agency and you have less control. The workers may be freelance or independent contractors, and you won’t be able to have any say over the systems and processes they use.
There are pros and cons for both offshoring and outsourcing, depending on the needs of your company. To learn more about the difference between outsourcing and offshoring and decide which one is right for you – check out our blog post. “What’s the Difference Between Offshoring and Outsourcing Labor?”
Typical Jobs for Offshoring to the Philippines
When it comes to offshoring, what are the most common types of jobs done by staff in the Philippines?
Here are a few of the most typical jobs:
Accounting and CPA
Digital & Email Marketing
Social Media Marketing
CAD and Graphic Designers
Data & Analytics
These are just a few of the most common jobs, but this list isn’t inclusive and there are many other possible types of tasks that could be done by offshore staff in the Philippines. The offshore talent in the Philippines have diverse experience and education, so there’s a good chance you’ll be able to hire a great team who meets your needs.
What Are The Advantages of Philippines Offshoring?
Why is the Philippines considered one of the best countries in the world for offshoring? It’s a combination of several economic and cultural factors that come together to make it such a fantastic option.
Let’s look at some of the reasons why this destination is at the top of the list.
Offshoring your operations in the Philippines will allow you to enjoy low costs and operate for much less than it would cost in your home country. This is one of the main advantages of offshoring and it can save you a huge amount of money as you scale your business.
The cost of living is very low in the Philippines, so wages are lower as well. You’ll be able to hire great talent at very affordable wages, so that you can grow your team without a huge investment.
The lower cost of wages doesn’t just apply to administrative jobs, but to highly specialized jobs as well. You’ll be able to hire talented professionals in the fields of inbound sales, graphic design, telemarketing, strategic management and more.
Also, the cost advantage applies to other business expenses as well – such as utilities, office rental, supplies and third party services. When you add up all the savings, it really makes a difference!
Stable Government and Economy
One of the risks associated with offshoring is whether the economic and political situation in your chosen country is stable. You may be locating your business in an affordable country, but local political unrest will be risky and disruptive to your operations, and therefore damaging to your profits.
The good news is that the Filipino government is stable, and the economy is strong. The political situation in the Philippines is peaceful, so you won’t have to worry about political unrest getting in the way of your business operations. The government of the Philippines is welcoming to foreign investors and actively invests back into their infrastructure and technology to support the outsourcing industry.
It’s one of the fastest growing economies in Southeast Asia. GDP growth in the Philippines has averaged about 6.4% every year between 2010 and 2019 and the offshoring industry has solid support from the government. The Covid-19 pandemic put some stress on the country’s economy, of course (like it has everywhere) but the government has rolled out response measures in the form of two national stimulus packages.
Communication is always important when you are hiring an offshore team. Fortunately, language barriers won’t be an issue when you are offshoring in the Philippines.
English is an official local language in the Philippines and pretty much all young people in the Philippines learn to speak it. It is the legal language of the country when it comes to law and constitution. In fact, the Philippines is one of the largest English speaking countries in the world and the country boasts a 94% English literacy rate. According to the EF English Proficiency Index, the Philippines ranks 27th out of 100 countries, and 2nd in Asia.
This means that your team will speak excellent English and you’ll be able to communicate with them smoothly. The level of English is so good that your offshore team will even be able to offer call center customer service in English to a high level of quality. Since most Filipino workers are university educated in English, they have a natural English accent that is very clear and easy to understand.
Great Work Ethic
Filipino staff are known for their amazing work ethic and will work hard to exceed your expectations. They have a strong moral code and it is built into their culture to be trustworthy and to complete tasks to a high standard of quality.
Since the offshoring industry has been operating in the Philippines for over 20 years already, many workers will already have experience working for foreign companies. So, they will have a good understanding of what’s expected of them in the workplace.
Filipinos generally have a tradition of respect for the elders in their family, as well as for colleagues, superiors, and clients in the work environment. They are eager to learn and are self-motivated and can work well independently – which is good because you may not always be there to monitor their progress.
Similarity in Culture
Sometimes offshoring can be difficult due to a culture clash. If the cultural values and traditions between your country and the country where you are outsourcing are too different, then this can lead to misunderstandings and even conflicts.
The Philippines has had a strong American influence and as an American colony for 50 years, which means that they have a good understanding of Western culture and workplace etiquette and standards. The Philippines and the United States have a shared history, which is why English is the main language used in law, education, government, and business. The Philippines also modelled its government institutions on those of the USA.
When you work with a Filipino offshore team, you’ll notice some of the cultural values they share with the average American worker – such as creativity, adaptability, and a willingness to work together as a team.
The talent pool in the Philippines is highly educated and skilled. Education is an important part of Filipino culture, and this country has an above average education rate.
According to Statista, of the 3.5 million Filipino migrant workers, 1.89 million are considered highly educated. That is 53%! Public and private Filipino universities produce approximately 700,000 graduates per year, many of these with degrees in accounting, medicine, business administration, IT, marketing, computer science and other specialized areas.
As well as being well educated, in Filipino culture you’ll also find that being eager to learn is a common trait. Education and learning are highly valued and your team will be motivated to improve their skills and performance. If you offer training or skill enrichment programs, they will likely attend enthusiastically and put effort and dedication into learning.
Excellent Customer Service
Customer service is valued in Filipino culture and they have a warm and friendly manner, with excellent communication skills. Filipinos are well known for their excellent hospitality and empathy, which make them naturally skilled at customer service roles. This includes call center roles, managing an online community or running an online chat.
In general, most Filipinos have a lot of patience and kindness for others. Their culture values conflict resolution and harmony, so they will take the time to resolve issues and complaints and make sure the customer feels heard and cared about.
Even if customers are confrontational or aggressive, the natural instinct of your Filipino team will be to handle the situation with grace and diffuse the conflict. They will take the time to treat your customers right, in a calm, professional and diplomatic way.
You Can Offer 24/7 Support
Due to the time zones, your team in the Philippines can work opposite hours to your existing team in your home country, so you can provide your customers with 24/7 support.
Imagine being able to offer your customers a 24/7 help line! The support offered by your Filipino team will be of an incredibly high standard of excellence. So, no matter when your customers call in, they will be sure to get top notch customer service. (That’s one way to set your brand apart from the competition!)
Even if you’re not offshoring for customer service, the time zone difference can still be an advantage for other tasks. You can give your offshore team a task at the end of your workday, and it will be done and waiting for you in your inbox by the next morning. This saves a lot of time and allows your company to run very smoothly.
Excellent Tech Connectivity
One of the challenges with setting up international offshoring is that not every destination has the same level of tech connectivity and infrastructure as the USA. In some locations, you might experience slow internet, power outages and limited technology.
Fortunately, in the Philippines, this is not the case. In the major Philippine cities, you’ll have the same level of technology and connectivity that you would find in any world city.
Set up your offshoring office in Manila or Cebu, the main cities, and you’ll enjoy excellent infrastructure including power, water, roads and telecommunications. You can expect to have similar tech connectivity to any major city in the US, for a fraction of the operating costs.
Plus, there’s also 24/7 internet connectivity, with a primary network consisting of fiber optic cables and satellite as backup. This wasn’t always the case, but it is something that has improved dramatically over the past few years.
As offshoring continues to grow as one of the most prominent industries in the Philippines, this high level of infrastructure will soon expand to other cities and offer you even more options for setting up your offshore offices.
Business Process Outsourcing Support
The BPO Industry in the Philippines has grown by leaps and bounds over the last few years, making it one of the largest industries in the country. This industry makes up 10% of the country’s GDP, making it the biggest source of private employment overall.
The Government has even set up special economic zones, which are managed by the Philippine Economic Zone Authority and offer tax incentives and assistance to encourage foreign investment. Several laws have been passed that are designed to protect the welfare and safety of BPO professionals, and the government has also set up the National Information and Communications Technology council.
The government of the Philippines has also set up numerous incentive programs, such as tax exemptions, tax holidays and simplified export and import procedures. All of these programs are designed to encourage more foreign investors to do business in the country.
These are just a few of the reasons why so many companies have chosen to offshore in the Philippines. This beautiful Southeast Asian country has so many factors that make it an excellent choice for offshoring your operations.
If you decide to start offshoring in the Philippines, you’ll be in good company. Some of the world’s biggest and most successful major international companies have already set up offshoring centres here, such as Virgin, Hewlett Packard, JPMorgan Chase Bank, Bank of America, Wells Fargo, Deutsche Bank, Jetstar and Telstra.
Are you ready to start offshoring to the Philippines and taking advantage of everything this beautiful Southeast Asian country has to offer your business? Offshoring is especially beneficial if you are a small-to-medium-sized business, as it will allow you to hire skilled workers and give you the resources to compete with larger organizations at scale.
We can help you hire a talented team of Filipino professional staff so you can build profitable growth. Contact us at Doxa7 and we can have a chat to discuss your needs and find the perfect solution for you.