In BPO, KPONovember 18th, 2013

Why Outsource to the Philippines

Posted by on November 18th, 2013 | No Comments »

Rapid and huge progresses in the field of communication and information technology (IT) have allowed several changes in the working landscape. Whereas many people back then troop to their workplace as any regular employee would, advances in the way people communicate on a global level have ushered new occupations and positions that allow people to work regardless of geographical location and time zones. While the concept of an employee being able to provide high quality output to a company anchored in the other side of the world is nothing new, people working at home is something novel yet has proven to be cost-effective option for many businesses. With a laptop or a computer and a reliable internet connection, one has the tools needed to succeed as a virtual worker.

Online work has proliferated significantly in the past years and job titles like “virtual assistant” (VA) and “web content writer” are now coveted positions in the virtual workplace. There are other occupations that are normally found within the office but now are being outsourced as well, such as web developers and programmers. But more than that, technological advancements have also allowed people to work right in the comfort of their homes. The number of home-based and freelance workers toiling in the various industries, such as IT, global communication, web design, and customer services/relations, has rocketed past any known ceilings. But even with the lack of or absence of a regular working environment that a typical office provides, many of these home-based employees have reported to perform well and even proved to be extremely valuable to their international employers.

Why Outsource?

The obvious reason for most companies why they outsource the bulk of their work to other countries is to cut down costs. Outsourcing and, to a greater extent, offshoring, significantly reduces labor and operations costs, from salaries down to building and office maintenance and expenses on utilities. Most see the bottom line of outsourcing as a means to gain significant savings. While it is true, there is a lot more to all that. Looking at the big picture, outsourcing as a cost effective solution is just a tip of the proverbial iceberg why many businesses outsource. Here are some of the reasons compiled by mega corporations why they prefer to delegate jobs to third parties:

  • Delegating work to outsourcing firms/parties allows managements to focus on core businesses and activities such as product innovation, research, etc. Outsourcing frees up time for top personnel to devote their skills and talents to higher and more important priorities;
  • Outsourcing frees up funds and other internal resources that can be channeled for other purposes and benefits;
  • Outsourcing affords many corporations the access to a vast selection of world-class talents and skills not available internally. These talented individuals and other resources often represent optimal solutions to issues and problems experienced by most companies such as low number of qualified personnel to perform specific tasks;
  • By outsourcing, many corporations are able to expand their presence to foreign countries and explore new markets. Such move spells positively for many businesses that aim to introduce their brands, products, and services to an untapped but potentially rich and very rewarding client base. This also means that businesses allow for speedier delivery of their services and products to the end users;
  • Some corporations see outsourcing as a means to experiment untested business solutions and services. This move entails fewer risks for the businesses if experimentation end up in failure but allows them to gain from the benefits if the testing proves to be successful.

There are those who argue that outsourcing is a risky maneuver that will have adverse effects not only on the quality of production output and services, but on a company reputation as well. Though those who oppose outsourcing do have some valid points, many mega corporations in the world that have outsourced jobs to external parties have experienced tremendous and steady business growth. Outsourcing has now become a standard, an essential element in the business world. Quite a few leaders in several industries have become visible evidence of why outsourcing works. And by the looks of how the business landscape of today revolves, outsourcing is here to stay.

The Filipino Factor

The Philippines is one of the world’s top outsourcing destinations in the world. In fact, when it comes to who gets most of the offshored jobs from the IT, customer service, and BPO industries, it has always been a tug-of-war between the Philippines and India.

India has the advantage in numbers, as evidenced by the country’s large workforce. According to IndexMundi Asia, there are about 484 million Indians aged 25 to 54 that can be tapped for outsourced works.

Philippines, on the other hand, only have 38 million workers in the same age bracket. While Philippines cannot match India’s sheer size of its workforce, many international businesses prefer Filipino employees mainly because they provide better services, which then lead to favorable results. In fact, over the past five years, India lost about 10% of voice-related outsourced jobs on a global scale, whereas more and more employment opportunities in form of online work are pouring in to the Philippines and fast.

In a report released by the Information Technology and Business Process Association of the Philippines (IBPAP), the Philippines’ IT sector has been enjoying a huge growth in terms of employment. There has been growth of 24% in the information technology and business process management (IT-BPM) industry since 2011.A total of 776,794 Filipinos have been working in the IT and business processing sector, 137,066 of which were added at the end of 2012.

The Philippines has a vast pool of highly skilled and talented workers. But more than just skills and expertise, one of the biggest reasons why many international companies select Filipinos over Indians and other nationalities has been the Filipino’s ability to easily overcome the language barrier. In more instances, it does not even feel that language has been an obstacle at all. Many Filipinos are already good communicators in English, both spoken and written forms. On the other hand, other countries may have the tools and expertise but communicating in English proved to be a huge bane. The inability to speak in fluent English for some nationalities, particularly India and China, greatly hampers their potential as top players in the outsourcing world.

Dheeren Singh, a top official for a human resources recruiting firm in India, says that many of their clients have a hard time understanding them because of their accent when they speak in English. Support from the government has also been a huge factor why outsourcing to the Philippines is booming. For one, several legislations are in place to protect the interests of both employer and employee, such as the Data Privacy Act. This act is focused on helping the BPO industry in the Philippines by placing international data privacy standards on the huge amount of data handled by BPO companies, like banking information and other sensitive details. Manila and Cebu have been identified as the major hubs for outsourced works in the Philippines. In fact, THOLONS, a research and survey firm, recently released a report saying both Philippine cities have ranked in its Top 10 Outsourcing Destinations in the World. Manila placed third whereas Cebu ranked eighth on the list.

India still has a grip on six spots; including the top two cities in the list, Bangalore, followed by Mumbai. Aside from India and Philippines, only Ireland (Dublin), and Poland (Krakow) are the non-Asian countries in the top 10. That said, other cities in the Philippines are now slowly becoming centers for BPO and, to a certain extent, home-based virtual work. Davao, Cagayan de Oro, and Iligan, all located in the southern island of Mindanao, are slowly evolving into major destinations for international firms and organizations in search for virtual employees and freelancers. Simply put, the Philippines is and is poised to remain a top player in the outsourcing business.

Why choose Philippines for your outsourcing needs?

happy filipino workers

The Philippines has undoubtedly branded itself as a major force in the outsourcing landscape. As a nation, the Philippines has 92% literacy rate. It is also home to top universities in the world and have produced graduates in fields that comprise most of the industries that have outsourcing as an integral component of their business strategies. Filipinos have leap and bounded professional areas such as multimedia, website design, computer programming, software development, and animation to name a few. With all that being said, many say that the Filipinos’ ability to speak and write in English is a deciding factor why US-based companies select Filipinos over other nationalities.

Communication is key in all business endeavors. Understanding between employer and employee and all other parties is vital in any and all business transactions. The Filipinos ability to communicate well in English, both oral and written, has been one of the major reasons why international employers pick Philippines as a major outsourcing destination. Being able to engage clients in casual conversations allows opportunities for Filipinos to present suggestions, discuss effective solutions, receive and relay instructions well. At the end of the day, Filipinos deliver high quality output because their communication skills allow them to understand the project, the clients, and the goals. But more than just the absence of the language barrier, there are plenty of good reasons why you should pick Filipinos as part of your virtual workforce.

The Philippines presents a vast pool of talented and very qualified professionals particularly in the IT and BPO sector. Many Filipinos are certified by various IT organizations and software companies, which equates to competence in many aspects as far as information and technology are concerned. Filipinos are very much conscious of technological innovations. This consciousness positively represents the Filipinos’ strong footprint in technology-related industries such as software development, computer production, and Internet and communications technology. In general, Filipinos are very flexible and are ready to accept criticism as part of improvement.

A Filipino professional is highly knowledgeable and competent in his or her chosen field of expertise and can easily work solo or fit a role in a team if the project requires it. As Jerry Rapes, CEO of Exist and PSIA marketing chair, once said, Filipinos work with both sides of the brain working. In short, Filipinos are creative and analytical at the same time. One can argue that other nationalities can still provide quality work, hold the same international standards and qualifications, and be analytical and imaginative simultaneously. So what makes the Filipino professional different and a tad better from the rest of the pack?

In a short answer, it is the culture.

Filipinos thrive in a pattern that closely resembles American culture. From language, down to casual street expressions, and office environments, Filipinos can easily blend in with the American way of living compared to close Asian neighbors such as China and India, other outsourcing giants. A Filipino can easily digest a Hollywood production without subtitles compared to what India or China can offer. It is the same thing with outsourcing. Filipinos are so rooted in a culture that is closely patterned to Western concepts that it becomes second nature for professionals to work in a system espoused and practiced by many US-based employers. And this cultural closeness translates to successful business campaigns, maximized use of talents and skills, and high quality production.

Conclusion

Modern technologies have now enabled many big corporations and small to medium size businesses to outsource responsibilities to external agencies. Outsourcing has now become an integral part of a business’ strategy due to a myriad of reasons, ranging from saving on costs to expanding their reach to newer markets. The Philippines has been viewed as a major outsourcing destinations, mainly because of workforce comprised of highly competent and qualified professionals from various fields such as multimedia, website design and development and internet technologies to name a few. However, it is the Filipinos’ excellent command of the English language and their ability to communicate well with their superiors and peers why many US-based businesses prefer to pick Filipinos as part of their virtual work teams. Also, Filipinos can easily adapt to Western cultures. This enables Filipino professionals to work smoothly in a structure that features western concepts of time management, efficiency, and productivity; and makes them more productive and the results to bear more fruits.

To learn how you can find the best Filipino Virtual Assistants to outsource, click here.

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