outsourcing philippines

Published on: September 2, 2023

Should You Start Outsourcing To The Philippines? A Realistic Guide For Business Owners (2023)

Yesh Quijano

Founder/owner

The establishment of the first business process outsourcing (BPO) contact center in 1992 marked the beginning of a journey that would soon position the Philippines as a global leader in the outsourcing industry.

Fast forward to today, and the Philippines proudly holds a significant 10-15% share of the global outsourcing market. Such is the country's prominence in the BPO sector that it has been crowned the world’s call center capital.

But while the call center industry is often the first thing that comes to mind when one thinks of outsourcing in the Philippines, there's another sector that's been quietly making waves: SEO outsourcing.

It might come as a surprise to many that the Philippines is home to a thriving SEO outsourcing industry. Business owners from across the globe are increasingly turning to Filipino professionals for their SEO needs, tapping into their expertise and benefiting from the cost advantages the country offers.

Get to know the Philippine BPO Industry

Business process outsourcing, commonly referred to as BPO, is a process that involves delegating specific business operations to an external service provider, in this case, a BPO company in the Philippines.

This approach allows organizations to focus on their core competencies while leveraging the expertise and efficiencies of specialists in other areas.

The Philippines, with its strategic location in Southeast Asia, has emerged as a strong BPO partner of choice for multinational companies. The seeds of this industry were sown in the 1990s, and it has witnessed exponential growth since its inception.

To put things into perspective, the BPO sector contributed $32.5 billion of revenue to the economy in 2022 - a major driver for economic growth - and it is expected to increase to $35.9 billion in 2023. Additionally, it is estimated that 1.7 million Filipinos are employed in over 1,000 BPOs nationwide. Those figures are expected to increase by 10% every year.

BPO stats

While the image of sprawling call centers might be the first thing that comes to mind when discussing Filipino BPO, the industry's scope is far more extensive.

Beyond call center operations, the Philippines is home to a plethora of BPO companies specializing in diverse areas. From IT solutions and payroll processing to healthcare services and innovative marketing strategies, Filipino BPO companies offer a wide array of services, catering to the multifaceted needs of global businesses.

9 Main Advantages of Outsourcing to the Philippines

The decision to outsource business functions is often driven by a combination of factors, ranging from cost considerations to the availability of expertise.

The Philippines, with its unique blend of cultural, economic, and infrastructural strengths, has become a preferred destination for many global businesses considering outsourcing. Here's a closer look at the advantages of outsourcing to the Philippines:

Large talent pool

The Philippines boasts a vast and diverse talent pool. This richness in local talent compared to other regions ensures that companies have a wide array of options when it comes to selecting the right fit for their business needs.

Highly Skilled and Diverse Talent Pool

The Filipino talent pool is not just vast; it's also highly skilled. Whether you're looking for IT experts, creative designers, or customer service professionals, the quality talent available in the Philippines is second to none.

More affordable than full-time employees

One of the primary drivers for outsourcing is lower operating costs. Hiring outsourced talent in the Philippines is often more affordable than maintaining full-time employees in many Western countries, without compromising on the quality of work.

Beyond just the direct savings on salaries, outsourcing to the Philippines allows businesses to operate more efficiently. Reduced overheads, infrastructure costs, and other operational expenses translate to significant cost savings in the long run.

Tip: Look for BPO services outside of Metro Manila and towards nearby provinces like Laguna (where I live). The cost of living is lower and therefore the rates might be lower as well.

Read: Know more about SEO rates in the Philippines

High English Proficiency

The Filipino workforce is renowned for its high English proficiency as Filipinos often learn English starting in pre-school. The younger generation of parents often communicate with their children in a mix of English and Filipino. This ensures smooth communication, reducing the chances of misunderstandings and errors.

Reduced legal liabilities and management issues

Outsourcing workforce management to Filipino BPO companies means fewer headaches related to legalities, HR issues, and other administrative challenges.

Long-term Government Support and Economic Growth

The Philippine government has been a staunch supporter of the BPO industry. The Department of Trade and Industry (DTI), through the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) tax incentives and special exemptions to foster an environment conducive to the sector's growth.

This long-term government support ensures stability and continued growth for businesses outsourcing to the Philippines.

Flexible to Time Zones

The geographical location of the Philippines offers flexibility across various time zones, making it easier for businesses to operate round-the-clock.

When I was still a BPO employee, my client and I only had a time difference of 4 hours which is a win-win for both of us: I can work regular hours (7AM-4PM - super convenient because I can commute 1 hour before the rush hour) and my client can monitor our work during their workday as well.

Robust Data Security And Privacy

Filipino BPO companies have made significant strides in ensuring robust data protection measures are in place. Central to this commitment is the Philippines' adherence to its Data Privacy Act (Republic Act No. 10173), which sets stringent standards for data protection, ensuring that personal information is handled with the utmost care and confidentiality.

The maturity of the Philippines' BPO industry has played a pivotal role in this regard. Years of experience and growth in the sector have enabled the country to establish strong guidelines and infrastructure dedicated to data security and privacy.

Challenges of Business Process Outsourcing to the Philippines

While the Philippines offers a plethora of benefits for businesses looking to outsource, it's essential to be aware of potential challenges to make informed decisions. Here's a closer look at some of these challenges:

There are Still Cultural differences

While the cultural compatibility of the skilled workforce of the Philippines and Western countries is high, there are still inherent cultural nuances.

The Filipino culture, for instance, places a high emphasis on family and community. This can sometimes translate to a different approach to work-life balance than what businesses from Western countries might be accustomed to.

For example, if your employee's mother-in-law's dog is sick, it's normal for your employee to take a leave (or half a day off) to drive her to the vet. And that's a perfectly reasonable thing for them to do.

Possible loss of personal touch or control

Outsourcing inherently means entrusting a part of your business operations to an external team. This can sometimes lead to a perceived loss of personal touch or control over certain processes, especially if not managed effectively.

Tip: Discuss with your offshore staff your expectations or train them on your current SOPs. Your remote workers will even appreciate you for the clear instructions (and expectations!).

High Rate of Turnover

Like many BPO hubs, the Philippines also grapples with a relatively high turnover rate. While the average Filipino citizen is dedicated and hardworking, the competitive and stressful nature of the BPO industry can sometimes lead to frequent job changes.

The Philippine government is doing its utmost best to keep this at bay, however. For example, the Philippine labor code requires local businesses to pay their employees an additional 13th month pay annually. 

Business Disruptions

Here are some business disruptions to consider.

Holidays: The Philippines has its set of national holidays (around 18 per year), which might differ from those in other countries. This can lead to potential disruptions in operations if not planned for in advance.

Geopolitical Issues: As with any country, geopolitical tensions or changes in government policies can impact business operations.

Natural Calamities: The Philippines, being an archipelago, is susceptible to natural disasters like typhoons and floods. Such events can temporarily disrupt services.

Expected Time Zone Differences

While the flexibility across time zones can be an advantage, it can also pose challenges. Synchronizing work hours and ensuring seamless communication might require additional planning and coordination.

Being aware of these challenges allows businesses to strategize effectively, ensuring that the outsourcing experience is smooth and beneficial for all parties involved.

Commonly Outsourced Business Functions

The BPO industry in the Philippines has evolved over the years, expanding its services to cater to a wide range of business tasks. As companies worldwide recognize the benefits of offshore outsourcing to the Philippines, several key areas have emerged as popular choices:

Lead Generation, Marketing, and Graphic Design Services

The Philippines, with its highly skilled workforce in marketing and design, has become a top outsourcing destination for these services. From crafting compelling SEO campaigns to designing visually appealing graphics, Filipino professionals excel in driving brand visibility and engagement.

Contact Center Ops

The foundation upon which the Philippine BPO industry was built, the contact center - locally known as a call center - operations remain a significant outsourced function. The country's proficiency in English and its affinity to Western culture make it an ideal choice for customer support and related services.

Information & Communication Technology (ICT) Services

The rapid advancements in technology have led to a surge in demand for ICT services. The Philippines, with its tech-savvy and adaptable workforce, offers a range of services, from software development to IT support, catering to the diverse needs of global businesses.

Healthcare

The healthcare sector has seen a rise in outsourcing needs, from medical transcription to health insurance. The Philippines, with its stringent training and adherence to global standards, ensures that healthcare services are delivered with precision and care.

Finance

Financial processes, from accounting to payroll, are critical to any business. Outsourcing these functions to the Philippines allows companies to leverage the expertise of professionals well-versed in global financial practices, ensuring accuracy and compliance.

Some Considerations

Outsourcing to the Philippines can be a strategic move for many businesses, but it's essential to understand the cultural and societal nuances to foster a successful partnership. Here are some key considerations to keep in mind:

Non-confrontational Culture: The Filipino culture tends to lean towards a non-confrontational approach. This means that, at times, professionals might avoid direct disagreements or conflicts, opting instead for more subtle ways of expressing dissent or concerns, or even agreeing

While this can foster a harmonious working environment, it's crucial for businesses to encourage open communication and ensure that any feedback or concerns are genuinely addressed.

Family Comes First: In the Philippines, family holds a central place in societal values. This means that events or situations involving family often take precedence over work commitments. Understanding and respecting this cultural aspect can help in building a strong and empathetic relationship with the outsourced team.

Job stability is a priority: The average Filipino worker values job security highly. While they are dedicated and hardworking, providing them with a sense of stability and long-term engagement can lead to increased loyalty and commitment to the organization.

Employee benefits: Just as with job stability, Filipino professionals value the benefits that come with a job. Offering competitive benefits, not just in terms of salary but also health, leaves, and other perks, can make a significant difference in attracting and retaining top talent from the Philippines.

Mistakes to Avoid When Working with Filipino Outsourcing Providers

The Philippines, as a premier outsourcing destination, offers a plethora of opportunities for businesses seeking to leverage offshore outsourcing. However, to ensure a successful partnership with Filipino outsourcing companies, it's essential to be wary of common pitfalls:

Low prices or rates shouldn't be the end-all-be-all.

While cost savings is one of the primary drivers for outsourcing, it's crucial to remember that low prices or rates shouldn't be the end-all-be-all. Opting for the cheapest provider without considering the quality of services can lead to subpar results and, in the long run, might cost more in terms of revisions and rework.

Not checking work samples of the workers

It's a mistake to onboard an outsourcing company without first viewing their work samples to assess quality. Samples provide a tangible insight into the company's capabilities, expertise, and the standard of work you can expect.

Not evaluating providers beyond their online presence or Google rankings.

Most outsourcing companies invest in a robust web presence. However, evaluating providers should go beyond just their online footprint. It's essential to consider factors like client testimonials, case studies, and direct interactions to gauge their reliability and expertise.

Looking for an SEO provider? Check out our guide on how to avoid SEO scams here.

Companies That Outsource to the Philippines

Many foreign companies consider the Philippines their outsourcing destination of choice. Some notable companies that have outsourced or set up operations in the Philippines include:

  • Accenture
  • JPMorgan Chase & Co.
  • IBM
  • Shell
  • American Express
  • ANZ
  • Citi

How To Find Your Ideal Outsourcing Partner

Finding the right outsourcing partner is akin to forging a strategic alliance. The right partner can propel your business to new heights, while a mismatch can lead to setbacks. Here's a step-by-step guide to help you navigate the process and find your ideal outsourcing partner in the Philippines:

  • Define Your Needs: Clearly identify the services you, as a business owner, want to outsource.
  • Research and Shortlist: Begin with a broad search, narrowing down to BPO service providers specializing in your needs.
  • Ask for Recommendations: Seek advice from peers who've previously outsourced to gain insights.
  • Evaluate Their Expertise: Review portfolios and case studies to gauge proficiency.
  • Communication is Key: Ensure the offshore team is responsive and understands your requirements.
  • Visit in Person (If Possible): An on-site visit can provide a deeper understanding of their operations.
  • Discuss Pricing and Contracts: Understand the pricing models and ensure clear contract terms.
  • Start with a Pilot Project: Test the waters with a smaller project before a full commitment.
  • Review and Iterate: Continuously assess the partnership to ensure alignment with your goals.

Choosing the Right BPO Partner in the Philippines

As a top outsourcing destination, the Philippines has a myriad of BPO service providers, making the selection process challenging. When considering offshore outsourcing, it's essential to find a partner that aligns with your business values, goals, and operational needs.

Expertise and Proficiency - Firstly, delve into the expertise of the BPO provider. The Philippines boasts a highly skilled workforce, but ensuring that their expertise matches your specific requirements is paramount. Review their portfolios, client testimonials, and case studies to gauge their proficiency and experience.

Effective Communication - Communication is another pivotal factor. Your offshore team should be responsive, transparent, and proactive in addressing your concerns. Regular interactions can foster a harmonious working relationship, bridging any potential cultural or operational gaps.

Scalability and Flexibility - Lastly, consider the scalability and flexibility of the BPO provider. As your business grows, your outsourcing needs might evolve. Choosing a partner that can adapt and scale alongside your business ensures a long-term, fruitful collaboration.

Outsourcing to the Philippines: Final Words

As the world leans more towards globalization, the Philippines stands tall as a preferred destination for outsourcing. It offers the perfect blend of a high-performance workforce and cost-effective solutions, making it an invaluable partner for businesses worldwide.

Ready to start SEO outsourcing to the Philippines? Book a free strategy session by clicking the button below:

Want a more profitable business in 6 months? 🚀

Start your SEO Campaign Today

6 months from now, you'll look back and say, "I should've done this sooner!"

>