Since the inception of the country’s first outsourcing headquarters in 1992, the Philippines has been a promising destination for business process outsourcing, especially for businesses in the United States, United Kingdom, and Australia. The country has been busy building an educated and skilled workforce throughout the last three decades, diversifying the BPO industry and deregulating the sector for foreign companies. India currently offers the highest volume of BPO services due to its sizeable population, making the Philippines the second largest BPO destination. But what the small country doesn’t have in numbers, it more than makes up for in skill, knowledge, and political advantage. These unique qualities make outsourcing to the Philippines a worthwhile business strategy for foreign companies looking to gain an edge in a merciless market.
One of the most difficult parts of outsourcing, particularly for smaller or mid-sized companies, is dealing with the laws, policies, and taxes of a foreign nation. Recognizing this, the Philippines’ government acted swiftly by deregulating the entire industry and thus attracting major financial players, such as LinkedIn, Netflix, and Google. The Philippines’ BPO industry requires a 0% tax – essentially a tax holiday for large companies constrained by high costs in the US. Additionally, BPOs in the Philippines are considered essential services in the country, and thus offer labour stability in uncertain times, including during the pandemic. Finally, because this industry is unregulated by the government, western companies can save big on benefits like retirement plans, health insurance, sick days, and paid time off, which may be required in western countries. Many call centres in the Philippines offer these services as perks of the job anyway, to attract the most qualified candidates. Still, because the business itself is not on the line for these benefits, they cost far less than an in-house employee’s benefits package and wages.
Low wages are also a large part of why companies are choosing outsourcing companies in the Philippines instead of hiring in-house workers. While the average call centre worker in the US and UK makes about AU$180 a day for the standard 40-hour week, workers in the Philippines make four times less – AU$60 a day. This is still, however, much higher than the minimum wage and is more than enough to sustain employees with the country’s extremely low cost of living. Because of this, outsourcing to the Philippines can cost far less while still providing a quality product or service.
Last but not least, call centres in the Philippines offer exceptional customer service and exemplary skills for these low prices. While call centre positions may be viewed as a part-time job or a means to an end in the US and UK, this is simply not the case in the Philippines. In fact, the majority of BPO workers in the country are graduates of top university programs with expertise in a diverse array of fields. When the Philippines’ government-funded BPO training and degree programs across its national universities, students flocked to the programs to gain a leg up in the hiring process. Many learned essential skills in communication, business operations, business software use, and English language and Western culture.
Thus, BPO workers in the country can be fluent and friendly English speakers, easily solve customer complaints and technical issues, and understand how a business works. In many ways, Western companies will gain the ideal employees while paying almost less than half the cost of an in-house staff member. For these reasons and many more, the Philippines is an ideal destination for outsourcing – and it may be soon that the country can take the number one spot in the industry.
