Thinking of outsourcing to the Philippines?
With great talent, lower salaries and a supportive government, it’s no surprise that the Filipino outsourcing industry is booming!
In this article, we’ll highlight everything you need to know about outsourcing to the Philippines. We’ll cover why you should outsource to the Philippines and also show you how to manage your outsourced staff!
Here’s what we’ll cover in this article:
- The 3 Key Benefits Of Outsourcing
- 5 Benefits of Outsourcing To The Philippines
- The Drawbacks Of Outsourcing To The Philippines
- How To Manage Your Filipino Outsourced Staff
- Top 5 Outsourcing Providers In The Philippines
- How To Outsource To Individual Freelancers
Let’s get started.
The 3 Key Benefits Of Outsourcing
Before going into why the Philippines is perfect for outsourcing solutions, it’s important to cover why you should outsource in the first place:
1. Improves Processes and Services
One of the key benefits of outsourcing is that it helps you instantly improve any business process for better economic growth.
Think about it.
You’re not wasting time and resources training your current staff to handle these activities. Instead, you’re directly leveraging experts for the task.
By outsourcing your business activities, you’re not only saving money, you’re optimizing them too!
2. Helps You Focus On Core Competencies
Tons of companies outsource activities to give them more time and resources to focus on their core tasks. For example, if you’re a social media agency, you can outsource your data entry services to help you focus on building social media strategies for your clients!
This way, you can focus solely on your core activities while ensuring that the non-core tasks in your roadmap are performed as well.
3. Lets You Offer 24×7 Services
Another great thing about outsourcing around the world is that you can always have someone working.
For example, if you’re a US-based company, your outsourced Filipino staff can handle customer calls when you’re asleep! This ensures that you’re able to cater to customers 24×7 without overworking your employees and compromising on quality.
5 Benefits of Outsourcing To The Philippines
It’s no secret that the Philippines outsourcing industry is one of the best world. Here’s a closer look at why:
A) Cost Savings
Lower costs are one of the main reasons why business owners turn to outsourcing and offshoring their work.
Remember, countries like the Philippines have a lower cost of living – which translates into lower salaries. In most cases, you’d be paying a fraction of the amount you’d pay someone you hired from the United States!
However, lower labor costs aren’t the only way to save money.
Sure, the cost of hiring people there is typically half than in developed countries. However, that isn’t the sole reasons for companies turning to the Philippines as an outsourcing destination.
The Philippines is also great because of its favorable tax laws.
To attract more companies, the Philippines government introduced the Special Economic Zone Act. This introduces the chance for foreign companies to gain tax benefits and exemptions like:
- Four-year corporate income tax exemption.
- Local tax and permits exemptions.
- Duty-free import of equipment, raw materials, supplies, etc.
- Permanent visas for foreign investors
On top of this, you can also register your business with the Philippine Economic Zone Authority (PEZA) to receive additional incentives and privileges like tax exemptions and lower import fees.
B) Access To Quality Talent
Some people worry that outsourcing results in a lowered quality of work.
Luckily, that isn’t the case for Filipino workers.
Every year over half a million students graduate and come out to the workforce from local colleges. The government also sponsors several university courses specifically focused on skills needed for the Philippines’ BPO industry.
All of this adds up to an impressive literacy rate of 97.5% (larger than other countries in the BPO sector like India) and a continuous flow of new workers highly prepared for your outsourcing needs.
C) English Proficiency
Outsourcing to a foreign country can often result in a potential language barrier.
Fortunately, that’s where the Philippines has the edge over other business process outsourcing giants like China and India
With English as a national language alongside Filipino, the Philippines are actually the 3rd largest English-speaking country in the world.
This results in the English language becoming part of their everyday vocabulary – making it easier for them to understand slang and colloquial phrases. That’s why Filipino workers are perfect for your call centers – they’ll have no issue conversing with your customers!
D) Data Privacy and Security Regulations
Another issue with outsourcing is that it could put your data’s security at risk. However, to combat this, the Philippine government introduced various policies to safeguard data privacy.
In 2012, the Data Privacy Act brought the Philippines’ data policies to international standards. With this act, any individual or company in violation of the Privacy Act can face imprisonment for up to six years and be fined an amount between $20,000 and $100,000.
In fact, according to the IBPAP (the IT & Business Process Association of the Philippines), this privacy act is “one of the toughest data-privacy legislations in the region”. With such strict laws in place, you can be sure that your data will never reach the wrong hands!
E) Stellar Track Record Of The Filipino Outsourcing Industry
While some countries have just started specializing in outsourcing, the Philippines has been at it since 1992. The Philippines outsourcing industry currently provides almost one and a half million jobs – with that number increasing every year!
This translates into a culture that’s accustomed to outsourcing practices and policies – making it easier for you to get started.
The Drawbacks Of Outsourcing To The Philippines
While the Philippines is a great outsourcing destination, there are a few drawbacks to outsourcing there:
A) Communication Issues
While most Filipinos are fluent in English, you could still face communication issues when working with them.
Coordinating with them can be tough due to time zone differences and the limitations of virtual communication. Remember, while internal communication tools like Slack can help you get your message across, there’s nothing like explaining something to someone over a video call! But time zone differences would make them difficult to organize.
Moreover, communication issues also happen because of cultural differences. These have little to do with language proficiency and are more centered around working styles, and varying perceptions about the ‘right’ ways to communicate in business.
B) Monitoring Issues
This is another major issue with outsourcing in general.
As you’re not in the same office space, it can be hard to monitor your outsourced staff. There’s no easy way for you to keep a check on their productivity levels to ensure that they’re actively working on your projects.
Additionally, as most outsourcing professionals charge by the hour, it’s hard to determine if a project actually took that long. For example, your BPO provider could bill you for eight hours when a project only took five hours!
Luckily, there’s a powerful way that helps manage all of this:
How To Manage Your Filipino Outsourced Staff
All you need is a performance monitoring tool like Time Doctor!
What’s Time Doctor?
Time Doctor is a powerful performance tracking software used by Apple, PwC and Verizon. It helps you track the time your outsourced team is spending on different projects, boost their productivity and even pay them!
Here’s a closer look at what Time Doctor can do for you:
A) Keep Track Of Your Outsourced Staff’s Activities With Detailed Reports
With TimeDoctor’s powerful reports, you’ll always know what your employees are working on and how long they take to complete a task.
With Time Doctor’s Projects Report, you get a detailed breakdown of hours spent by your outsourced staff on each project. As these records are accurate to a second, so you can use it as a reliable record to pay your outsourced staff on an hourly basis.
B) Prevent Your Outsourced Staff From Getting Distracted
You’re not paying your outsourced staff to watch Youtube videos, right?
Whenever they access an unproductive site like Facebook or YouTube during work hours, Time Doctor shows them a pop-up asking them if they’re still working or not. This gentle nudge is usually enough to get them back to work!
C) Prevent Inactivity At Work
You want your workers to be actively working during their work hours, right?
But how do you ensure this when you’re thousands of miles away?
Time Doctor’s inactivity tracker automatically pauses the timer after three minutes of no keyboard or mouse movement. This way, they can only log active hours as hours worked!
Note – Time Doctor does NOT track what keys were pressed. It only checks if any keys were pressed or not.
D) Pay Your Outsourced Staff With Built-In Payroll Features
Time Doctor has a built-in payroll feature to streamline the process of paying your outsourced staff.
Time Doctor integrates with TransferWise, PayPal and Payoneer to help you pay them immediately. Alternatively, you can also use a custom payment method for your Filipino outsourced staff.
The Payroll feature is also fully customizable! It lets you select:
- The payment method – select a default payment integration or use other methods to pay your virtual assistant.
- The payroll period – select from a list of default values or set a custom payroll period.
- The rate type – specify a fixed payment rate or opt for an hourly rate as per your virtual assistant’s payment policy.
- The rate per hour.
- The currency – choose from a list of global currencies.
Top 5 Outsourcing Companies In The Philippines
Most people who outsource to the Philippines use outsourcing companies. These are companies that have tons of skilled professionals to help you with your needs. All you have to do is contact them, give them your requirements and they’ll assign the right people to your project!
As you’re directly leveraging a company you won’t have to worry about finding individual freelancers for your activities.
Here are 5 of the best-known outsourcing companies in the Philippines:
Founded by two entrepreneurs in 2010, Arcanys focused on software developer needs. Originally started as a simple outsourcing service, Arcanys has evolved into a powerful engine for launching new business ideas to make them a profitable reality.
- Digital Development: Arcanys is a technology BPO company that can handle all of your development and programming needs. They can develop mobile and web apps, handle design and test and update products.
- IT Support: Arcanys can also provide your company with reliable IT support.
EMAPTA is an outsourcing company from Australia with over 2,000 Filipino workers employed.
Unlike a lot of other companies, this service provider lets you select your own team for a more tailor-made outsourcing approach.
- Sales and Marketing services – From SEO to direct sales calls, EMAPTA can handle it all.
- Back-office services – Depending on your needs, you hire customer support services and all sorts of data management services.
- IT development – Offers all types of mobile, SaaS and web application testing and development.
- Finance and Accounting – EMAPTA can handle everything – from financial planning and general accounting to personal debt collecting and invoicing.
Outsourced is a Philippines company that pays special attention to security. They have an ISO certification and have strict regulations and extensive staff training.
- IT services – With an IT-BPO certification, Outsourced can handle basic IT needs and high-end services like VR and AR development.
- Contact center services – With tons of call centers all over, Outsourced is a reputed name in the call center industry.
- Online marketing – Outsourced can handle your online marketing, SEO and data analytics needs.
- Creative services – Outsourced can handle any creative needs you may have, from simple web development to creative writing and animation.
4. Sourcefit Philippines
Sourcefit Philippines offers a wide range of services while remaining completely transparent about their equipment and security processes.
- Marketing support – Be it email, social media or content marketing, all inbound and outbound marketing channels are covered by Sourcefit.
- Creative services – Sourcefit offers all kinds of creative services, ranging from simple graphic design to animation..
5. KMC Solutions
KMC is not only one of the biggest outsourcing companies, it’s also one of the largest providers of coworking spaces and private offices. With presence in cities like Makati, Quezon, Taguig and many more, KMC can handle all your outsourcing needs.
- Staff Leasing – KMC gives you a free initial consultation to talk about your needs and then hires and structures a custom team for you according to your needs.
- HR & Payroll Management – KMC can handle all your HR and Payroll needs.
How To Outsource To Individual Freelancers
While there are tons of Filipino BPO providers to help you with your needs, you can always outsource to individual freelancers too.
As you’re directly outsourcing to a freelancer, you benefit from:
- A larger talent pool to select from as you’re not limiting to a BPO provider’s staff
- Being able to zero-in on someone who has the perfect skill-set for your projects
- Potentially lower costs as you’re directly hiring an individual instead of leveraging a company
The process of hiring an individual Filipino freelancer is fairly simple.
All you have to do is:
- Go to freelance marketplaces like Upwork and Freelancer
- Sort through the various profiles on these sites
- Find a freelancer you like and reach out them
- Negotiate the project deliverables and payment rate
- And let them get started with the work!
Tip – It’s always a good idea to ask them to use a performance monitoring tool like TimeDoctor to monitor their time usage when working on your projects. This ensures that they’re focused and bill you accurately.
For a more detailed look at how to hire a freelancer, click here.
Also, if you’re looking for a list of websites to hire individual freelancers from, click here.
Outsourcing to the Philippines is one of the easiest ways to save money and optimize your processes.
With a talented workforce and a supportive government, you’ll have no difficulty leveraging the Philippines to boost the growth-rate of your business in no time!