Outsourcing to the Philippines: What’s In It for You?

Organizations from around the world outsource tasks to companies in the Philippines, such as web development and graphic design. Many global companies are confident in high-quality and affordable Philippines-based outsourcing services, which include IT and digital marketing.

Outsourcing Statistics 2024 revealed that nearly 92% of the Global 2000 companies rely on IT outsourcing. In particular, the Philippines is a choice destination for its affordable labor costs, skilled workforce, and English fluency.

The Philippine Outsourcing Industry

The Philippine Business Process Outsourcing (BPO) industry emerged in the early 1990s and has significantly grown over the years. Its growth is credited to the following factors: 

• Strong government support;
• High English proficiency;
• Cultural compatibility, and
• A skilled workforce.

Thus, many businesses outsource tasks like customer service, IT, and financial analysis to companies in the Philippines thanks to its affordable, high-quality services.

Currently, the Philippines is ranked 12th in Kearney’s 2023 Global Services Location Index (GSLI), according to BusinessWorld. The capital, Manila, is the top destination in the country for global outsourcing or offshoring and investments. 

In addition, revenue for the Philippine BPO industry is projected to reach a staggering $0.72 billion this year, based on Business Process Outsourcing statistics.

Source: Statista.

Global businesses tend to look for IT outsourcing services in the Philippines. But, these sectors benefit the most from the skilled Filipino workforce and the country’s advanced infrastructure:

IT

• Software and website development;
• Application maintenance;
• IT support, and
• Cybersecurity services.

BPO

• Customer service;
• Technical support;
• Telemarketing, and
• Sales.

Knowledge Process Outsourcing (KPO)

• Financial analysis;
• Market research;
• Legal process outsourcing, and
• Healthcare services.

Healthcare

• Medical transcription;
• Telemedicine;
• Billing and coding, and
• Claims processing.

Creative Services

• Graphic design;
• Animation;
• Content writing, and
• Digital marketing.

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Advantages of Outsourcing to the Philippines

Affordable Labor Cost 

Outsourcing to Philippine companies is particularly attractive due to its significantly lower labor costs compared to other countries. This affordability extends across various sectors, including IT and digital marketing outsourcing services.

Source: Numbeo.

As a result of the Philippines’ affordable labor costs, organizations that outsource to the country can gain substantial savings.

You can save significantly on labor costs alone when hiring web developers from an IT outsourcing company in the Philippines. For example, you might hire dedicated developers for certain projects. As a result, organizations can focus on their business’ core areas. 

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Additionally, you can further maximize cost-effectiveness by hiring according to experience and skill sets such as:

• Knowledge of web databases and storage;
• Mastery of various programming languages;
• Back end and server management;
• Collaboration and communication, etc.

Optimal resource allocation allows for seamless adjustments to staffing based on specific needs. This highlights the pinnacle of flexibility in outsourcing hiring practices. 

Furthermore, very little overhead is required when outsourcing to the Philippines. It keeps operational costs at a minimum while ensuring efficiency.

Continuous Operations

Your business can stay competitive by staying available whenever customers need them. In most cases, a Philippine company works in a different timezone than their partner agency’s. Thus, depending on their respective working hours, the partnership may result in extended business operations. 

Businesses that outsource their IT work to companies from the Philippines can request tasks one day and then come back the next with everything completed. 

If the Search Engine Optimization (SEO) specialist working with your campaign takes a leave of absence, another team member with the same experience level can take over.

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However, you may consider implementing multiple shifts or creating specialized night-shift teams to ensure 24/7 operations. This business model is vital for maintaining high service levels, such as handling customer concerns. 

By outsourcing to the Philippines, you can ensure better and uninterrupted operational control. As a result, it increases efficiency. Thus, your business can simply monitor operation objectives and goals. 

Sustainability

Outsourcing to the Philippines is both feasible and sustainable.  After all, the industry offers businesses the following:

• Low-cost IT infrastructure and locations; 
• A highly educated workforce, and 
• Strong government support.

Firstly, your business can outsource tasks like IT and digital marketing to Philippines-based companies. This way, you can efficiently optimize your resources. 

Furthermore, outsourcing is scalable and flexible, allowing businesses to adjust their operations as needed. As a result, you can focus on your core goals.

Outsourcing also results in more sustainable business practices. On top of this, it lowers operational costs, maximizing profit. It can even be reinvested in other efforts such as:

• Adopting eco-friendly technologies;
• Improving product sustainability, and
• Investing in Corporate Social Responsibility (CSR) initiatives.

Outsourcing even gives rise to stable, strategic partnerships that contribute to long-term sustainability! Long-term partnerships with outsourcing services from the Philippines, such as for IT or digital marketing, will significantly reduce the risk of vendor turnover, ensuring consistent service delivery.

High-Quality Workforce

The Philippines has a solid educational system and various workforce training programs that contribute to the quality of its labor force. The system emphasizes the following capabilities, which are essential for various outsourcing roles:

• Technical skills;
• Critical thinking, and
• Problem-solving abilities.

Additionally, outsourcing companies in the Philippines consistently invest in training programs that allow employees to keep their skills up-to-date. According to Nexford University, the BPO industry is employing as many as 1.3 million Filipinos.

Another advantage of partnering with outsourcing companies is that they offer a wide array of top-notch IT and digital marketing services. Thus, it’s easy to find writers who craft engaging content and email experts, for example.

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According to History of English, 55% of the country’s adult population speaks English. Filipinos are also known for their cultural compatibility with Western countries, which is instrumental in understanding and collaborating with clients.

Finally, the Filipino workforce is known for its strong affinity for customer service because of its innate friendliness and patience. 

Strong Government Support and Infrastructure

The Philippines is a business-friendly environment supporting its outsourcing industry’s growth. It has enacted laws and regulations to that end, including the Data Privacy Act of 2012 and the Ease of Doing Business Law. The latter significantly simplifies business processes.

The country also has a stable regulatory framework that protects business interests. These cover the following areas:

• Intellectual Property (IP);
• Labor laws, and
• Contract enforcement.

In addition, industry associations within the Philippines closely collaborate with its government to address challenges and promote growth. For instance, the IT & Business Process Association of the Philippines (IBPAP) provides industry insights and networking opportunities. 

Lastly, the Philippines offers support to businesses in the form of legal, financial, or consulting services such as:

• Regulatory compliance assistance;
• Dispute resolution;
• Tax incentives;
• Financial advisory services;
• Training;
• Export assistance;
• Sustainability consulting, etc.

Overall, robust government support and infrastructure make the country an ideal outsourcing destination since it attracts foreign investment. 

Source: Exploding Topics.

Challenges and Mitigation Strategies

The Philippines offers many outsourcing-related benefits and a variety of services, such as IT and digital marketing. However, businesses may encounter a few common challenges. Fortunately, there are vital strategies to overcome them and ensure successful operations:

Cultural Differences

Despite Filipinos’ cultural compatibility with Western companies, there may still be differences that need to be navigated, such as:

• Business practices;
• Communication styles;
• Workplace expectations, etc.

However, Philippines-based outsourcing companies can conduct regular cultural training sessions to better understand their partner companies. This can lead to easier collaborations in the future. 

Regular communication is another way to strengthen relationships among partners.

Infrastructure Issues

The Philippines has made great strides in infrastructure development. However, certain areas may seldom experience issues like power outages or Internet connectivity concerns.

Thus, businesses can outsource their IT or digital marketing work to companies in the Philippines that have solid contingency plans and reliable backup systems for both power and Internet connectivity. Consider investing in service providers located in better-developed areas.

Political and Economic Stability

Political changes or economic instability have a significant impact on business operations. It can even affect regulatory environments and overall market confidence.

Businesses can create thorough risk management plans to deal with these scenarios. You can also diversify your outsourcing operations within the Philippines or plan for shifting operations.

Quality Control

Businesses may also experience challenges in maintaining consistent quality when outsourcing tasks, especially when scaling operations. 

Moreover, companies can implement rigorous quality control measures to ensure that the outputs meet company standards. For example, businesses that require IT outsourcing can rely on the aid of Quality Assurance or QA testers for websites or applications. 

Here are some methods for monitoring and maintaining quality standards:

• Performing regular audits;
• Doing performance reviews;
• Relying on clear quality benchmarks;
• Using project management tools, and
• Establishing strong communication channels.

Data Security

Businesses need to ensure security and privacy, especially when dealing with sensitive customer information and proprietary data.

Fortunately, you can outsource your work to companies in the Philippines that offer IT or digital marketing services. You can partner with a service provider that adheres to international data security standards that can do the following:

• Implement tight security protocols;
• Conduct regular security audits, and 
• Comply with relevant data protection laws.

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Outsource Your IT and Digital Marketing Work to Companies from the Philippines Today!

The Philippines Business Process Outsourcing industry has transformed into a vital economic player. 

Businesses can outsource to the Philippines, which offers diverse services across sectors, including IT and digital marketing. Additionally, with its skilled workforce, cost savings, government support, and opportunities for growth and innovation, it continuously attracts the attention of global businesses.

Attain goals and create more opportunities by partnering with outsourcing companies in the Philippines!

About Jalou Batilong

Most every great writer is a voracious reader, and no word describes Jalou better. Jalou enjoys a good read whenever she has the time to sit down and open a book or browse for interesting articles. It's through reading that she is able to digest information so easily, and write her own unique piece of information to share to everyone else.

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