The Pros and Cons of Outsourcing to the Philippines

Offshore outsourcing in the Philippines has many businesses divided:

  • Those with positive experiences tell their fellow business owners that it is an investment and it is worth the time, energy, and money saved.
  • On the other hand, those with poor experiences will claim that it’s a waste of time and that the end result isn’t worth the headache. 

Outsourcing is an umbrella term that encompasses any act of having a 3rd party take over any task that was previously done by someone on-site at your office. While there are several subtypes of outsourcing, we’ll focus on business process outsourcing companies (BPO). Partnering with the right BPO company can help alleviate a majority of problems businesses usually face when they outsource.

Pros

Larger Talent Pool

The most obvious pro is having your talent pool expand by an entire country’s worth of candidates. Due to the history of outsourcing in the Philippines, there is an abundance of professionals across a plethora of industries who have prior experience working for overseas clients. Companies like Clark Staff offer specialized professionals like Virtual Nurses, Architectural Drafters, Digital Marketers, and any sort of Developer needed.

In line with the varying types of professionals available, the experience and age range also varies. The largest age group working in the Philippines is 20 – 29. This is important for roles such as digital marketers if your target audience is of a certain generation. Hiring someone of that generation can give you access to invaluable information.

Around the Clock Service

The internet has changed the way customers and businesses interact. For all businesses that are properly equipped, this has strengthened their relationship with their audience. Strong customer service and technical support play a huge role in the success of a company.

The time difference between the Philippines and the rest of the world is irrelevant when talking about the customer and technical service positions. Businesses are able to hire staff to work any time they need, allowing for businesses all over the world to provide 24/7 support.

English Proficiency

One concern that is almost always brought up when meeting with potential BPO partners is English proficiency. Having all the high-quality staff in the world won’t matter unless you’re able to communicate efficiently and effectively. This won’t be a problem in the Philippines as it is ranked number 18 in the world for English proficiency and number 2 in Asia. This may not seem like such a high ranking, but in conjunction with the next pro, they help make the Philippines the premier location for outsourcing.

Cost-Effective Solutions

The average cost of living in the Philippines as of January 2022 is 26,101 Philippine Pesos for a single person, this means they can afford to live comfortably and have moderate purchasing power. Converted to other currencies, specifically those of countries who seek outsourcing solutions, the cost of living is significantly lower.

Indeed.com notes that the average monthly income of a Virtual Assistant in the US is $4,188, while in the Philippines it is only about 25,445 Philippine Pesos (about $500 a month). Do note that the average salary doesn’t reflect the actual salaries BPOs recommend and each BPO may recommend different starting salaries to stay competitive and attract the highest level candidates.

Flexible and Scalable

Unlike Call Centers which cater to large companies, BPOs are able to create bespoke solutions for companies of any size. For example, a call center might make you hire 50 customer service representatives before you are able to partner with them while a BPO will allow you to hire whatever you need to start, such as 13 CSR staff. In addition, scaling your remote staff will be easier as the previous staff will help them settle into both your company culture and processes. This means that any additional members of the team will spend a smaller and smaller amount of time getting into the flow of things.

Cons

Time Zone Difference

Being able to cover customer and technical support needs on a 24/7 basis was noted as a pro, but the other side of that coin means that a single manager can’t oversee every shift. This may lead to another con, which is feeling like you’re losing control.

The solution is actually simple. Either through hiring or internal training, you can have a team leader or supervisor watching over the shifts that aren’t covered.

Possible Loss of Control

Not having direct immediate control over certain teams due to their work schedule may have businesses reluctant to outsource. In these cases, team leaders, supervisors, and managers can remedy this. You can set up meetings in order to have your processes and updated news trickle down till it gets to your rank and file remote staff.

In the event you feel a lack of control, you can give clearer instructions to the upper management who will be managing the remote workers. For example, you can have managers or team leaders pass on instructions. The BPO you select as a partner can also be utilized to help as they are experts in dealing with remote staff.

Finding the Right Remote Staff

Finding a trustworthy partner that compliments your company might take time. This will vary from person to person depending on a number of variables.

  • If you already know someone who is outsourcing, you could ask for a referral which would speed up the process immensely.
  • If you have to canvas BPOs that you find from Google, it might take you till page 10 to find the right partner, which would equate to a great deal of time invested.

Thorough research and “legwork” are required to minimize the number of potential partners you have to meet with, but even with this, time still needs to be invested.

Holidays

The Philippines has 18 national holidays, 14 of these are non-working with pay, while the other 4 are special non-working holidays meaning they don’t qualify for holiday pay. This may not seem like a lot right now, but coupled with the holidays in the country you’re targeting, this adds up to quite a bit of off days. This means multiple paid days off.

There is also a 13th month’s pay in December, which is essentially paying employees another month’s pay as a bonus. Paying employees for not working may not be your favorite thing to do, but at the end of the month, you would have spent substantially less than hiring in your local market.

Cultural Differences

It is true that Philippine culture is heavily influenced by American culture, however, there is an underlying culture all their own. While multiple facets of the Filipino culture are beautiful, there are some that stand out as negative, especially with the different business standards of the world. One example of this is “Filipino time” which is essentially being late. Punctuality is something you will need to stress to your remote staff. As a form of support, your BPO partner will also remind your remote staff that they need to be on time every day and will manage the HR aspect of everything so you won’t need to worry about it.

The Wrap Up

Taking the pros and cons into consideration, you will need to decide whether or not outsourcing is for you. If you believe that the time and money you may save outweighs the obstacles that you may face, then start looking for a BPO to recruit the professionals you need.

It is strongly recommended that you partner with a BPO when outsourcing. The horror stories you hear about outsourcing are, for the most part, from freelancers who can come and go as they please with no accountability. BPOs will help you deal with all the cons mentioned above, barring the time spent looking for a partner of course. If you decide to look for a partner, make sure to check out Clark Staff.

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