Outsourcing in the Philippines is not considered a ‘plan B or C’ for some companies who aim to improve and streamline their business. It is their top choice. Why? Vendors based in the Philippines can target the so-called benefits of outsourcing and can deflect it cons with ease.
An article in imageSource Magazine discusses and lists the pros and cons of outsourcing as follows:
1. Cost savings
2. Quality services
3. Access to specialized skills
4. Staffing issues
5. Capacity management
1. Linguistic barriers
2. Staff turnover
Let us tackle it one by one:
In most cases, this is the main reason companies outsource. And the best bet for low cost labor is the Philippines according to iSupport Worldwide. Low cost doesn’t mean below average level of service. The main factors that contribute to this are cheap office occupancy and the tax incentives the local government give to outsourcing companies, based on a paper entitled ‘The Philippines—Outsourcing’s new destination: A Guide for Businessmen and Investors 2011-2012’ by KPMG.
Doing business in the Philippines doesn’t compromise quality of service despite of the low cost labor. Filipinos are not daunted by irate foreign clients. Instead, they deal with every situation with an ample amount of patience and professionalism. Filipinos are also known for their happy disposition in spite of life’s circumstances.
Access to specialized skills
This is another reason companies turn to outsourcing. It takes a lot of time, effort and money to start a new project or create a new department. Is there a shortcut to speed up the process? Just hire a vendor that specializes on that skill and you’re all set. The Philippines is the breeding ground of the best talents possessing world-class knowledge and skill. Their expertise ranges from voice to non-voice services.
Two of the time-consuming and costly parts of a business are recruiting and hiring staff. Outsourcing is a way to take off this burden. The Philippines has a young and large workforce especially in the outsourcing sector, as stated in Infinit Outourcing’s article. Over a million jobs were generated in 2015, Rappler reports. Moreover, iSupport Worldwide says “the country’s universities churn out more than half a million new graduates every year.” In short, there will no shortage of employees in the near future.
In connection with the previous item, there will be no problems managing and solving issues that need a large pool of workers. A classic example of this is getting an extra help on call center or customer service operations or the repetitive and numerous data entry tasks companies face every day.
Poor communication is the major downfall of any outsourcing relationship. Not with Filipinos that have 97.5% literacy rate from 10 years old and over based on a 2015 survey by Philippine Statistics Authority. In international standards, the TOEFL test results between the periods of Jan-Dec 2010 ranked the Philippines in the 35th spot amongst 163 countries with a total score of 88, the Asian Scientist reports. The said exam rates the reading, listening, speaking and writing comprehension skills in English.
It is a natural course for employees to come and go. This scenario is quite common but foreign clients don’t have to worry about it. As told in Rappler, in 2015, the IT-BPM (Information Technology-Business Process Management) sector had about 1.2 million employees. This year the industry targets about 225,000 new call center jobs and 100,000 in healthcare. It seems there is no stopping this sector from growing and expanding in the coming years.
Even the latest survey conducted by Tholons this year recognized the Philippines as a prime outsourcing destination. Here are the results:
And take note, almost all of the cities climbed higher and not lower. This only proves the Philippines continues to improve and flourish in the sector of outsourcing.