The Philippines’ outsourcing sector is the lifeblood of this Southeast Asian nation, home to over 100 ethnic groups. Outsourcing firms employ more than 2 million people in the Philippines, which, together with foreign currency remittances, provide the country’s economy with the most significant boost.
As a result, this island nation in the corner of the Pacific Ocean is positioning itself as a serious rival to long-established international outsourcing players in countries like India. Several sub-industries, like the call center sector, have overtaken India as Manila, the capital city, has become a top outsourcing destination for many multinational corporations.
You Can Also Check: Why Outsource to the Philippines?
Table of Contents
What is Outsourcing Staffing?
Outsourcing staffing is a viable arrangement for businesses that lack the resources to manage all their recruiting needs internally. It is a business delivery model where a customer hires people, the provider puts up the necessary infrastructure and workstations and manages operations on the client’s behalf.
In an outsourcing model, the supplier operates in a foreign country that is geographically remote from the client’s headquarters and often has lower costs.
Types of Outsourcing
Here are the different types of outsourcing open for businesses to explore:
Professional outsourcing includes any specialized, expert service. Any activity that is too complex for the internal staff to handle, including legal, finance, accounting, and procurement duties, falls under the outsourcing category. Because of their complexity and the need for competency, these jobs are frequently outsourced from seasoned service providers.
Are you looking to save costs while still receiving quality technical services for your business? Professional outsourcing providers can help you achieve just that! These providers offer a wide range of services to help your business grow and expand without needing a significant investment.
For example, if you’re starting a new business, you might need legal advice, and outsourcing can be an ideal solution. So why not take advantage of this opportunity and get the necessary technical services while saving on costs?
If your business has already begun, you presumably already outsource at least some professional services. You might not even consider outsourcing these services because they are so important.
Business Process Outsourcing
Business Process Outsourcing, commonly known as BPO, is a business strategy that involves contracting non-core business activities to third-party service providers. These activities include routine office duties such as data entry, bookkeeping, scheduling, correspondence, and administration.
BPO can also offer services such as lead creation and customer service, allowing businesses to focus on their core competencies.
BPO has become increasingly popular in recent years due to its many benefits. One of the main advantages of BPO is cost savings, as outsourcing can often be more cost-effective than hiring in-house staff.
Additionally, BPO providers often have specialized knowledge and expertise in their field, which can improve the quality and efficiency of the outsourced services.
Another benefit of BPO is scalability, as businesses can quickly increase or decrease the amount of outsourcing they require based on their changing needs. This flexibility can help companies to be more agile and responsive to market changes.
Overall, BPO can be a valuable business tool to streamline operations, reduce costs, and improve efficiency.
One of the most popular services today is IT outsourcing. It involves hiring a third-party company to manage all or some of its IT requirements, including software creation, maintenance, and support.
Today, almost all business types need IT or interact with technology on some level, making this a commonly outsourced department. Most businesses discover hiring an outside IT management team is less expensive than creating one internally.
Enterprises frequently utilize IT outsourcing to store and handle data. However, most big organizations typically only outsource some of their IT duties. Finding the correct fit is significantly more crucial than hiring a developer close to the office when creating an app, software, or technology.
As demand rises, internal manufacturing might be relatively inexpensive for small enterprises. Outsourcing is frequently the only method to take on big businesses.
With outsourcing, you may hire large teams, access additional resources, and have the money to upgrade your equipment frequently.
Furthermore, giant firms like Nike outsource manufacturing to save costs associated with a factory, employees, equipment, infrastructure, and raw materials. Because product life cycles are getting shorter across various industries, manufacturing outsourcing is vital for companies of all sizes.
Furthermore, finding a specialist in your business is simple due to the prevalence of manufacturing outsourcing. It is necessary to speed up manufacturing while keeping excellent standards.
In today’s fast-paced world, businesses constantly seek ways to increase efficiency and cut costs. One strategy that has gained popularity in recent years is outsourcing operational tasks.
While it is common for industrial companies to outsource equipment repairs, service-based companies can also benefit from outsourcing jobs such as delivery and landscaping.
By outsourcing operational tasks, service-based companies can focus on their core competencies and provide better customer service.
For example, a restaurant that outsources its food delivery can concentrate on preparing delicious meals. In contrast, a dedicated delivery service can handle the logistics of getting the food to the customers’ doors. It can lead to increased customer satisfaction and loyalty.
Similarly, outsourcing landscaping can free up time and resources for service-based companies to focus on their core services.
By leaving the maintenance of their outdoor spaces to professionals, companies can ensure that their premises look attractive and welcoming to customers. It can also help to create a positive first impression and improve the overall customer experience.
Outsourcing operational tasks can be a wise business decision for service-based companies looking to boost efficiency and improve customer service.
By partnering with reliable and trustworthy outsourcing providers, companies can reap the benefits of outsourcing while ensuring that quality standards are maintained.
Outsourcing project management services has become popular in today’s competitive business world. Businesses hire project management companies to manage their projects effectively, ensuring they are completed within the stipulated time frame, budget, and quality standards.
One of the primary reasons why businesses outsource project management services is to gain access to the required skills and expertise they may lack in-house. By outsourcing, companies can leverage the expertise and experience of project managers with extensive knowledge in various industries and sectors.
In addition, outsourcing project management services saves businesses time and resources, allowing them to focus on their core competencies.
For instance, a business may need more time and resources to overhaul a website, create extensive content, or initiate marketing efforts. By outsourcing these tasks, the company can concentrate on other critical aspects of its operations that require attention.
The outsourced resources provided by project management companies typically cover the needs of businesses to complete projects, such as project planning, resource allocation, cost management, risk assessment, and quality control. These services ensure the project is completed on time, within budget, and to the required quality standards.
In conclusion, outsourcing project management services is an effective strategy for businesses to complete their projects efficiently and cost-effectively.
By hiring project management companies, businesses can access the required skills and expertise, save time and resources, and focus on their core competencies.
Another way to combine the services you outsource is through multi-sourcing. You can often choose from various IT and other business tasks if you consider multi-sourcing viable.
Large organizations should typically outsource diverse IT functions and infrastructure to multiple providers. Any business that wants access to top experts, an outcome-based strategy, and openness in its IT initiatives should consider multi-sourcing.
But remember that you’ll need a plan before you start multi-sourcing. For instance, you must establish a governance framework and comprehend which KPIs are crucial to your company.
Nowadays, it’s common practice to outsource specific operational components to other businesses or units adept at providing that service.
“Process outsourcing” is akin to the practice of transferring the responsibility of delivering government services, such as firefighting, law enforcement, and military operations, to private companies that operate for profit. In other words, instead of the government directly providing these services, they hire private companies on their behalf.
Outsourcing for particular processes is divided into three categories:
- Knowledge-based processes (KPO) are used for data analysis and research to enhance goods and services.
- Legal process outsourcing (LPO) can handle litigation, regulatory compliance, and other legal needs.
- Recruitment process outsourcing (RPO) includes every element of hiring. You can get assistance with job advertising, application shortlisting, and candidate assessment.
You Might Also Be Interested: BPO vs KPO: Which is Better for Your Business?
Different Outsourcing Techniques
Here are the outsourcing techniques commonly used by businesses:
Employing a service provider within the same country is called local outsourcing, also known as onshore outsourcing.
This choice provides:
- Being in a comparable (though not the same) time zone benefits.
- Speaking the same language.
- Sharing the same cultural background.
- Familiar with statutory compliance.
Additionally, it is far more convenient to meet occasionally in person.
Local outsourcing has the massive drawback of virtually and inevitably being more expensive than outsourcing abroad.
This is typical among businesses headquartered in the US, Canada, and Western Europe. Furthermore, even if the supplier costs more, the quality is perceived to be higher (although not true in most cases).
Outsourcing work to foreign countries can be an effective way to reduce costs and access specialized skills. Businesses can save on labor and supplies by working with a provider in a distant location.
Additionally, foreign countries may have a more advanced skill set in certain areas, making outsourcing to those countries advantageous.
However, it is essential to note that outsourcing may come with specific legal and ethical considerations. Businesses should carefully evaluate the risks and benefits before outsourcing work to foreign countries.
Offshore outsourcing has a reliability problem, especially if you choose a cheap provider. You can resolve this problem by reading the provider’s reviews before signing a contract. However, you might discover that the prices you initially saw for the services differ from what you will be paying.
You Can Also Check: Pros and Cons of Offshore Outsourcing
Contracting with a provider outside the country but close by is known as nearshore outsourcing. In the US, Latin America would be considered nearshore outsourcing, whereas Asia would probably be regarded as offshore outsourcing.
You can benefit from both onshore and offshore outsourcing with nearshore outsourcing while, to some extent, minimizing their negatives.
For instance, even though you will be in a comparable time zone, you will gain from the other country’s cheaper business expenses. Delays in the delivery of the product are also less likely.
Finally, nearshore outsourcing can assist companies in expanding into nearby markets, which is frequently the next natural step.
Reasons Why Outsourced Staffing Works
1. Lower expenses
Hey, did you know that outsourcing staff can save you significant time? Instead of going through the hassle of hiring someone new internally, you can let a professional outsourcing services firm handle everything for you.
In outsourcing, there is no need to spend money on ads for job postings or sifting through resumes. And forget about wasting days interviewing potential hires and spending extra money on their training.
Just identify the skills you need for your team, ensure the assigned staff is trained, and start working with them immediately. It’s that easy!
2. Provides adaptability
The volume of labor might fluctuate wildly; one week, you might have a mountain of it, and the next, you might have none. For this reason, you won’t want to recruit a permanent worker.
You can meet your immediate demands by employing temporary personnel, but you avoid the financial burden of ongoing employment. When your workload requires it, you can change the size of your crew.
3. Offers superior talent
Outsourcing is the best way to access talented employees with the skills needed to help you on your journey to success and the training necessary to perform their job correctly if your organization is serious about finding great candidates and filling in temporary or full-time positions employment.
Recruiters excel at finding the top candidates on the market. They are qualified to hasten the process and raise the caliber of hiring since they know where to seek, what traits to look for in a person, and the most effective methods of approaching people about a job.
4. May concentrate on core business
The recruiting function may occasionally consume time and resources for smaller businesses. You want your staff members to be fully committed to their work and avoid putting off routine duties that can be crucial to the smooth operation of the business.
By eliminating operational distractions, outsourcing staffing enables you to concentrate on expanding your company.
5. Acquire an advantage over rivals
Start-ups and smaller businesses need more resources to attract top employees and compete with more established firms. However, they can level the playing field by outsourcing recruitment. The service provider’s recruitment team can assist you in swiftly and effectively finding suitable people.
Why Should You Outsource Staffing in the Philippines?
Contact centers, SEO, IT services, internet marketing, and virtual staffing solutions are some of the most popular outsourcing sectors in the Philippines.
A significant benefit of outsourcing to the Philippines is that it is minimal and business-friendly, as running a team of employees starts at around $3,000.
Regarding outsourcing to the Philippines, the sector is growing and has much to offer regarding security and dependability.
Among the main advantages are:
1. Excellent Cost
Unquestionably, one benefit of outsourcing to the Philippines is the pricing, which is also why businesses outsource.
Not only are labor prices in the Philippines roughly half as low as they are in the US or the UK but as a business owner, you also save money on tertiary expenses like renting an office space, paying for legal and HR services, purchasing the newest equipment, paying taxes, etc.
Most of the time, outsourcing to the Philippines may help business owners cut costs by up to 60%.
2. Excellent English usage
Since English is an official language widely spoken in the Philippines, the proficiency level allows the Philippines to enjoy a significant language advantage over India.
As a result, the BPO sector is brimming with workers with excellent English language skills, complete with American accents. Call centers and virtual staffing are voice-based services that benefit significantly from this neutral accent and speaking style. Working with service providers in the Philippines is simpler for US and UK businesses since there is no language barrier.
3. Greater Talent Access
While there is no shortage of talented people in nations like India, finding and gaining access to them can be challenging.
In contrast, businesses can hire competent, ready, and eager labor more quickly in the Philippines. It has a lot to do with how closely the school system in the Philippines mirrors that in the US, guaranteeing that you’ll get the precise skill level of an outsourced employee.
Every year, more than 450,000 students graduate from colleges and institutions, according to a recent ASEAN Briefing report. Additionally, the Philippines government supports many state-run university programs that give interested individuals access to skill sets necessary for the BPO industry.
4. Millennial Demographic
The average age of Filipinos is 23 years old, making it a country with a very young population. This group has a natural grasp of technology and is more adaptable to innovations.
Technological adaptiveness can be helpful to improve business solutions with ease. Many of the young population in the Philippines are college-educated and possess the necessary skills that prepared them for the BPO industry.
5. Lowered legal obligations and Management problems
Running a business has the unwanted side-effect of exposing your operations to legal risks and baseless claims made by internal workers.
However, outsourcing to the Philippines frees businesses from these issues because Philippine outsourcing companies have robust legal protections to guarantee ideal client and customer interactions.
Additionally, outsourcing firms can assist by giving access to experienced and capable Human Resources (HR) and management teams that can help you easily set up and assign training projects, work allocation, tax returns, etc. It guarantees that you can always give your business your full attention.
6. Influence of Culture
The Philippines is one of the few Asian nations with a balanced blend of both Southeast Asian and Western influences. It has much to do with the Philippines’ history as a former colony of Spain and the US at various stages.
As a result, the people of the Philippines have much in common with Western culture and have grown up watching Western media. Although it may not seem like a significant deal in the grand scheme of things, the fact that US pop culture is incredibly well-liked in the Philippines plays a big part in ensuring that the work culture of the service provider matches that of many Western clients.
7. Data Security and Privacy
The Philippines government has been instrumental in facilitating the growth of the country’s BPO industry by implementing supportive legislation and laws. It has created a conducive environment for the sector to thrive and has contributed significantly to the country’s economic growth.
The data privacy legislation passed by the Philippine government in 2012 provides that privacy requirements align with international standards because outsourcing activities frequently include sharing personal data.
Due to the tight laws set out by this act to safeguard sensitive data from unauthorized access, sectors like healthcare are increasingly considering the Philippines as a potential outsourcing location.
8. Superior Deliverables
According to several reputable research publishers, the Philippines’ BPO sector has been consistently recognized as a top performer in global client surveys measuring service delivery.
The sector’s exceptional performance has enabled the nation to hire an impressive one million BPO workers in just four years. This remarkable achievement is a testament to the quality of service and effectiveness of the Philippines’ BPO industry, positioning it as a leading player in the global outsourcing market.
9. Raised the standard of living
When they start working in the BPO industry, Filipinos have better access to amenities and a better quality of life. Thanks to the industry’s growth, people no longer need to leave their home nation in pursuit of work, ensuring they may stay with their families and close friends.
Choosing the right representatives for your company is a critical decision that can significantly impact your business’s success. However, outsourcing your hiring processes doesn’t necessarily mean letting go of your current hiring personnel or limiting their ability to select the most suitable candidate for the job.
By hiring recruiting consultants, you can leverage their expertise and resources to streamline your hiring process, ensuring that your current staff can perform their jobs to the best of their abilities. This way, you can focus on expanding your business while knowing your hiring needs are addressed.
The Philippines has emerged as one of the most preferred outsourcing destinations globally, thanks to its favorable mix of various beneficial factors that can help businesses thrive.