Offshoring, outsourcing, strategy, resourcing, innovation, BPO, skilled talent

Why more companies are turning to the Philippines for niche skills

The pandemic has banished the idea that physical co-location of employees is critical for productivity, innovation and developing trusted relationships in the workplace. Researchers predict this global mindset shift will likely lead to an increase in outsourcing as companies look to access global talent from the most cost-effective locations.

At the same time, business continuity planning (BCP) is evolving rapidly to mitigate future global pandemic scenarios. Executives want certainty that their service providers can transition seamlessly to home offices, maintain their own supply chains, and deliver critical data security and work productivity.

But whether a business has long-embraced the benefits of offshore resourcing or is considering outsourcing to help solve new challenges, reducing costs is not the only factor in a successful strategy. Cultural compatibility, communication, infrastructure and access to highly-educated talent are vital – and also vary markedly across regional outsourcing industries.

There are a host of reasons why the Philippines has overtaken India to become the favoured location for Australian, UK and US companies seeking skilled offshore talent.

1. World-class infrastructure
Manila – the country’s capital and business hub – boasts modern commercial buildings in dedicated business parks, with high redundancy in communications and power infrastructure.  The technology infrastructure is comparable to major world cities like Sydney or Atlanta. And while the Philippines is one of the fastest growing IT business process outsourcing markets in the region, industry analysts are now predicting investment in cloud services will soar from US$1.8 billion in 2020 to US$2.6 billion in 2024.

2. There’s no language barrier
Unlike many Asian countries, Filipinos speak great English. English is an official local language (alongside Tagalog), making the Philippines one of the largest English speaking countries in the world. Filipinos have developed a neutral American accent that works extremely well for Australian, UK and US businesses.

3. Reduce costs without compromising quality
Employee costs in the Philippines are generally 30% of an equivalent role in Australia or the US. For every role you have in Australia, you can typically hire three people in the Philippines for the same cost.  This is achievable due to the Philippines having one of the lowest costs of living among its regional neighbours. Offshoring careers are highly sought after – an employee working in an outsourcing/offshoring role earns, on average, more than double the minimum wage – AUD$770 – AUD$930 per month.

4. Great cultural fit
Filipinos are regarded for their excellent work ethic and respect for their colleagues. They value integrity and professionalism just as much as they value time and are immensely loyal to their employers. When it comes to commitment, they’ll match – if not exceed – your onshore team’s productivity.  Team building and work celebrations play as much of a role in Filipino offshore offices as they do in Australian, UK or US workplaces. Filipinos also know how to have fun – they’re familiar with many popular culture references and trends as they typically consume similar entertainment content as their ‘onshore’ colleagues. Employee turnover for Manila-based roles is also significantly lower than the equivalent roles in western countries.

5. Highly-skilled talent pool
Concerns about finding the right talent for the right role is often the biggest hurdle for businesses investing in offshoring for the first time. The Philippines boasts a huge pool of university educated, skilled candidates with excellent communication skills – hundreds of thousands of university graduates enter the workforce each year. One of the advantages of offshoring is the ability to harness talent you can’t necessarily find in your local market (or on a large scale).

6. Customer service gurus
Filipinos aren’t just exceptional at providing customer service, they genuinely love doing it. They’re great at building rapport and have an extremely warm, friendly, empathetic style. Combine this with excellent communication skills and you have customer service experts who excel at resolving issues on the phone, managing your online community or engaging with your customers via online chat.

7. Strong economy and government-led investment
The Philippines economy is one of fastest-growing economies in Southeast Asia. The Government has invested significantly to position Manila as the leading global provider of outsourcing services and the industry is currently valued at $250 billion. Foreign investment is welcomed and the government is actively investing in the nation’s infrastructure and technology to support the outsourcing industry. Tax and non-tax incentives are available to support foreign investment.

8. The time zone advantage
A major factor in the Philippines’ offshoring industry growth is a cultural willingness to work shifts.  Filipinos are flexible when it comes to their work day: employees are prepared to work at night, on holidays and accommodate the demands of global client schedules. The time zone also makes it easy for you to ensure prompt, reliable 24/7 service (if required) or to support your onshore team when they’re up against project deadlines and need round-the-clock resourcing.