In today’s global market, companies are choosing to outsource their critical business processes to increase productivity and stay competitive. After the onset of companies turning to outsourcing services in the early 1990s, there’s still no stopping the surge in demand which is expected to grow by $5.09 billion in the 2020 to 2024 period.
Now that outsourcing has become an integral part of most businesses, choosing the right place for acquiring such services is essential. A world-renowned favorite for outsourcing is the Philippines for a number of reasons – among these, the great foreign business environment.
Other factors that make the Philippines a go-to haven for business outsourcing requirements are the following:
- English language proficiency
This is among the top reasons why foreign managers choose the Philippines for outsourcing over other countries – the Filipinos’ excellent grasp of the English language. With English being the lingua franca of international commerce, the need to communicate and fully understand the nuances of business dealings in a common language is of prime importance. This is where Filipinos excel – from the comprehension to actual speaking in the same accent of the people they are in touch with.
An estimated 90 million people speak English in the Philippines. It’s taught in schools and is used in common teaching instruction all throughout the student’s academic life. Suffice to say, a great majority of Filipinos can speak English fluently.
When you outsource to the Philippines, you’ll be able to easily relay your plans and expectations without a problem. Your company can seamlessly transfer its core business processes without worrying about a language barrier.
- Culturally compatible
Most businesses find that intercultural communication is the biggest challenge when outsourcing internationally. The process itself is complicated enough without adding cultural differences to the mix. This challenge is eradicated when you outsource to the Philippines because of the country’s strong western influences and colonial origins. (It was once a territory of the United States.)
The cultural compatibility, combined with the high English fluency rate, lessens the chances of misunderstanding. It’s much easier to outsource your business processes when you’re all on the same page.
- Educated and highly skilled workforce
The great thing about outsourcing is you don’t have to start a business in the Philippines to get access to its incredible workforce. The Philippines is among the best countries to invest in, placing seventh in CEOWorld magazine’s world ranking for 2020.
Its skilled labor force is also among the best in the world. Contributing factors to this high ranking are the high literacy rate and the volume of college graduates every year. There are also plenty of professional certification courses available that encourage workers to earn additional qualifications.
- Access to a large talent pool
In addition to an educated and skilled workforce, what sets the Philippines apart from other outsourcing destinations is the diverse talent pool. The labor force has an abundance of workers with specific training and qualifications, thus making it easy to find the people for the specific services you need.
You can outsource virtually any part of your business to the Philippines. From customer service and accounting to IT services and data management, if the task can be performed and relayed via a computer and internet connection, then you can outsource it.
- Low labor costs
Many businesses choose to outsource internationally to save on costs. The Philippines offers great cost-effective but quality outsourcing solutions for foreign businesses. You can save on production expenses while still getting quality services.
In the Philippines, average customer service representation, for instance, can cost around $5 to $12 an hour depending on the experience and skill level of the employee. This is much lower compared to the $14.15 hourly rate in the US for the same job. The country has one of the lowest labor costs in Southeast Asia, as well.
- Growing BPO sector
The BPO or business process outsourcing industry is among the fastest-growing sectors in the Philippines even overtaking India as the “leading call center country”. It’s expected to be a $40 to $50 billion industry by 2020.
Outsourcing services aren’t new in the country. This means that companies have the infrastructure in place to properly accommodate your business needs.
- Government incentives
Because the BPO industry plays a significant role in the Philippine economy, the government offers businesses investing in the country’s outsourcing sector with several incentives like special economic zones and grants.
The Philippine Bureau of Internal Tax Revenue (BIR) also provides offshore BPO companies operating in the country with a 4- or 8-year corporate income tax exemption.
To learn more about outsourcing and starting a business in the Philippines for foreigners, contact our team here today.