Outsourcing in the Philippines: A Definitive Guide to Help You Get Started

When it comes to outsourcing, one of the top destinations that comes to mind is the Philippines. There’s a good reason for it: workers in this Southeast Asian country deliver high-quality work at a fraction of the cost. 

On top of that, you get to enjoy other benefits that go beyond price. This article will uncover everything you need to know about outsourcing in the Philippines–from its pros and cons to the job functions where you might want to consider it.

What is outsourcing?

Outsourcing is a business strategy where companies hire third-party companies or individuals to do specific job functions. Both small and large companies opt for outsourcing to eliminate or minimize operational costs without compromising the quality of output.

One of the most commonly outsourced services is related to Information Technology (IT). A new survey revealed that the global IT outsourcing market is expected to reach $397.6 billion by 2025, from $333.7 billion pre-pandemic. This upward trend was due to the rapid digital transformation of many organizations as they swiftly transitioned to remote work.

In the Philippines, outsourced jobs were mostly related to Business Process Outsourcing (BPO). A recently published article reported that the country’s BPO scene has evolved over the last two decades. Currently, the BPO industry employs more than 1.3 million Filipinos and is eyed to generate at least $29 billion by the end of 2022.

Aside from that, the Philippines is one of the leading destinations to hire virtual assistants, freelance writers, graphic designers, and other online-based jobs.

Why is the Philippines the best for outsourcing?

With the proliferation of digital tools and many professionals preferring to work from home, now is the best time to hire outsourced talent in the Philippines. Here are the reasons why you should put the country at the top of your list.

  1. English literacy, both in written and oral communications

    While Filipinos are speaking their mother tongue, Tagalog, their second language is English. English is being taught to children as early as kindergarten, with the language heavily used in their day-to-day conversations. Some Filipino households use English as their first language, making them native speakers even before they get their formal education.

    According to the English Proficiency Index 2020, the Philippines placed 27th worldwide and 2nd in Asia, just behind Singapore. This shows that global nations wouldn’t have a problem communicating their needs to Filipinos given their level of proficiency in the English language.

  2. Source of Great talent

    Filipinos are naturally gifted in their strengths and capabilities. You will find expert IT consultants, prolific writers, and digital artists who have acquired their education from prestigious schools. 

    Most Filipino professionals also have experience working with huge corporations and have pursued work-from-home careers during the pandemic. You can hire these remote workers for specialized projects or long-term contracts.

  3. Friendly and easy to work with

    Filipinos are known for being hospitable and kind. At work, they are easy to work with; they are hardworking and open to new ideas. They are always up for a challenge and seek opportunities to improve their craft.

  4. Adaptive to change

    History tells us that Filipinos have been tested time and time again when Spain, America and Japan colonized the Philippines. Throughout the decades, Filipinos have adapted to change and endured wars, making them more formidable than ever. 

    Up to this day, Western culture is entrenched in their everyday lives, and they continue to adapt to foreign cultures through music, entertainment, and food.

  5. Cost savings

    The Philippines’ cost of living is lower than their counterparts in Western countries. To give you an idea, the average cost salary of an IT fresh graduate is P25,000 or around $280 per month, compared to $3,600 in the U.S. This is favorable to many small businesses in the U.S. and Europe because they get to hire professional workers in the Philippines while saving on costs.

  6. Can work in shifting schedules

    Many Western countries are getting offshore outsourcing services in the Philippines because Filipinos are open to work based on their client’s timezone. For example, the U.S. and the Philippines have a 12- to 16-hour difference, so most Filipino workers would have to work the nightshift to meet the requirement. Rotating shifts–as well as weekend schedules–work for Filipinos given their vast BPO experience.

What can you outsource in the Philippines?

If you’re ready to get outsourcing services in the Philippines, you can practically hire someone or a team to work on various job functions. Note that both products and services can be outsourced to the Philippines, saving you both time and money.

  1. Marketing

    If you need writers, graphic artists, web designers and social media managers, you can hire these professionals from the Philippines. Having an extra pair of hands to help you run your marketing department gives you more time to focus on core business functions such as finance and building client relations.

  2. Accounting

    Accounting is one of the most common areas being outsourced nowadays. Hiring someone else to work on your bookkeeping and prepare your tax documents ensures that you are on top of your cash flow, and prevents you from any legal liability. Just make sure to find someone who knows about the accounting policies, laws and best practices in your country.

  3. Sales

    If you’re running your business by yourself, you can outsource salespeople from the Philippines to do sales calls on your behalf. They can also help you set up sales funnels geared towards closing deals.

  4. Customer Support

    Every business needs someone to ensure that customers are satisfied with your products or services. The Philippines is rife with BPO professionals who can help you attend to your customers round-the-clock.

  5. Virtual Assistance

    With remote work still here, most small business owners need help in keeping things in order. Virtual assistants in the Philippines can help you run your show: they will organize your schedule, oversee that admin tasks are done, and make travel arrangements when necessary.

    Filipino virtual assistants usually charge $6 to $14 per hour of work, depending on their skills and experience. Plus, you won’t have to worry about the tools they will be using because they pretty much have them covered.

  6. Human Resources

    Looking at hiring recruiters in the Philippines? Now, you can outsource human resources. Headhunters will handle any task related to hiring and onboarding professionals in your company. They will bring in qualified candidates for the positions you need to fill in. 

    You can also hire a remote human resource professional to run payroll, benefits administration, and manage your team’s attendance. Larger organizations would typically outsource this function to an HR outsourcing company from the Philippines.

  7. IT Support

    Companies that outsource their IT staff in the Philippines can save them a tremendous amount of money while getting access to technical talent. By outsourcing your IT, you can avoid the high costs associated with hiring and training in-house staff. Training your internal IT team can be expensive knowing that you have to take care of certifications and compliance, on top of overhead costs.

Offshore technical teams can suffice you with the same tools and applications you need for your business–all while saving money. Whether you need help with network security, data backup and recovery, or cybersecurity, you can rest assured knowing that someone is always available to help you round-the-clock.

Where can you find outsourcing professionals in the Philippines?

If you’re looking at building your outsourced team in the Philippines, you may consider a myriad of platforms. You may find offshore talent directly through LinkedIn, Remote Staff PH, Upwork, Jobstreet, and other professional websites. 

Also, some remote workers are active on Facebook groups, so be sure to post about new job openings there. You may join groups that focus on specific skills you want to hire. 

For example, if you’re looking for freelance graphic artists and web designers, you may interact with them on Facebook groups like Independent Creative & Advertising Professionals (100.6K members), Graphic Designers of the Philippines (47.1K members), or the more general Upwork Freelancers Philippines (177.4K members).

Is outsourcing good for the Philippines?

Yes! Foreigners outsource to the Philippines because they get to hire pools of talent without compromising their budget. But on the other side of it, Filipinos are given more opportunities to get good-paying jobs without leaving their homes. In fact, the IT-BPO sector has the potential to add 160,000 more jobs this year, opening more doors for Filipinos who have lost their jobs during the COVID-19 pandemic.

Should you outsource a full-time or part-time worker?

Ultimately, the decision of whether to outsource a full-time or part-time worker depends on your needs and budget. 

When to outsource a full-time worker

Generally, hiring a full-time worker saves you more instead of hiring someone on a per-hour or part-time basis. Full-time workers will work for you for 40 hours a week–that means, more work will be done for your business. You have more overlapping hours, which is important if you want your outsourced employee to work in his or her local time zone. 

Also, it makes more sense to hire a full-time outsourced professional when there are simply too many projects to run and you are chasing a tight deadline. If you want to achieve specific goals in a short period of time, outsourcing full-time workers would make more sense. Salaries or monthly payments are usually fixed in this kind of arrangement, so you won’t have to worry about overspending.

When to outsource a part-time worker

Some small businesses are opting for outsourced part-time workers because they have limited budgets. They usually don’t have enough resources to hire full-time employees, but they don’t have the time to work on tasks either.

Outsourced part-time workers often give you the best bang for your buck because you pay the expert for the time they spend on a project. When work is done, you don’t have to pay them. You can stop the engagement when there’s nothing left to accomplish. 

However, part-time workers may charge you higher because you will pay them on an hourly basis. That means, if you ask them to work on more tasks, they will work much longer; therefore, they will charge you more.

Consider the type of work that needs to be done. If the project is long-term and requires a lot of specialized knowledge, then it might be better to hire a full-time worker. However, if the project is simple and doesn’t require more working hours, then a part-time worker might be sufficient.

Why shouldn’t you outsource in the Philippines

While outsourcing in the Philippines is most preferred by Western countries, the experience isn’t always favorable. There are cons to outsourcing as well. 

Check out some of the most common disadvantages of outsourcing in the Philippines.

  1. Cultural differences.

    Cultural compatibility is crucial when you’re outsourcing to other countries. For example, if you’re an American and you want to hire a virtual assistant in the Philippines, you have to take note that they are more sensitive than people from the West. 

    Strong personalities often intimidate most Filipinos; however, there are some professionals who can handle criticisms and negative feedback. Other than that, Filipinos are known for their hospitality and humility. They are also resilient individuals, and can withstand any work-related challenges.

  2. Communication barriers.

    Filipinos learned English not from their homes but at school. The level of proficiency they get through education varies depending on where they graduated and the primary language spoken by their families. 

    You may expect communication barriers with some Filipinos, which may be problematic in the long run. Be sure to find someone who has strong verbal and written skills in English to avoid miscommunication.

  3. Time differences.

    Because of the time difference between the Philippines and other countries, it can be difficult to coordinate meetings or calls. It’s important to plan ahead and take into account the different time zones when scheduling meetings or assigning deadlines.

The Bottomline: should you consider outsourcing in the Philippines?

Outsourcing to countries like the Philippines will be beneficial to your business in the long run, mainly because it will save you a lot of money. Of course, you have to consider your business needs before taking any action. Also, weigh your options and carefully select the best person for the right job.

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