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Factors that Make the Philippines an Ideal Outsourcing Destination

by: Sarah Joson

Monday, July 9, 2012 | Outsourcing News |

Lauro Vives, Founding President and Chief Executive Officer at IT consultancy company XMG Global, recently posted an article at TheSauce.net.au about the stance of the Philippine government regarding the robust outsourcing industry of the Philippines.

It is quite obvious that the current administration is all for innovation or getting investors excited at the thought of outsourcing basic and complex office functions as the business process outsourcing (BPO) industry is one of the major revenue generators for the country.


Why the Philippines is one of the best outsourcing destinations

Here are the key factors that make the Philippines one of the renowned destinations for outsourcing:

The Philippines has a large pool of skilled workers.

The country’s available workforce, composed of nearly 440,000 graduates for 2012-2013, is known to have a 92.6% literacy rate. About 50,000 are focused on the IT segment, equipped with extensive background as most schools are supported by several notable IT companies.

The fresh graduates are suitable candidates as they are highly trainable, which means companies can help hone their skills according to the needs of their business.
The Philippines’ BPO sector is backed by the academe.
It is a well-known fact that the Philippines is largely influenced by the Western world. Apart from being colonized by Western nations, the inclination of Filipinos towards the Western culture plays a huge role on how students are being taught in school. In fact, the Philippines was the first to have a “normal” university in Southeast Asia in 1901, built by the Thomasites. It was a teaching university based on a Western model.

Filipinos have a neutral English accent.
A test done by the Global English Corporation in Brisbane, California showed that the Philippines scored above 7.0 BEI level, surpassing Slovenia’s 6.19 and Norway’s 6.54. Having a score of 7.0 or higher would mean Filipinos are able to participate in complex business arguments, as well as difficult tasks at work.

Even if accents play a minor factor when an investor is deciding where to outsource, it is still highly considered especially for voice-based processes. In fact, the Philippines has overtaken India as the call center destination of the world, even if the population of the Philippines is smaller. This is probably because Indians have a more pronounced accent, whereas the Filipinos, who have fostered a strong relationship with Americans since 1898, are more inclined to speak English with a neutral accent.

Operating in the Philippines is inexpensive.
If a business decides to operate in the Philippines, the owner will be able to save nearly 15,000 to 22,000 US dollars annually. In line with that, XMG Global’s report showed that on average, Indian talent costs 37% more compared to Filipinos. The country also has fewer paid holidays.
Medical benefits are a priority.
Majority of employees look at the terms and coverage of the health benefits being offered to them, and more often than not, consider HMO package as a key factor if they should accept the job. Another thing that applicants take seriously is the work-life balance as most BPO employees work on a night shift.
The Philippines has a budding multilingual workforce.
XMG Global recently helped in creating a team-up between IBM and Board of Investment for projects that can help candidates hone other language skills apart from English, as the multilingual market and demand for multilingual services are increasing. This effort will then help reach targets such as the $25 billion revenue for 2016.

More and more Filipinos want to enter the BPO workforce.
One of the reasons Filipinos strive to work for BPO companies is they offer attractive benefits and compensation packages. Gone are the days when call center positions are the only opportunities available for graduates, because today, more and more functions are added to the services line-up, which means they can find work according to their specialization like IT, design, medical transcription, etc. The trend to work for BPO companies is growing amongst graduates. In fact, 41.6% of professionals prefer to work in the outsourcing industry.

The BPO industry helps in the country’s economic growth.
Another XMG Global report also showed that the BPO industry is the country’s largest private sector, employing as much as 610,000 workers last year. Apart from that, the sector helps the country by contributing revenue and increasing investments.
Numerous BPO hubs emerge.
The Philippines has numerous BPO hubs scattered all over the country, from business districts to rural areas. The economic zones are managed by the Philippine Economic Zone Authority, together with local government bodies. Each BPO hub receives strong support from the government. These are the ones that look for zones which can be developed into credible BPO locations. Also, they assist in building infrastructure and ICT connections.

The Philippines is a paradise amidst industrialization.
Where else can business executives work and relax at the same time? Investors can explore top tourist spots in the Philippines during their free time. Apart from getting corporate satisfaction, personal leisure will also be taken care of. Employees are also given the best of both worlds - a decent paying job and not having to leave their loved ones to work abroad.

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