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What to Look for When Hiring an Outsourcing Company in the Philippines

by: Mary Christine Galang

Thursday, July 27, 2017 |

The Philippines is named as one of the top business process outsourcing (BPO) hubs in the world and has long surpassed India as a global leader in the call center sub-sector, with more than 1.2 million Filipinos employed by BPO and IT industries.

In 2015, it generated $22 billion in revenues with 17th annual growth, and was projected to overtake Overseas Filipino Worker (OFW) remittances by 2017 should the current growth rates continue, according to the Bangko Sentral ng Pilipinas (BSP).

Being the largest domestic industry in the country, BPO is seen as a key factor in GDP growth. According to a forecast reported by the Business Mirror, the Philippines and Indonesia will be leading the continuing growth of the ASEAN economies until 2019.

Last year, nine Philippine cities have made it to the Tholons 2016 Top 100 Outsourcing Destinations, with Manila retaining its 2nd ranking next to Bangalore, India. Other key BPO cities that made it to the list are Cebu City (7th), Davao City (66th), Sta. Rosa (81st), Bacolod (85th), Iloilo (90th), Dumaguete City (93rd), Baguio City (94th), and Metro Clark (97th).

Why choose the Philippines as your outsourcing partner

Outsourcing companies in the Philippines have a competitive advantage against other foreign countries in terms of cost efficiency, high literacy rate, English fluency, cultural harmony, and business continuity among others.

Young, intensive labor force. The country's labor market is one of its most significant competitive advantages, not just in BPO, but in various sectors as well.

The Philippines has a rapidly expanding worker pool and the labor costs continue to be competitive. According to the Oxford Business Group's 2017 report, the country produces around 550,000 college graduates annually.

Furthermore, labor costs in the country are lower than China, Mexico, and Malaysia. Meanwhile, having an education system closely aligned with that of the US, and English used as the medium of instruction, Filipino graduates are not just more likely to match, but are well-positioned to work for US-based companies.

Government incentives for investors. As early as 2002, the Philippine government has recognized the value of developing its BPO sector, allowing office buildings to be registered as "ecozones" and a number of generous investor incentives that remain in place today.

This includes tax holidays, corporate income tax exemptions that can be extended from four years to six or eight, and a 5% tax on gross income in lieu of national and local taxes that can be elected following the original tax holiday's expiration.

Other benefits are also directed towards skills and training, with vocational training schools receiving training grants and some BPO companies may be granted exception on local taxes and permits, and may receive value-added tax exemptions on inputs.

Qualities to look for in your Filipino BPO partner

Reputable experience. Find out the years of experience in the industry, past clients, and full compliance with all regulatory standards. You are entrusting a valuable part of your business to a third party that must have an excellent track record in withstanding market volatility and crisis management.

Expertise and specialization. Having highly qualified and highly capable personnel plays a crucial role in ensuring quality of service and boosting productivity.

Technology. State-of-the-art amenities and equipment that meet with industry standards will ensure that your operations are conducted seamlessly with minimal to no disruptions. This is also vital in faster and more accurately delivered services that will inspire confidence from your customers.

Effective, precise communication. Aside from language fluency, it's also important that you are able to communicate effectively without problems. Knowledge in your specific industry jargon is also a great help.

Commitment. Your BPO partner is not comprised of automated machines. Look for a strongly driven and committed partner that is an extension of your in-house company family.

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