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Why Tech Start-ups are Sourcing Talent from the Philippines

by: Sarah Joson

Friday, August 07, 2015 |

An article posted at HBR.org highlights the possible rise in demand for skilled Filipino technology professionals as the number of successful tech start-ups continues to grow.

The Philippines has gone through a major overhaul in the last couple of decades. It was once easily identified as the sick man of Asia, but is now one of the emerging countries and is the second fastest-growing economy in the world.

One of the country’s largest exports and revenue generators is services. Sourcing from the Philippines is now widely considered by companies that are looking to scale efficiently and sustainably. Its capacity to supply skilled talent spurs from the rapid rise of technology start-ups around the globe. These companies are considered “unicorns”, they are the ones that quickly became billion-dollar organizations, and just last year, 30 unicorns have been spotted. These unicorns are now maturing and their mantra is no longer about growing and proving they are a success. Now, there’s more work to be done - they have to prove that they are not a one hit wonder.

BPO sector to post $25B in revenues

The Philippines’ business process outsourcing (BPO) sector is not only an investment opportunity for global organizations; it also provides an effective means to successfully expand and fill in the gaps within their operations. The Philippines’ BPO sector employs over a million workers and is anticipated to post $25 billion in revenues in 2016 and is a huge chunk of the country’s GDP of $270 billion. Tech-enabled services are one of the segments that are fuelling the industry with complex and high-valued skills such as mobile app development and data analytics, as well as middle-level skills such as video production, copywriting, and financial analysis.

The Philippines, a country that is likewise recognized for call center outsourcing, is gaining quite a following in the American tech space with its ability to reduce costs, and its large pool of young, English-speaking skilled workforce. The average age of a tech professional in the country is 24, and local universities have been reported to produce more than 130,000 IT and engineering graduates annually who are proficient in trending programming languages and are able to produce iOS and Android apps flawlessly. As for the rates, a trained developer with at least five years’ experience can cost less than $25,000 per year.

Foreign companies also have endless options when building a flexible and well-equipped offshore team due to the rise of cloud technology. They can also team up with outsourcing providers to start a virtual setup that can accommodate the scale required in augmenting or automating an operation.

As for young Filipino workers, they now have more options in creating their own path as the local outsourcing space is shifting from call center work to working for companies that have the potential to become part of Silicon Valley’s finest.

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