Outsourcing part of your business can be tricky, particularly if you’re looking overseas—or “offshoring”. Recruitment is hard enough locally, let alone in another country that you might know very little about. It’s not just the on-paper qualifications that make positions tricky to fill. It’s also the more subtle, personal qualities and values.
Even so, more and more companies are heading to the Philippines and experiencing great results. In fact it's ranked in the world's top 10 for offshoring destinations.
Why? What makes the Philippines such a great location? Short answer: it’s the people.
Here are 5 reasons why you'll find your perfect offshoring match in the Philippines.
Your primary concern when it comes to offshoring has to be communication—both between your offshore staff and your clients, and between your onshore and offshore teams. Successful offshoring starts with a communication plan, and that's really much easier when you speak the same language.
The Philippines is in the high proficiency band for English, ranking 14th in the world according to EF PI ratings. That's in the same group as high-income countries like Switzerland. It's higher than India, which comes in at number 28, Chile at 46, and Brazil at 53. (The highest level is where you'll find Sweden, the Netherlands, and Singapore).
English is one of the Philippines’ official national languages. In fact, 75 million Filipinos speak English, making them the world’s third-largest population of native English speakers.
When it comes to a good foundation for setting up off-shore, language cannot be overlooked. And if you start with the Philippines, it's a concern you can quickly cross off your list.
Cultural similarity can play a big role in your offshoring success. If the gap between your culture and that of your offshore team is too great, it can lead to performance issues and misunderstandings.
As a former colony of the United States (and, prior to that, of Spain), the Philippines is in many ways culturally similar to a lot of Western countries. If you were to visit Manila, you would, for instance, find the architecture familiar, as well as the lifestyle.
But it goes deeper than that. The Philippines scores five stars in terms of cultural compatibility with the United States according to Gartner's research. And the Hofstede model, a well-respected cultural analysis tool, shows the Philippines also shares many of the same values when it comes to doing business. For example, the United States and the Philippines both focus on performance, growth and profit, and both value reward for effort, achievement, assertiveness and success. Both countries embrace change and creativity, looking for different and new ways to achieve efficiency and better systems. They also score the same when it comes to the balance between short- and long-term outlook.
This is important when you're offshoring, because the people you're taking on are just as much a part of your company as those in your onshore office. And while diversity is extremely beneficial, it also helps to have some commonly held goals and aspirations, so you can pull together as a team, and ultimately work together efficiently and without added barriers.
“Malasakit” is a Filipino word which has no direct translation into English, but which broadly means to care for something or someone like it's one’s own. It’s a concept that exists broadly across Filipino culture and also specifically within the workplace, as businesses who have already taken the step of offshoring in the Philippines can attest to. And it's exactly the kind of work ethic you want in an employee - whether at home or abroad.
It's also important to understand that family is a cultural focal point of Filipino life. An employee is working, not just for their own financial and professional gain, but also to support immediate and extended family. If you provide a job worth having, you'll be rewarded with the loyalty that you're looking for in a workforce, and are unlikely to find in more individualistic cultures.
At a national level, you’ll find commitment to your business too, because the Filipino government has gone to great lengths to provide just the right environment for offshoring. The business process outsourcing (BPO) sector is extremely valuable to the Philippines economy—the third largest after tourism and foreign inbound remittances. It represents approximately 3.5% of services sector employment and accounts for at least $11 billion of annual revenues. As a result, the country has invested heavily in the infrastructure required to run offshore enterprises, such as technology, communications, transport, city planning and zoning regulations. It also offers a wide range of benefits to investors, including simplified import and export procedures, investment in training and tax exemptions.
Whether you look at it on an individual staff level, or a broader national level (and you should be doing both), the Philippines is a place where a high value is set on the offshoring industry. That means everybody wants you to succeed.
"We serve the world, and the world is better for it," former chairman of the IT & Business Process Association of the Philippines (IBPAP) Fred Ayala told an International Outsourcing Summit.
Customer service can make or break your reputation. With the rise of social media, customers now expect service at all hours of the day and night. That's probably what started you thinking about offshoring in the first place.
But along with availability, your customers want a high quality of service. Finding an offshore team that does both can be a challenge.
That's why the Philippines, which brands itself as having a "service-oriented culture, high productivity … advanced language and analytics skills, a superior quality of life, and loyalty", is the obvious place to find the level of service you're looking for.
Start digging for information about Filipino culture and the word "hospitality" will appear countless times. Caring about the needs of others is a cultural practice that permeates all levels of society, dating back long before colonial times, and remarked upon by all who have the privilege of experiencing it.
Perhaps unsurprisingly, the Philippines economy has done well out of tourism, and countless large multinational American and Australian companies have invested in customer service personnel and training in the Philippines for decades. In 2016, for example, 16 of the top 20 offshore call center projects were located there. All of that adds up to a Philippines labor market that’s rich in skilled customer service talent.
The Philippines provides an exceptionally high standard of education. More than 680,000 Filipinos complete university each year and, with more than 41 million highly trained people in the workforce, the talent pool in the Philippines is deep and rich.
You can outsource almost any position to the Philippines, from customer service agents, to mobile app designers, and you can also fill roles vertically, from entry-level to mid-level, right up to senior and executive levels.
How do you attract and retain such highly qualified staff? One of the financial incentives for you is the low cost of doing business in the Philippines. The average monthly disposable salary there is US$373 compared to $3,258.85 in the US. But the average compensation in the BPO sector is still more than double the average wage in the Philippines, making it a worthwhile choice for the country's best and brightest.
Offering training and advancement opportunities, rewarding good performance, and providing attractive conditions that prove you value your offshore workers just as you do the ones at home is the way to keep good employees in your corner. That's a lesson being learned by those already investing in the Philippines, because it's worth their while to do so, and it's seen the voluntary attrition rate drop considerably in recent times.
The value gained from outsourcing to the Philippines is possibly the world's worst kept secret, and when you understand a little more about the culture and the people, it's easy to see why.
To find out why the Philippines is one of the best offshore destinations for global teams, read this blog.
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