For the past decade, the Philippine economy has gone from strength-to-strength, not least in part to its burgeoning reputation as one of the best places to have business process outsourcing (BPO) work done. If you take a look around many cities here, you will see many familiar western company names such as J. P. Morgan, Goldman Sachs, IBM and Teletech, all of whom have chosen to outsource some of their process work to third-parties in the Philippines or set up their own facilities here. There are multiple reasons for this and below are some which many companies consider.
Lower labour costs
A business’ primary objective is to make a profit, and labour costs are usually one of the biggest expenses, but thanks to the lower salaries in the Philippines, businesses are able to increase their profit margins by outsourcing here. The minimum wage in the Philippine capital, Manila, is around $10 per day, and while workers in the BPO industry are usually paid more than this, this still dwarfs the amount a US or UK companies would pay their workers locally. For that reason alone, outsourcing this type of work to the Philippines should be considered.
High level of English
This is also of great importance for western companies that require English speaking workers. English, alongside Filipino, is one of the national languages (thanks to previously being a US colony), and this makes communication much easier. The population is also fairly well educated and are considered as having a neutral accent. Many jobs that take advantage of this are contact centres, transcription services and even outsourcing the need for virtual assistants. Many companies and individuals are enticed by the lower wage as well as great communication skills, therefore allowing their work to run smoothly.
The government has realized what a crucial role BPO’s play in the country’s economy – it accounts for around 9% of GDP – and has therefore sought to invest in infrastructure in order to entice companies to certain “business districts” or “I.T Parks”. While a decade or two ago there were not many modern buildings being built, they are now springing up everywhere with designs and facilities that wouldn’t be out of place in a western countries. From modern architecture buildings with gyms, high-speed internet, high-end restaurants all the way down to small modern touches like meeting management software to book conference rooms. The government has recognised this industry’s importance and has successfully attracted investment to keep it going and moving forward.
Time differences are less of an obstacle in the Philippines, due to the the abundance or labour and their willingness to work hours that those in the US and UK would be less willing to work. Night work is paid extra, but not so much that it is no longer viable for companies to proceed with. Filipinos are known to be very flexible and accommodating, allowing them to work around clients schedules without much fuss.