Benefits and Advantages of Staff Outsourcing in the Philippines
When there is talk about Staff Outsourcing, the Philippines always comes up as one of the top options for businesses. Why is that, you ask? Because the country has a proven track record of success in business process outsourcing (BPO) services throughout the modern world. Global companies such as Accenture, Teleperformance, and JP Morgan chose the Philippines for IT, procurement, human resources, and finance services. Currently, the Philippines’ global BPO market share is estimated to be at 13%. In 2024 alone, nearly 1.7 million Filipinos are estimated to work in the BPO sector. Aside from overseas Filipino workers, the BPO sector’s employment of highly skilled workers is one of the country’s economic drivers.
In this article, we delve into why the country is a leader in the Staff Outsourcing industry by looking at the benefits (and challenges) a small, medium, or large UK business can take advantage of in the Philippines.
1. It’s a cost-effective business move
Imagine saving up to 60% of costs on wages. The British pound sterling or US dollar has a strong buying power in the country, so the cost of living is low. Labor costs are significantly reduced and recruitment is much cheaper. When opening up an office, you will encounter reduced utility costs, reduced equipment costs, and lesser rental fees. If you choose a reliable BPO partner, they will even handle the start-up for you.
2. You have better access to a highly skilled workforce
The Philippine government sponsors state-run courses that are BPO-industry-related skills which are a great advantage to its more than 440,000 students graduating from universities every year. The Philippines also has a high English proficiency level, ranking 20th out of 113 countries in the 2023 English Proficiency Index of Education First (EF). English is also the official business and legal language in the country.
3. Cultural compatibility and an excellent work ethic
The Philippines was once a colony of the US, as such it’s more oriented and familiar to Western business practices. Filipinos are also hardworking with a service-oriented mindset, which is a much-needed skill in call centres. Filipinos are also known for their friendly nature and hospitality. They are naturally productive and dedicated to giving quality results. They need little to no supervision in the workplace and boast a young and active workforce willing to upskill and learn in their industry.
4. Government support, tax benefits, and exemptions
Nearly 1.4% of the Philippines population works in the BPO industry as such the government recognizes the BPO sector as a major employer and growth driver. It provides support by way of exemption from import duties and taxes. Foreign nationals are also permitted to work in a supervisory, technical, or advisory position for five years. There is also a 4-6% income tax holiday for pioneer or non-pioneer enterprises. Permanent resident status is also given to foreign investors with an initial investment of $150,000. Businesses also have the option to pay a special 5% tax on gross income earned instead of all national and local taxes.
The Technical Education and Skills Development Authority of the Philippines (TESDA) also provide funding support for call center training.
5. A Growing BPO hub with robust IT systems
The Philippines is home to large IT parks dedicated to the BPO industry. It also has several special economic zones and high-speed internet in urban areas which can facilitate efficient communication and collaboration for remote teams and clients. In 2023 alone, the Philippines was estimated to have earned USD 720 million in revenue and this trend is only expected to rise by an annual growth rate of 9.04% CAGR from 2024-2029.
6. Focus on core business functions
Staff Outsourcing your back-office admin tasks in the Philippines will help you focus on core business functions that generate the most revenue. Your in-house employees will also be relieved from tasks beyond their expertise. Staff Outsourcing is a great option for better work-life balance for your overworked team. The Philippine +8 GMT zone is also ideal for UK businesses as there is no graveyard shift from both ends, improving productivity and collaboration. If you choose the right Staff Outsourcing partner in the Philippines you also reduce your legal liabilities as the responsibility lies with your service provider.
Conclusion
The rise of the Philippines’ BPO industry is driven by several factors such as government support, a skilled workforce, and cultural affinity to the Western market. Despite infrastructure constraints, it’s still a favorable business environment, and the industry is only expected to grow in the coming years. Before choosing to outsource, UK businesses are also obliged to research challenges they may encounter in the country such as data privacy concerns and the risk of job displacement in their country.
Always consider the potential benefits and challenges when Staff Outsourcing in any country, just take into consideration that the Philippines has a thriving BPO industry that you can leverage today.
BPO Ninja is your source for up-to-date information on Staff Outsourcing in the Philippines. Whether you are a small or medium UK business seeking new team members, BPO Ninja can help you build your remote team. Reach out to a member of our staff through our contact form for further assistance.