With the current labour and talent shortages worldwide, leaders must find cost-effective ways to grow and scale their businesses. This is why outsourcing is becoming an attractive option for many organisations.
According to Exploding Topics, the global outsourcing market is worth $92.5 billion in total contract value. Companies that use outsourcing services have observed that it enables them to focus on core competencies while cutting costs. In particular, companies that outsource to the Philippines can cut labour costs by 70 per cent.
The booming outsourcing industry provides organisations with numerous options to choose from when it comes to acquiring talent overseas. While there are several global outsourcing leaders in the world, the Philippines is the most viable option for businesses when outsourcing international remote employees. Taking a look at the BPO and IT-BPM industries and the Philippines’ positioning in these sectors will demonstrate why Filipino talent is a cut above the rest.
The IT & Business Processing Association Philippines (IBPAP) Roadmap for 2028 reports that the IT-BPM industry has grown not only in scale but also in its role and capabilities, from providing cost arbitrage to delivering value-add and business impact.
Because of the shift to online business models and the increase in self-service and digital channels, there’s a growing demand for IT-BPM services across different industries, such as technology, banking, retail and commerce and healthcare. North America continues to be the largest adopter of IT-BPM services, with a share of 37 to 41 per cent followed by Europe at 35 to 39 per cent.
On the other side of the coin, Asia Pacific has risen to the top as the location of choice for offshoring because of the talent-cost proposition, proficient English-language skills,
extensive domain and technical skills and high scalability potential.
The Philippines is the second largest IT-BPM services delivery location, with a 16 to 18 per cent share in the global IT-BPM services industry. It is a destination of choice for global services delivery because it provides the following:
Let’s take a closer look at the differences between the outsourcing services provided by India and the Philippines. As indicated in the image above, these are the top two service delivery locations in the world, so what are the differences between them?
India, being the first largest service delivery location, has good IT infrastructure and service capabilities and a large talent pool.
India has a low average salary and a relatively low cost of living, which provides companies with several cost-saving opportunities. For example, hiring a software developer in India would cost an average of 664.53 USD per month, while a developer in New York City would cost an average of 8,742.25 USD per month.
The Indian higher education system also focuses on science and technology, producing over 2.6 million STEM graduates annually, making India the preferred outsourcing location for software development services.
Meanwhile, the Philippines has a high adaptability to Western culture as most of the Filipino workforce has advanced English proficiency while being service-oriented. Fluency in English and familiarity with Western culture allow Filipinos to carry out customer service jobs easily, particularly for English-speaking businesses. The Philippines also provides tax exemptions that help the outsourcing industry while attracting businesses worldwide. The IBPAP Roadmap for 2028 also states that the Philippines produces approximately 850,000 fresh college graduates every year, boosting the talent pool within the country.
The Philippines currently has a strong position in the global outsourcing market, but what about in the next five or 10 years? Understanding the projected trajectory of the country’s outsourcing industry can give you the confidence and reassurance you need before partnering with a local outsourcing centre or service provider.
With the acceleration of digital transformation within the BPO industry, BPO and IT-BPM companies are future-proofing themselves by utilising technological solutions to increase efficiency and productivity while replacing roles that have traditionally been outsourced.
This enables BPO and IT-BPM companies to invest in quality talent to fulfil more complex tasks and step into larger roles. This will enable outsourcing services organisations to provide high-quality candidates with the right skill sets to businesses in need.
The Philippines is constantly evolving and adapting to market needs, ensuring that the outsourcing industry can deliver more complex and value-added services.
There are six key benefits to outsourcing in the Philippines for your business:
There are four common types of outsourcing that you can utilise for your business:
As employers, it’s important to be aware of your responsibilities in hiring international remote workers in the Philippines. You will need to provide employment contracts, proper compensation and work benefits in compliance with Philippine labour laws.
Partnering with an Employer of Record (EOR) will ensure that your business is compliant and that the best talent is hired for your team. An EOR can handle the necessary HR-centred administrative tasks so that you can focus your time and attention on your business. Using EOR services allows you to build a remote team that is a direct extension of your existing staff, without the hassle of creating an entity or ceding control over your business processes.
Outsourcing in the Philippines is a great strategy that you can utilise for your business especially as you start to grow and scale. The Philippines is one of the leading outsourcing industries in the world, providing highly qualified workers at affordable rates.
We’ve created the ultimate guide for everything you need to know about outsourcing and partnering with an Employer of Record. This will guide you in the steps you need to take as you build a team of remote employees based in the Philippines. Download our ebook for more information.
Jump straight to a key chapter