Offshoring to the Philippines is no longer a crazy business idea. Rather, it is already a reality. This offshore outsourcing destination can take away your worries about hiring employees while saving you time and money while meeting any desired deadline.

Offshoring in the Philippines has become an increasingly attractive option for companies, having been long known for its high standard of education, English proficiency, cost-efficiency, religious diversity and rich cultural heritage. There are many benefits that organizations get by offshoring their work to the Philippines

Here are some of the best and unique advantages of why businesses choose to offshore to the Philippines.

But first, let’s talk about Offshoring. What is it?

Offshoring is the practice of contracting with an offshore company to perform work. Principle decision criteria can include costs, timeliness, and expertise. Offshore outsourcing is offshoring by a larger firm for its benefit. Conversely, offshoring can be offshore outsourcing by a smaller entity for another's benefit.

Offshoring can be simply defined as a change in a business process that moves some or all tasks overseas from their location domestically. In other words, offshoring involves moving services provided by businesses located in one country to workers located in another country.

It is important to understand that offshoring is not the same as outsourcing. When a company decides to outsource its services, rather than offshore them, it does so by hiring an outside company in another country.

For instance, if Company A hires Company B in another country to complete some of its work instead of doing it or hiring Company C domestically to do so, then Company A is outsourcing. However, if Company B is hired solely because the cost per worker is lower in this other country then Company A has offshored the task.

Offshoring is the practice of moving business processes to lower-cost countries or regions. The Philippines has become an attractive location for offshoring, with its English-speaking workforce.

It’s been reported that 85 per cent of Filipinos speak English as a second language—making it easier for offshore outsourcing firms to find quality talent. In the country, there are around 1,000 foreign operating companies currently involved in offshoring work from more than 30 different countries. Moreover, the use of ICTs is another important factor why many have chosen to do business here.

The Philippine technology sector grew by 10 per cent last year and the IT-business process outsourcing (IT-BPO) industry has been steadily growing since 2000.

The country is now the world's top provider of customer support and business process outsourcing (BPO) services. In fact, at a 26 per cent market share, the Philippines has become the second-largest destination for IT-BPO exports in the world—surpassing India (20 per cent) as well as China (17 per cent).

Typical offshore outsourcing projects include software development and information technology-enabled services (ITeS), which includes all forms of BPO such as customer relationship management (CRM), medical transcription, data entry and product research and testing.

Several US firms have chosen to outsource work to the Philippines because it offers a large pool of English-speaking, college-educated workers who have been exposed to Western culture. There are more than 1,000 US companies that have relocated offshore activities to the Philippines, which include Accenture, Hewlett-Packard (HP), IBM, NCR Corporation and Electronic Data Systems (EDS).

According to outsourcing industry executives, another benefit of doing business in the Philippines is its geographical location. Being an archipelago close to some of Asia's largest markets has made it easier for Filipino offshore workers to provide support services at lower costs.

India used to be considered the top destination for offshoring work because English was not the official language there. However, many offshoring clients are beginning to recognize that India's pool of college graduates has become saturated. On the other hand, only about 20 per cent of Filipinos hold a two- or four-year college degree, which still makes it easy for companies to find workers with the right qualifications.

Still another factor driving offshoring to the Philippines is its lower cost of doing business. Filipinos are generally paid about one-third of what their Western counterparts make. Moreover, unlike offshore outsourcing firms in India and China, Filipino companies do not require clients to provide office space or utilities. They will be more than willing to set up satellite offices at client locations if necessary.

Accordingly, moving offshore activities to the Philippines can help businesses reduce costs by as much as 50 per cent compared with other destinations such as China, Mexico and Eastern Europe—while also ensuring that only high-quality services are delivered on time.

This is why more and more businesses are turning to the Philippines as their preferred destination for offshoring work.

The Philippines is one of the most popular offshoring destinations in Southeast Asia. Its location to many Asian customers, good telephone connection and - most importantly - close to the USA are some of its biggest advantages.

The city Cebu is on top of the list of offshore locations in the Philippines. This may be due to it being the home town of IT outsourcer Sykes which has become one of the best-known suppliers of call centres. Since every good offshore company will prefer to work with a partner who can guide him through complicated legal situations, these connections are very important.

Most offshoring companies do not have any development activities themselves but rather act as service providers for offshore software development companies they co-operate with or represent. This means they will work with many offshore software development companies and offer their services as management or back office to these. Some offshoring companies offer only a single service, for example, voice process outsourcing (VPO) by providing call centres, while others focus on a specific industry such as the pharmaceuticals industry.

If you are about to outsource business processes that require constant contact between your company and your customer then you should choose a partner who provides personal support throughout the whole process from initial enquiry until the actual start of cooperation.

Many companies have been burned when they found themselves dealing with some unknown offshore company without any way of getting in touch quickly if problems arise. To decrease this risk, you should choose a company that is not only easy to get in touch with but also has their own offices and personnel on-site if necessary.

The best providers will have large, modern buildings which can give off the impression of stability and responsibility. They will certainly do their best to not only impress you during your first visit but may even offer to take you out for dinner or lunch as part of building the right long-term business relationship.

Offshore companies compared to their western counterparts rarely provide any references from clients they have already worked with. The reason is simple: no offshoring company wants its competitors to find out about their customers and then trying to poach them away. For this same reason, you shouldn’t ask for such references as part of your initial enquiry.

Offshore software development companies may also be reluctant to share information about their employees because they know that their staff will work more effectively if they think nobody knows who is working for which company. However, many offshoring companies do provide a list of reference customers on request and some even offer video testimonials from their satisfied clients. Some offshore software development companies may not be able to help you with this though since some cultures or industries prefer to keep such things secret. In case you are dealing with an Indian organization try asking for references from the same industry as your business processes instead.

To get a better understanding of how well offshoring works in practice you look at previous projects the potential provider has implemented and how these were executed. Offshoring companies may be reluctant to answer such questions as they do not want their competitors to find out about their customers' projects.

Referrals from other partners you already work with will most likely provide the most reliable references you can get. A good offshore company should be able to give strong references from partners they have already worked alongside for a long time; the same goes for local software development companies where your company is based or which operate in your home country/region: they won't want to risk their reputation by working with offshore offshoring companies they know nothing about. 

In general, when looking for offshore team members, the pay is lower. But in actuality, offshore teams tend to produce higher quality work despite having a lower rate of pay per hour/day/week. This is because good people will always do their best regardless of being paid meagerly, but poor workers will just try to take advantage of your company by taking your money and not doing anything useful in return.

One thing you must remember is that offshoring requires a different approach in managing staffs' time. A lot of western entrepreneurs find it easier to manage employees from their own country rather than foreigners working from afar. This concept is pretty much understandable since managers have been running things this way since they were born. In addition, most of them find it more comfortable to work with individuals who share the same culture and dialect as they do.

However, this behaviour will be a little difficult to handle--and can even cause problems on communication and accountability, which are the key reasons why startups hire offshore team members in the first place. In order words, you MUST work closely with your staff from another country by spending time communicating with them every day of the week.

In addition, I suggest using a special type of software that allows managers/owners to monitor their employees' computer screens at any given moment. You must use such a tool if you want to retain control over how your staffs do their assigned tasks.