Outsourcing is a business process wherein a business assigns a service provider to perform repetitive tasks outside of the company’s grounds. The service provider will use or hire their own staff to do these tasks with the assurance of delivering the best results, which promotes an effective solution in keeping the business’ functionality, without spending too much. Although outsourcing may seem to be a good choice, there are still some things business owners need to consider before moving to the process, especially if you’re planning on outsourcing your business overseas.

The Philippines is one of the countries in Southeast Asia that tops the rank for having the most excellent BPO companies and services worldwide. This is one of the main reason why businesses from around the world are thinking of outsourcing to the country. However, there are some things to check before you start outsourcing to the Philippines. I’ve listed some of the Pros and Cons of outsourcing to the country which I think could help you in deciding.

Here are the Pros and Cons of Outsourcing to the Philippines.

Communication won’t be a problem as Filipinos are known to have strong English-communication skills. According to the EF English Proficiency Index, the Philippines ranks 20th out of 100 countries and regions who can speak English fluently. The Philippines also ranks 2nd in Asia. This makes it easier for foreign business to work and collaborate seamlessly with Filipino employees.

The Philippine government has continued supporting the BPO industries in the country since 2013. This includes collaborating with universities to create BPO specific curriculum, to promote growth for both employed and aspiring BPO workers. eLearning solutions such as the LEAP or the Learning English Application for Pinoys are designated to train and help senior high school and college students meet the BPO demands after graduation.

In accordance with the previous advantage, the results of the BPO training provided by universities and government-affiliated training centres in the country produced thousands of highly-capable employees yearly. According to PSA or the Philippine Statistics Authority, universities produce over 700 thousand graduates, in which most are qualified and capable of handling BPO-related tasks. 

Outsourcing operations usually include the sharing of confidential business data. The Philippines has passed the Data Privacy Act in 2012 to promote confidentiality and security for business owners. This ensures the client’s data privacy and security by implementing strict regulations to protect data from unauthorized access.

One of the main advantages and the biggest reason why companies outsource to the Philippines is because of the country’s cost-effective labour. The cost of labour in the Philippines is almost half of that in the US, UK, Australia and other western countries. On the other hand, outsourcing to the Philippines also lets business owners save on other expenses such as paying for office space, legal and HR costs, equipment, taxes and so on.

According to statistics, businesses can save an average total of over 60% of their expenses simply by outsourcing to the Philippines. 

An employer cannot fire an employee at will in the Philippines. This requires a justifiable cause and proper documentation in order to terminate any Philippine employee. In addition, the termination of an employee also requires that the company will provide the allocated severance pay. 

The Philippines labour code requires organisations in the Philippines to pay employees an additional 13th-month pay yearly. In some cases, some organisations are giving their employees 14th-month compensation. This additional month(s) of payment is paid in December as a mandatory bonus to employees and is done to show concern for the plight of the Filipino working masses.

The Philippines has a total of 18 official non-working government and religious holidays. However, employers are allowed to ask their employees to come to work. Therefore, BPOs rest this with their client’s discretion, as Philippines labour laws mandate that employees get paid more when they work during legal holidays.