The Philippine outsourcing industry is among the fastest growing industries in the Philippines, with a recorded $29.1 billion worth of revenue in the first half of 2022. This is due to a number of international companies investing in the country’s competitive workforce.
However, it’s not always sunshine and butterflies for the Philippine outsourcing industry. There are also challenges that surround the multi-billion industry. In this article, we listed down some of the frequently asked questions about the Philippine outsourcing industry and how you can leverage it to grow your business.
Is Outsourcing good for the Philippines?
Outsourcing is good for the Philippines since it can increase employment and open up new business prospects. Due to the availability of competent and talented people as well as the country's cheaper labor costs as compared to other nations, many businesses choose to outsource specific business functions to the Philippines. This can serve to boost the economy and give people job opportunities they might not have otherwise had.
How does outsourcing affect the Philippines?
Both positive and negative effects of outsourcing may be felt in the Philippines. On the positive side, outsourcing can create jobs and business opportunities for the country, which can support economic growth and provide employment to people. Additionally, it can give businesses access to qualified and skilled personnel for less money than they could pay in other countries.
On the potential downside, outsourcing can result in more job competition, which might result in lower wages and make it harder for some workers to obtain work. Moreover, it may result in a reliance on outsourcing, which could leave the nation's economy susceptible to changes in the world market.
Overall, the effect of outsourcing on the Philippines will vary depending on a number of factors, such as the particular industries and jobs being outsourced as well as the overall state of the economy.
Does the Philippines benefit from outsourcing?
The Philippines can benefit from BPO (business process outsourcing) in several ways including:
- Employment opportunities: BPO provides jobs for many people in the Philippines, which can help to stimulate the economy and reduce poverty.
- Foreign currency: Companies from other countries pay for the services provided by BPO companies in the Philippines, which can bring in foreign currency and boost the economy.
- Improved infrastructure: BPO companies often invest in technology and facilities to support their operations, which can help to improve the country's infrastructure.
- Economic growth: By providing employment and foreign currency, BPO can contribute to economic growth in the Philippines.
- Access to skilled workers: BPO companies in the Philippines often have access to skilled and knowledgeable workers, which can benefit the companies that outsource to them.
- Lower labor costs: The cost of outsourcing in the Philippines is relatively lower compared to other countries, which makes it an attractive destination for outsourcing.
What is the main problem faced by the Philippine outsourcing industry?
The main problem faced by the Philippine outsourcing industry is intense competition from other countries, such as India and China, which have also emerged as major players in the global outsourcing market. This competition can drive down prices and make it difficult for Philippine outsourcing companies to compete.
Additionally, the rise of automation and other technological advances has led to concerns that outsourcing may become less necessary in the future, which could pose a threat to the industry. Other challenges faced by the Philippine outsourcing industry include high turnover rates and the need to continuously improve the skills and knowledge of workers to remain competitive.
How does outsourcing affect the Philippine economy?
Outsourcing can affect the Philippine economy in a number of ways. As we have mentioned, outsourcing can improve a country's economy by creating jobs and business opportunities, which can boost growth and lower poverty. For example, many companies choose to outsource chat support and phone support to the Philippines because of the availability of skilled and knowledgeable workers. This can create jobs and provide people with income, which they can use to buy goods and services, boosting the economy.
The negative impact of outsourcing on the Philippine economy is the increased competition for jobs, which might result in lower compensation and less job opportunities. For instance, if a business chooses to onshore its customer service operations in the Philippines, it can result in job losses for customer service agents in the business's home nation.
Additionally, if the Philippine economy becomes too dependent on outsourcing, it can make the country vulnerable to fluctuations in the global market. For example, if a company decides to move its operations to a different country with lower labor costs, it can lead to job losses and economic downturn in the Philippines.
Is outsourcing harmful in the Philippines?
Outsourcing can be both harmful and beneficial to the Philippines overall. It has pros and cons such as boosting the economic revenue and increased competition in the job market, respectively. Therefore, it is important for the Philippine government and businesses to carefully consider the potential risks and benefits of outsourcing, and to take steps to mitigate any negative effects. This could include investing in education and training to improve the skills of workers, and diversifying the economy to reduce reliance on outsourcing.
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