Customer service outsourcing is a common practice among businesses looking to streamline their customer service operations and reduce labor costs. In recent years, the Philippines has become a popular destination for companies looking to outsource their customer service needs.
With its large pool of English-speaking professionals and competitive labor costs, the Philippines has attracted the attention of businesses around the world. It even gained the title of the world’s call center capital in the last decade.
In this article, we'll explore everything you need to know about customer service outsourcing in the Philippines, including the benefits and why foreign companies prefer to hire Filipino agents. Whether you're a business owner considering outsourcing your customer service or a professional looking to join the industry, this article has something for you.
What is customer service outsourcing?
Customer service outsourcing is the practice of subcontracting third-party customer service companies to manage customer service tasks and inquiries on behalf of a business. This can include handling customer inquiries via phone, email, or chat, managing social media accounts, and managing complaints or issues that customers might have with a product or service.
Some examples of customer service outsourcing include:
- A retail company hiring a customer service outsourcing company to handle customer inquiries about product returns or exchanges
- A software company outsourcing its customer surveys to a customer service provider
- A restaurant outsourcing its reservation and order taking to a customer service center
- A clothing business outsourcing its live chat support to a customer support outsourcing company
Why is customer service outsourced to the Philippines?
A multinational company as successful as Google had outsourced customer service to the Philippines for a lot of reasons. Below are some of the top reasons why companies move their customer service operations to the Philippines:
Cost savings
Outsourcing customer service to the Philippines can be more cost-effective for businesses compared to hiring in-house customer service staff, especially for companies based in countries with higher labor costs. The Philippines has a low cost of living and is among countries with lowest average wages in the world.
As of 2022, below are the average rates of hiring a full time customer service agent in US dollars (using conversion rates as of April 2024).
- India: $1.78/hour
- Philippines: $2.12/hour
- Mexico: $6/hour
- USA: $15.94/hour
- Australia $33.08/hour
Language skills
The Philippines has a high English proficiency rate. In fact, it ranked 2nd for English proficiency, just after Singapore, and 20th globally.
This makes the Philippines an attractive location for companies looking to outsource customer service to a country where their customers are likely to speak English. Filipinos tend to have a neutral accent when speaking English, which is easier for customers to understand and can be less of a barrier to effective communication.
Skilled workforce
The Philippines has a large pool of educated and skilled workers who are trained in customer service and can provide high-quality support to customers. Many call centers in the Philippines provide extensive training to their employees to ensure that they are able to provide high-quality customer service. This training often includes language and communication skills, as well as technical training for specific industries.
Cultural fit
The Philippines has a culture that values customer service, making it an ideal location for outsourcing customer service. Additionally, Filipinos are known for their strong work ethic and dedication to their jobs. This can be beneficial in a call center setting, where employees may be required to work long hours and handle a high volume of customer interactions.
Also, the Philippines has a strong affinity with Western culture, making them an ideal employee of some of the big companies in Western countries.
Time zone advantages
The Philippines is in a time zone that is convenient for companies in North America, Europe, and Australia, as it is only a few hours ahead of most of these regions. This allows for seamless communication and support for customers in these regions, as employees in the Philippines can be available to take calls or handle inquiries during normal business hours in these countries.
For example, a call center in the Philippines can have staff working during the day to support customers in the United States, and then have a different shift of staff working during the night to support customers in Europe. This allows for continuous support for customers in different time zones.
What is the top outsourcing industry in the Philippines?
Customer service outsourcing is the top outsourcing industry in the Philippines. There is a high demand for call center services from companies around the world, and the Philippines has a large pool of educated and skilled workers who are well-suited for this type of work.
In fact, the BPO industry in the Philippines currently employs around 1.3 million people in over 1,000 BPO companies since 2019. The country’s customer service outsourcing industry is expected to continue growing in the coming years, driven by the increasing demand for outsourced services and the country's favorable business environment.
Apart from customer service outsourcing, some of the outsourcing industries that are growing at a rapid pace are information technology, ecommerce outsourcing, legal services, and finance.
Why are Filipinos the best at providing customer service?
There are several qualities that foreign companies often appreciate in Filipino call center agents. Below are the major reasons why Filipino call center agents are deemed to be the best at providing customer service across various industries:
Fast learner
Additionally, Filipino employees are able to communicate well with anyone right away. Filipinos are skilled at picking up new languages rapidly since they are quick and trainable students. This is one of the factors that foreign employers in a variety of industries favor hiring Filipino workers.
Most importantly, Filipinos have a high English proficiency rate, which allows them to communicate effectively with customers in English-speaking countries.
Cultural awareness
Filipinos are known for their strong customer service skills and cultural awareness, which can be beneficial in helping them understand and meet the needs of customers from different cultural backgrounds.
Cultural awareness can affect the employer-employee relationship and ultimately the quality of outsourced services. Companies abroad prefer to hire Filipino employees because they get along well with clients from different cultures as well as foreign bosses and co-workers.
Professionalism
Filipinos are known for their professionalism and dedication to their work, which can be important for companies looking to provide high-quality customer service. Also, Filipinos are known for their ability to follow rules and procedures. This makes them well-suited for roles that require a high level of attention to detail and adherence to rules and regulations.
Adaptability
Filipinos are generally adaptable and able to quickly learn new systems and processes, which can be beneficial in a call center setting where they may be required to handle a wide range of tasks.
Moreover, Filipino call center agents are generally adaptable in terms of working across different time zones. They are perfect for retail businesses that want to provide their customers with after-hours customer service.
Outsource Your Customer Care Needs to ManilaPros
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