Every company wants to cut costs, improve efficiency, or maximize human capital, but few can. Many that succeeded dealt with these problems by hiring remote employees and BPOs, outsourcing internal processes from tech support to accounting outsourcing in the Philippines.
Global BPO growth is rapid. It’s worth billions in the Philippines alone due to global companies outsourcing to this country. Not to mention, IT outsourcing to the Philippines, as well as outsourcing services like customer care and accounting, is growing in popularity.
Read on to find out why big companies choose IT, accounting, or tech support outsourcing to the Philippines and how doing the same can help you expand your team at a fraction of the cost.
What Is Business Process Outsourcing?
Business Process Outsourcing (BPO) is when a company contracts a third-party service provider to handle or perform its non-core business tasks. Some immediately associate BPO with call centers, which are only one component of the BPO industry.
BPO encompasses two key company functions: front and back offices outsourcing. Front-office tasks involve those that directly deal with clients, like a call center. On the other hand, the back office provides support services and administrative activities like BPO data entry, IT, accounting, and HR.
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Over the past few decades, the BPO business has grown from low-end, unstructured services with a single focus to a global giant with a wide range of services and expertise. IT (54%), finance (44%), payroll (32%), and customer service or contact centers (22%), were the most outsourced services in 2021.
Despite the COVID-19 outbreak and economic challenges, the global BPO industry continues to grow, even possibly reaching $381 billion by 2030. Filipinos’ soft skills, such as proficiency in English and cultural affinity for the North American markets, make the country a BPO powerhouse.
What Are the Different Types of Outsourcing?
The types of outsourcing can be grouped according to the location of the service provider:
- Offshoring: This is outsourcing abroad, either to a neighboring country (nearshoring) or a distant one (farshoring). An example is a US firm with BPO consulting in the Philippines. Companies wanting to cut down on labor costs choose this, but its success relies on factors like strong team communication and training.
- Nearshoring: As said earlier, this is outsourcing to a neighboring country. For example, a company based in Germany could outsource to Poland. Organizations that want no to little time change, and cultural and language differences, among others, choose nearshoring.
- Onshoring: This is outsourcing business processes within the country to a cheaper location. Companies that need to be close to their service providers, like an automotive company that needs to be close to technical support providers, choose this. It allows them to get the fastest customized services.
Each method of offshoring has pros and cons, and largely depends on the outsourcing destination. Base your decisions on your company goals, available resources, and other corporate requirements.
For instance, accounting or tech support outsourcing to the Philippines may be a great way to cut costs related to human resources. IT outsourcing companies in the Philippines have earned a reputation for adapting to the client’s needs.
On the other hand, nearshoring may guarantee similar cultures, languages, and time zones but could be expensive because of the localized costs of living and wages.
Credits: MART PRODUCTION
What Are the Forms of BPO in the Philippines?
BPO takes many forms, but the following are the most common:
- Knowledge Process Outsourcing (KPO): Service providers have greater experience and competence in an area than the companies they are serving, thus providing these companies with a team of experts. However, they tend to charge more than regular BPOS. Their services include market research, accounting functions, programming, and more.
- Legal Process Outsourcing (LPO): A subset of KPO, LPO entails outsourcing legal tasks like contract evaluation, skip tracing, intellectual property management, and more. Confidentiality is a vital consideration when hiring an LPO provider, as is knowledge of local legislation and expertise in the contracting company’s industry.
- Recruitment Process Outsourcing (RPO): This involves sourcing, filtering, interviewing, and making proposals on behalf of the contracting company. This industry could reach $43.8 billion by 2024 as more companies hire on-demand (recruiting when needed) or full-service (ongoing HR management) RPO.
- Research Process Outsourcing: RPO can also mean market research outsourcing, which includes data collection, analysis, report authoring, and consultation. Make sure to contact the correct RPO provider since recruitment and research are extremely different.
You may look into BPO consulting in the Philippines for IT needs or outsource accounting services.
How Does Philippines BPO?
Business owners and executives outsource key functions for many reasons, from lack of staff to needing additional service support.
Typically, business owners or executives:
- Determine operations to outsource and decide whether outsourcing makes sense. They look into whether a third-party service provider can perform the function better and help them save money, enhance flexibility, improve performance, and refocus resources to core business capabilities.
- Identify the scale of change management needed. Shifting the work from in-house to an external provider will affect the staff, established processes, and existing workflows.
- Check turnover rates. You might outsource specific IT services to a firm, only to find out later that they’re having problems keeping that department staffed. Turnover rates indicate how the company is doing in terms of staff retention.
- Review their budget. Shifting from an in-house to an external provider will impact their finances, not only in terms of shifting expenditures but also in terms of corporate taxes and reporting requirements.
- Look into whether to invest in new technologies. The scope of the function being outsourced and the maturity of the technology infrastructure in place at both organizations will determine the extent of the new investment.
- Decide whether to outsource to single or multiple vendors. For example, they could outsource all HR activities to one provider or contract one for payroll and another for contract reviews.
- Request proposals. After looking into all considerations, they list requirements and a specific scope of work for outsourcing. They use these to create a request for proposals from vendors if requirements can be met at what price and with what value-adds.
Once the owners or executives have decided which supplier or providers to hire, they must decide on the type of contract. Such contracts are typically classified as one of the following:
- Time and materials contracts: They pay for the time worked and the materials used.
- Fixed-price contracts: They pay a set upfront price for a specified work.
They must also draft a service-level agreement (SLA) with the vendor. This agreement spells out in writing the quality of the services that will be given and how success will be measured.
Depending on what needs to be done and what kind of work is being outsourced, owners or executives may also be able to negotiate with providers to include:
- Specific workers or teams dedicated to the outsourced accounts
- Only workers onshore or, conversely, globally distributed teams
- Workers available only during set hours or 24/7
Credits: Mikhail Nilov
Why Should You Work with One of the leading BPO Companies in the Philippines?
Deloitte found that 70% of businesses outsource to cut costs. Businesses often look to outsourcing IT support to the Philippines, driven by the need for flexibility, speed to market, and easy access to relevant resources. Working with a BPO provider is a worthwhile endeavor because it:
- Decreases costs: Outsourcing cuts in-house costs like staffing, planning, and office space lease. Outsourcing also mitigates the risk of hidden costs like insurance, taxes, and benefits. When you work with an outsourcing firm like Remote Employee, we take care of those elements when we bring the personnel on board.
Developing countries also offer lower labor costs, such as in the case of the Philippines’ accounting outsourcing industry. Besides, you can use variable-cost models, like administration plan costs, instead of fixed-cost models required for local personnel.
- Empowers companies to focus on key functions: You can focus on core competencies rather than non-essential tasks when outsourcing. By turning to, say, competitive accounting outsourcing in the Philippines, you can pay more attention to business differentiators and considerable development, thus boosting company value.
- Helps expand global footprint: Most BPO companies serve customers in several languages 24/7, helping your company expand globally. You can offer products and services to countries across the globe and not worry about tech support with BPO agents able to speak the local language and work the local time.
- Allows flexible operations: When you outsource non-essential tasks, you can act more quickly and effectively while dealing with the risks of putting in place new environments or services. You can also move internal resources to more important tasks to help make sure everyone is included and responsibilities are shared.
- Improves speed and efficiency: When you assign tasks, you give them to experts, thus saving your time, while improving accuracy in outputs. Outsourcing tech support services to the Philippines, for example, lets you focus on operations without worrying about downtime and maintenance.
- Diversifies your talent pool: Diversity means stronger intellectual capital, leveraging people’s unique talents, thoughts, and creativity. You can extend your company’s brain power beyond your office and work with global experts.
- Scalability: Outsourcing helps manage resources effectively. For example, accounting outsourcing services in the Philippines can be adjusted depending on the expanse of your portfolio, increasing or decreasing workloads and professionals as needed.
What Are the Risks or Challenges Associated with Philippines BPO Industry?
Below are some of the potential risks companies might encounter when outsourcing.
- Communications: Miscommunication is a major risk of outsourcing. Dissatisfaction for both you and your BPO provider results from poor communication. Develop ground rules. Set business hours, communication standards, and escalation procedures. Brief the provider and set the context.
A BPO provider that’s been in the industry for a while knows how imperative it is for a business to have a team that is fluent in English and communicates well and clearly.
- Control or general oversight: Outsourcing automatically makes you a manager. Even though the BPO provider may complete projects, you must control the timeline and ensure everything stays on track. Streamline project management by setting goals, tracking KPIs, and creating timelines.
The right BPO provider supports you in training your team the best way you see fit, guaranteeing continued high-quality work.
- Offshore collaboration challenges: This is especially a concern with offshore outsourcing. Though often not too significant, language and time differences might affect productivity. Similarly, legislative inconsistency could be an issue. Before contracting with an offshore BPO provider, consult an international lawyer or see if the BPO has US locations.
Quality BPO providers recruit team members fluent in English and with neutral accents, so you don’t need to worry about collaboration.
- Data security: Outsourcing also poses security threats since you have to share access to important data and account credentials with a BPO provider. Prevent security breaches by discussing security protocols with the provider, limiting the provider’s access to critical data, and asking the provider to sign a non-disclosure agreement (NDA).
Remote Employee makes these concerns nonexistent. With your own English-speaking staff and experienced team members, it’s easier than ever to outsource accounting to the Philippines or any other role you need to fill. We work with your budget and discuss the data security measures in place to help you stay compliant.
Credits: Mikhail Nilov
Outsourcing to the Philippines
BPO has been successful for years, and the Philippines has been the top destination. This nation has over 700 BPO companies, and it leads voice-related services with 13% of the worldwide BPO market.
Let’s look at what this nation has to offer in terms of BPO.
Remote Employee a BPO Company in the Philippines That Specializes in These Services:
An IT outsourcing company in the Philippines may fix IT issues on behalf of your in-house employees, while outsourcing accounting to the Philippines entails having experts manage your books and finances. The country’s BPO industry offers a wide range of services.
Philippine BPO companies may specialize in any of the following services:
- Data entry: BPO providers’ teams convert information to a digital format before encoding it into a computer system. The provider is responsible for the storage, management, and security of data. It can be a very time-consuming process, making outsourcing data entry a reasonable option.
- Customer support: BPO agents or representatives assist customers or clients via phone calls, chats, SMS, or emails. They deal with customer inquiries, requests, updates, and complaints.
- IT services: Common examples of IT outsourcing in the Philippines include fixing technical issues, overseeing networks, installing new hardware and software, and staffing help centers. There are also emerging players in IT service desk outsourcing in the Philippines.
- Technical support: When outsourcing tech or IT support to the Philippines, specialists answer your customers’ questions regarding products and services. BPO companies may provide various services from as simple as answering questions via phone or as complicated as diagnosing and correcting software problems on computers.
- Financing and accounting: BPO accounting firms have professional accountants and advanced accounting software to handle your company’s finance and accounting needs. Outsourcing accounting in the Philippines, for example, can help you minimize errors and enhance productivity.
- Marketing: An IT outsourcing company in the Philippines may offer a wide range of marketing services from SEO (Search Engine Optimization) to market research and strategizing. The BPO company may design your landing pages or paid ads to generate leads and increase conversions or manage your social media campaigns.
- HR support: RPO providers manage either the entire or part of your HR process. They will streamline your hiring process by screening resumes, as well as interviewing and shortlisting candidates. They may also handle the onboarding and training of new hires, tax filing, payroll management, and other legal HR-related activities.
- Collections: BPO providers have a professional collection contact center that handles both accounts payable and receivable, relieving your in-house team of the burden. This BPO team may also handle early or late-stage collection outsourcing.
- Software and app development: BPO companies have developers to create software or apps for your company. About 60% of organizations outsource app development, to reduce project costs, speed up time to market, and achieve high-quality products.
- Healthcare admin: By 2026, the global healthcare BPO market could reach $468.5 billion as more healthcare companies outsource non-core operations. BPO firms offer various services like telehealth and remote patient monitoring as well as appointment scheduling, and billing.
Why Should You Outsource to the Philippines?
From tech support to accounting, outsourcing to the Philippines proves to be a worthwhile strategy for the following reasons:
- Low cost: For reducing labor and operating costs, the country’s low living costs and wages are attractive. Philippine BPO firms charge $12–$14 per hour on average, compared to $24–$28 in the US. Hiring a Philippine BPO provider reduces operating costs by 50% and labor expenditures by 60%.
- 24/7 customer service: Over 75% of service teams provide customer support outside of business hours. Businesses increasingly go above and above for their customers. The Philippines’ Pacific Rim location lets BPO firms operate 24/7. You are guaranteed employee availability and reliability.
- English as a second language: One factor for Filipinos being world-class professionals is that they speak English well, thanks to the English medium instruction from elementary school to college. The E.F. English Proficiency Index ranks the country 22nd out of 111 countries in English language skills.
- Available and skilled talent: Colleges and state-run universities were predicted to graduate over 1.6 million Filipinos in 2022. Outsourcing tech support to the Philippines lets your company enjoy bilingual, well-educated workers who can tackle outsourcing issues. Design, computing, and managerial skills are also easily taught in the country.
- Cultural fit and personal qualities: Filipinos have a better understanding of Western culture thanks to its American colonial past. Filipinos value hospitality, patience, politeness, empathy, resourcefulness, resilience, and hard work—all qualities associated with excellent customer service.
- Government BPO growth assistance: The government is investing in the BPO sector, which accounts for more than 10% of GDP or about $30 billion per year. To grow and expand, BPO companies receive tax breaks from the DTI, BOI, and PEZA. This drives government support for the expansion of BPO.
- Future of Philippine BPO: Recent unprecedented circumstances made the BPO sector invest heavily in artificial intelligence, but the human touch remains.In the next six years, the Philippines’ tech support outsourcing industry looks to add 1.1 million jobs, with provinces filling more than half of them. The industry strengthens with the marriage of people and technology.
What Are the Possible Drawbacks of Working with BPO Companies in Philippines
If you choose the wrong BPO service provider, outsourcing to the Philippines could hurt your business. In fact, a BCG survey found that offshoring doesn’t solve all company issues, and working with a foreign BPO can be difficult if left in the wrong hands.
Let’s look at the downsides of outsourcing to the Philippines as well as the solutions.
- Unmanageable off-site staff: Delegating business functions to staff in a country across the globe from you may make managing these teams difficult, especially in performance tracking and improvement. Digital communication may cause gaps.
Be sure to train your BPO team, establish a performance-monitoring QA team, and communicate regularly.
- Time zone expectations: Outsourcing to the Philippines means outsourcing to foreign companies. Differences in time zones can pose a challenge.
Orient your BPO team to time zones and schedule check-ins.
- Rigid labor laws: Philippine labor laws apply to BPO partners. Consider minimum wage, holiday pay, 13th-month pay, overtime pay, and other employee benefits. Know that violating these carries heavy penalties.
When you work with a trusted BPO like Remote Employee, the bureaucratic red tape is already taken care of.
Credit: Outsource Accelerator
What Companies Opt for BPO in Philippines?
BPO firms help large US-based corporations succeed, having served US firms of various sizes and industries for over 40 years. Here are the top US companies that outsource to the Philippines:
- Google: Google subcontracts services, app development, software development, and analytical consultants to IT outsourcing companies in the Philippines. The Manila office is responsible for Google’s success in Asia-Pacific.
- Facebook: Facebook only started IT outsourcing services in the Philippines in 2016. It outsourced customer service, information technology, and content moderators. Censors on social media remove violent, offensive, and depressing content. Accenture and Cognizant are two companies that typically provide Facebook with content moderators.
- UnitedHealth Group Incorporated: This health insurance company entrusts its consulting, customer service, project management, IT operations, engineering, and analytics to an IT outsourcing company in the Philippines.
- Wells Fargo: This global financial services firm provides banking, investment, and mortgage services.
It employs a large number of skilled workers in the Philippines as fraud specialists, customer service representatives, payroll consultants and analysts, process engineers, financial accountants, and other positions, reaping the benefits of 24/7 BPO in the Philippines.
- Nike: Nike is able to serve its millions of customers and fans all over the world thanks to offshore teams. Nike in the Philippines produces goods for the corporation, starting with footwear, and has since expanded to include clothing and other equipment.
- Hewlett-Packard: In 2015, HP Inc. and HP Enterprise separated. After splitting, these two companies started outsourcing IT support services to the Philippines, with local IT and customer service personnel providing support.
- IBM: This is a significant global employer, with 70% of its employees contracted. IBM outsources the management of its IT infrastructure and networks to the Philippines, as well as cloud computing, technology consulting, a digital workplace, and other services.
- Amex: With offices in over 40 countries, Amex partly entrusts its customer service, IT support, and collections to IT and accounting BPO in the Philippines.
- Coca-Cola: The company employs approximately 10,000 people across 19 manufacturing sites and 50 sales and distribution centers in the Philippines.
- LinkedIn: LinkedIn has outsourced customer service and other back-office functions to the Philippines for smoother operation.
How To Choose From the Top BPO Companies in the Philippines?
By now, perhaps you’re already considering tech support or accounting outsourcing to the Philippines. But how do you pick the best BPO provider for outsourcing?
Here’s a checklist to guide you in your selection process.
- Check your target BPO partner’s experience with your industry, particularly with the functions you want to outsource. If you require digital or tech help, for example, look for a provider with experience in software support and positive reviews from clients.
- Define your business goals and create a specific work scope. BPOs can provide great insight, but you know your business best. When you define your problem, the solution, and the services you need outsourced, the search is easier and faster. Experienced BPOs can help you build the proper business solution.
- Choose an outsourcing partner wisely. The largest players in the market are easy to pick. But note that several smaller BPO firms will often give you better results. With a little market research, you might be able to find a few small BPO partners that are perfect for your business.
- Sort and cross-reference. List possible partners based on BPO size, accessibility, contacts, etc. A company that’s too small could be inefficient; one that’s too big could be unwieldy. Remove Employee is a mid-range company with 200 to a few thousand employees. It is also accessible, with US- and Philippine-based contacts.
- Consider prices and make the best bargain. Analyze BPO vs. in-house operating costs to estimate the budget. Knowing the BPO players and the services to outsource helps you negotiate the best deal. Communicate your budget and expectations with your target BPO firm. Be cost-effective, but don’t cut corners or sacrifice quality.
- Find a customer-focused company. Every firm must understand consumer behavior to improve the customer journey. Your BPO partner should know how customers act, how they interact with your brand, and how they decide what to buy. They should also be easy to reach and ready to help your customers at any time and in any place.
- Be inspired by tech-savvy BPO companies. Your next BPO partner should have technical skills and the latest technology. Contracting companies tend to overlook this. Outsourcing accounting services to the Philippines, for example, is competitive and ensures the latest tools and systems to help improve their performance.
- Make sure the BPO has strict security policies in place. This is especially important for SaaS and customer data professionals. You need to know how the BPO will collect or share information, store and manage it, keep it safe, and make sure it meets requirements.
- Choose a flexible partner. You and your BPO partner need flexibility. Your BPO partner must understand that you may have changing needs or urgent issues. Their adaptability is key. Be clear in the selection process that you require their attentiveness and help at all times, especially if your time zones are different.
- Protect your data with a non-disclosure agreement (NDA). Data is king in the digital age. So protect yours. Outsourcing requires sharing sensitive data with your partner. So on top of an NDA, make sure your partner has the highest level of security, does periodic security assessments, and uses sophisticated data protection technologies.
As you hunt for the best BPO partner, be sure to compile a request for proposals (RFP) so you can choose the vendor based on the above criteria.
Once you have a BPO partner, take note of the following:
- Joining the team creation. Interview team members briefly. This will teach you about their hard and soft abilities and their performance. This can assist you to decide if that team is right.
- Don’t micromanage. Trust your BPO partner. Remember that your BPO partner’s dedicated teams have the experience and ready-to-go solutions to help you reach your goals. Focus on your strengths and let them do the same.
Credits: Mikhail Nilov
Why Remote Employee Is the Premier Choice for the BPO Industry Philippines
You may be looking to build a business without spending a ton or are looking for trustworthy, trained remote employees. You could be on the hunt for a simple, streamlined outsourcing process.
Establishing your team is just as simple as hiring someone in the United States. We take care of the vetting process for you. You never need to worry about the quality of your team.
We only refer the top 3% of applicants to a given position, and you’ll have plenty of qualified applicants to choose from. Besides, we provide guidance about workplace culture and management. So you are sure your operation is streamlined.
Go Remote and reap the advantages of outsourcing to the Philippines. Get in touch with Remote Employee today.