Outsourcing Philippines: the pros and cons

Published January 10, 2022, 12:17 PM

by MB Business

Business process outsourcing to the Philippines has been a strategic initiative of some of the leading multinational organizations in the world for over 20 years. The country is the number two BPO provider in the world and both the leading and largest provider of voice-related contact center services.

“As with anything, however, there are some drawbacks, but when examined closely, most perceived ‘cons’ related to outsourcing to the Philippines are easily remedied by the many ‘pros’,” says Ralf Ellspermann, CEO of PITON-Global, a leading mid-sized contact center and back-office outsourcing provider in the Philippines.

One of the greatest advantages to offshore outsourcing to the Philippines, particularly call center and contact center services, is having access to staff with excellent English skills. With over 94-percent English proficiency, outsourcing to the Philippines allows global companies the opportunity to leverage Filipino labor with better English skills than workers in other Asian countries, such as China and India.

The Philippines also has access to a large pool of highly skilled college graduates trained specifically for BPO services. Unlike other countries that have labor shortages, the country’s population is highly literate and educated, with more than 75-percent of its citizens earning a high school diploma or equivalent degree.

Outsourcing to the Philippines also provides companies with the ability to scale support programs quickly. Quick program ramp-up times are a benefit of working with leading BPOs that utilize best-in-class technology and infrastructure along with an experienced workforce. These providers have extensive experience in onboarding and training, as well as having the flexibility to scale up as a client’s business initiatives dictate.

Outsourcing providers and their employees in the Philippines have a close cultural affinity to the US markets they serve. This makes them ideal partners for companies that require a partner with a deep understanding of what makes for good customer service and how to deliver it consistently. Additionally, the country’s history as a former US colony has resulted in deep integration of Western cultures and customs. This gives outsourcing companies in the Philippines a tremendous advantage in working with multinational customers whose primary language is English.

“A significant benefit of outsourcing to the Philippines is the substantial cost benefits. Leveraging Filipino labor can save 40- to 50-percent compared to premium onshore programs,” says Ellspermann.

Of course, there can be potential drawbacks to offshore outsourcing. A primary one involves concerns about quality. This can be an issue if outsourcing decisions are made solely on price alone. Low-cost outsourcing vendors simply can’t afford to provide the same quality of service as premium BPOs in the Philippines can. There is a significant drop-off in terms of agent experience and skill, as well as the quality of technology, infrastructure, and management with low-cost providers. This concern is easily alleviated, however, by working with premium BPO vendors, as these companies reinvest capital into the highest quality agents, technology, infrastructure, and management.

There is a notion that time zone differential can be a challenge when outsourcing overseas. This really is more of a perceived issue, though, since working hours in the Philippines can be adjusted to meet client requirements. It’s quite common for premium BPOs in the Philippines to provide multiple shifts, so that service availability runs 24/7, without any gaps.

Lack of control is another perceived problem in implementing an outsourcing program. However, when working with premium BPO providers in the Philippines, clients can easily monitor agent performance and metrics. Premium vendors provide access to real-time dashboards that deliver KPIs on all service levels, so this concern is easily managed with tools and processes.

Some decision-makers may have concerns about potential communication issues, but this too is a function of the outsourcing provider. Experienced vendors in the Philippines have a strong understanding of what makes for good customer service and how to deliver it consistently. They’re also well-versed in what US-based client expectations are, so utilizing a premium provider helps manage or avoid communication issues that would otherwise arise by using a low-cost alternative.

“Outsourcing can certainly be problematic if companies partner with low-cost providers instead of premium vendors. With the right offshore outsourcing strategy and planning, however, most, if not all, of the cons can be avoided. Offshore outsourcing to the Philippines works and can deliver great, long-term dividends, but the approach has to be right,” explains Ellspermann.