Running a startup or small to medium-size enterprise (SME) can be challenging, even in the best of times. But when the economic climate gets tough, smart companies need to adopt intelligent, creative strategies that will help them not just survive but thrive.
“Reducing costs should be at the heart of every business’ strategy to get through economic downturns. Particular focus should be placed on the financial pain points that can drain cash daily. To that end, companies need to cut unnecessary spending, protect cash flow, reduce labor costs, and make clever use of cash on hand,” says Ralf Ellspermann, CEO of PITON-Global, an award-winning call center outsourcing provider in the Philippines.
These days, US companies successfully achieve these goals by outsourcing call center requirements to the Philippines. Making this move offers them an economic lifeline by cutting costs, improving efficiency, reducing risk, and letting the management focus on increasing revenues. In short, outsourcing to the Philippines offers startups and SMEs a solid return on investment.
Contact center outsourcing to the Philippines is not a passing phase. The country’s business processing outsourcing (BPO) industry has experienced steady growth for the past two decades. The Philippines is now the world’s largest and leading contact center outsourcing destination.
In fact, 2021 was a record-breaking year for the country’s call center sector. According to the statistics, revenue rose to US$26 billion in 2021. The industry added 120,000 new jobs, ending 2021 with 1.4 million workers, a 9% increase from 2020. This substantial growth shows no sign of abating, as experts predict that BPO to the Philippines will generate more than US$29 billion by the end of 2022.
The reasons for this explosive growth are many. Lower labor costs, a highly skilled and educated workforce, strong English language proficiency, and reduced capital and operating expenses are enticing benefits for US companies looking to save money. Here are five of the most effective cost-cutting benefits that can help SMEs survive a tough economy.
Saving on labor costs is perhaps the most significant reason US companies outsource to the Philippine BPO industry. “Salaries are more than half that in the States, with Philippine call center agents earning US$4 to $6 an hour instead of the US$12 to $15 that American workers make. Companies can save substantially on labor costs in the long run by partnering with contact centers in the Philippines,” says Ellspermann.
Business owners who outsource to the Philippines can save big on secondary “pain point” costs like leased office space, legal and HR costs, office equipment, taxes, and overheads like internet and electricity. Additionally, they get access to the latest software and technology, which spares them the cost of buying and upgrading their own.
When the economy gets tight, and people spend less, SMEs must amp up their customer service if they want to retain their existing client base. Companies that outsource customer support services to the Philippines aren’t bound by US time zone limitations, so their customers get the 24/7 support they want and need. Outsourcing to the Philippines can also help generate revenue by improving metrics such as first-call resolution, average handle time, and customer satisfaction.
Call center outsourcing to the Philippines cuts the costs of acquiring skilled employees. Companies do not need to spend big on hiring and training staff, as twenty years of BPO success gives the Philippines a huge workforce of young, highly trained, and English language-proficient workers. Plus, the Great Resignation has not hit the Philippines as hard as the US, so companies don’t have to worry about constant staff turnover.
Given that the costs of contact center outsourcing to the Philippines can be 40–50% lower than in the US, migrating those services to the Philippines makes good economic sense for revenue-starved startups and SMEs. “The cost-cutting benefits highlighted here can not only help small businesses weather the economic storms but also provide an affordable and proven way to set themselves up for long-term success. There’s no doubt that call center outsourcing to the Philippines is here to stay,” concludes Ellspermann.