Filipino Outsourcing – Pros & Cons (Are There Any Alternatives?)

The impact of globalization has made businesses reach more clients globally. You think of a business idea, launch a website, list your product/service, and it has the potential to reach globally.

It isn’t just limited to technology, but has gone out to affect all the industries. And outsourcing stands in the middle of it!

Outsourcing is the process of reducing costs by taking advantage of lower labor wages in the underdeveloped countries. For example, the labor wage to hire a call center agent in the USA is $17.22 an hour, however, you can hire the same agent with a rate that starts from $7 per hour.

While there are many amazing options for the business owners to outsource, I want to focus on Filipino Outsourcing. And in the coming article, I have discussed the Filipino outsourcing market, why business owners prefer to outsource in Filipino and is there a better alternative than outsourcing to Filipinos.

Filipino Outsourcing Market

According to Statista, the outsourcing market is set to produce a revenue of $0.72bn in 2024. The figure shows the amount of money business owners spent while utilizing the outsourcing market in Filipino.

Further, the revenue is expected to grow at the rate of 9.04%, which will make it US$1.1bn to contribute in the Filipino outsourcing by 2029.

Following is the chart that shows how the Filipino outsourcing market is growing over the years:

Source: Statista

The prominent outsourced operations are customer support, data entry, technical support and other redundant services that do not require a lot of technical expertise.

Cool, let’s dive into why businesses choose to outsource in the Philippines.

Why Business Owners Prefer Outsourcing to the Filipinos

After a decade of experience in the outsourcing market, I have gathered the top 5 reasons why business owners choose to outsource in the Filipino market.

1 – Cost Savings

This is a no-brainer! And that’s the central reason why companies choose to outsource. Not only the small-medium business, but companies like Amazon, Apple and Google choose to outsource their redundant tasks like customer support to a country with lesser wages.

A normal agent in the USA will cost you around $18-$25, however, you can find the same agent in the Filipino market for $12 or around. This makes almost a saving of 50%. 

So, if you are spending $100k on your customer support, you can save $50k simply by outsourcing and may expect better responses as well given these agents are available 24/7.

2 – To Avoid Legal Compliances

If you hire a full-time employee in the USA, you have to bear their medical, insurance, benefits, bonuses and the list goes on and on.

You cannot avoid it, given it’s required by the law, and if you don’t provide it, you may face consequences or legal notice from the government.

However, by outsourcing, you don’t have to go through any of these legal compliances. You don’t file taxes for them or provide them any benefits. It’s like simply paying and getting the services. 

And if they don’t meet your requirements, you can fire them at any moment.

3 – Lesser Taxes

There are many laws in the Filipino market that encourage investments from foreign countries, so you are always at the saving end of improving profits with lesser taxes.

Since a lot of countries are subject to changing laws for foreign investment (i.e., China), cooperative government makes your outsourcing strategy sustainable and more efficient! 

4 – Quality of service

Since Fillipinos aren’t really unaware of the foreign culture, they are well-versed in USA culture and can mingle easily with the businesses’ customers.

Moreover, the call centers you outsource to actually hire people with a great level of scrutiny. This ensures that the agent working on your business is technically aware and has an excellent spoken style.

5 – Larger talent pool 

With millions of people at your service, the Filipino market offers you a brilliant pool of talent to choose from. 

You are not restricted to hiring from a specific pool of talent, rather, you have the availability of thousands of candidates who are educated, degree holders and have skills. They can assist you in whatever services you are looking for.

What are the Drawbacks of Outsourcing to Filipino

While Filipinos offer some amazing benefits to outsourcing, there are some drawbacks as well. Here are the top 3 main drawback of outsourcing to Philippines:

1 – Expensive compared to other outsourcing countries

Yes, if the main purpose of outsourcing is to reduce costs, then there are better options available than in the Philippines. 

A normal call center agent costs you around $12/h in the Philippines, however, in Pakistan, you can hire an agent that starts from $7/hr. 

And when you combine it with the yearly cost, this shows a huge difference in saving!

2 – Strict labor laws

While the Philippines offers attractive laws to bring foreign investment, there are strict laws that ask the employer to pay the employee extra. 

For example, according to KDCI law, you’d have to pay an additional 2 months of pay to your employee by the end of a year.

However, that’s not the case with Pakistan, generally the labor laws are supportive in the favor of business owners and you will be at the saving end!

3 – Time zone differences

While the agents tell you that they are available 24/7, the time zone differences sometimes affect their productivity and your business may suffer sometimes due to the lack of availability and productivity.

Pakistan: A Better Alternative to Filipino Outsourcing 

Fortunately, Pakistan covers all of the drawbacks and provides a better space for the business owners to outsource. 

HiredSupport, a company that works on outsourcing, tried multiple locations for the outsourcing, but they found Pakistan the most cooperative space in terms of outsourcing.

In the coming section, I have discussed how much you can save by outsourcing to HiredSupport (Pakistan).

How Much You Can Save by Outsourcing to Pakistan (HiredSupport)

While the labor costs in underdeveloped countries are definitely lower than the USA, UK or Canada, we can make an estimation about how much business owners can save by outsourcing in Pakistan.

To measure, I have taken the following figures:

• Most affordable outsourcing company – HiredSupport (starts from $7/hr).
• Median of full-time employee rates to hire customer support agents in the USA, UK, Canada, and Australia.
• Total costs comparison of hiring agents for 8 hours, and 5 days a week.

With these figures as a measurement, following are the potential savings you can make by outsourcing:

Country	Cost of Hiring In-House	Outsourcing to HiredSupport	You Save	%Cost Save
USA	$100,742 per annum	$14,787 per annum	$85,955	Save 85.32%
UK	$213,840 per annum	$14,787 per annum	$199,053	Save 93.09%
Canada	$31,722 per annum	$14,787 per annum	$16,935	Save 53.39%
Australia	$38,438 per annum	$14,787 per annum	$23,651	Save 61.53%

All of the currencies have been taken into the US. dollars to make a valid comparison.

Best Outsourcing Companies to Reduce your Costs

Cool, now that we have an overview about the outsourcing market, it’s time to list the best outsourcing companies that can save you the money.

My estimation shows that HiredSupport is the most affordable (starts from $7/hr), and has a decade of experience in outsourcing.

Here’s the list to have an overview:

Conclusion

If you are still unaware about outsourcing and choosing the right company, I’d suggest running a free trial with HiredSupport. 

Theory won’t take you far, practicality does! And by working with HiredSupport, you’d be able to set the right expectations, ask the right questions and then be on the right path.

Zero dollars expense, and you set the right direction!