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Friday, 12 February 2021

Business Process Outsourcing (BPO) to the Philippines

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Amelie Hall
Amelie Hall
Amelie Hall is a reporter covering business and entrepreneurial topics. Originally from the US, Alelie is a local journalist based in Melbourne. She has a master’s degree from the University of California at Berkeley Graduate School of Journalism, and she studied French and Latin American literature at the University of California at Santa Cruz.

From virtually nothing at the start of the century, the Business Process Outsourcing (BPO) industry in the Philippines has gone through incredible growth. Fueled by significant investment from Western countries, and particularly American businesses, it now generates 30 billion (AUD) a year, contributing 7.5% of the country’s GDP and employing over a million Filipinos.

“This enormous growth is not down to chance. While the Philippines has more than its fair share of factors that help make it a leading destination for BPO services, the initial driver came from government policy that was intended to encourage investment and has subsequently helped develop the nation’s BPO industry. The country offers a full range of outsourcing services, from traditional call centre and back-office services to business analytics, software development, and even animation,” says Ralf Ellspermann, CEO of PITON-Global, a leading call centre in the Philippines.

But what has made the Philippines such an attractive destination for giants like Google, Amazon, and Facebook, along with over 10,000 SMEs?

Cost

Labour costs in the Philippines are around 70% lower than in Australia. This represents a significant cost saving but is enhanced further by the economies you would expect from using any specialist service provider. When purchasing from a BPO in the Philippines, the combination of savings on labour, HR, legal, and infrastructure mean you can expect to save in the region of 50-60% against in-house provision while maintaining or even enhancing your service levels.

A skilled and educated workforce

The size and success of the BPO industry in the Philippines means that there is a significant skilled and experienced workforce available and ready. This applies to all levels, so existing providers can scale up rapidly if needed.

The Philippines is a young nation; the age profile is skewed heavily towards younger age groups, particularly the 20-30 range. It also has a high proportion of adults educated to college level, creating a ready pool of staff who can quickly take on and develop new roles. This has been further enhanced by government programs put in place to help Filipinos returning from working abroad to work in the BPO sector.

Excellent English skills

The Philippines is one of the world’s largest English-speaking nations. There are nearly five times as many English-speaking people in the Philippines as there are in Australia!

The country’s historic links with the US, along with the high level of education, mean that Filipinos have a high level of English language proficiency. While offshore call centres are often associated with heavily accented agents, this is not the case with BPOs in the Philippines. Instead, the nation’s close cultural affinity with countries means that agents tend to have little or no accent and a good grasp of the regional phrases that would catch out call centre workers in other nations.

World-leading standards

The Philippines has established itself as a world leader by offering exceptionally high-quality services. The size of the BPO market in the Philippines has meant that leading BPO companies have been able to make significant investments in their infrastructure and workforce.

Many BPO companies in the Philippines work from custom-built facilities offering the most advanced technologies and cutting-edge security. They also recognise the value of their workers by investing in their training and development, so they can offer high-quality services to their clients.

The government also continues to support the BPO industry with legislation often matching that set in Western countries. This means that services that have to comply with regulatory standards can be confident that BPOs in the Philippines are already used to meeting those standards.

A positive outlook

The BPO industry in the Philippines has been affected by the coronavirus pandemic. The nature of their work isn’t often compatible with the home working that many other industries have adopted, and the need for physical distancing has reduced the capacity of their facilities.

The need for outsourcing remains and is possibly stronger now that the options of in-person customer service are reduced. The Philippines’ BPO industry has grown exponentially, and while that growth might have slowed during the pandemic, it will still be there, ready to provide high-quality services as the world recovers from COVID-19.

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