(Photo : Outsourcing to the Philippines is the New Cheat Code for Savvy SMEs)

For small and large businesses looking for a competitive edge in a global marketplace, every advantage is helpful. Outsourcing call center and back-office processes to the Philippines is a great choice for smart SMEs for many reasons. The most obvious is the significant cost savings of up to 50% on labor for premium services. There is also the fact that the Philippines has a highly skilled workforce, with great English proficiency. Quality technology, training, processes, and infrastructure as well as a supportive Philippine government is another factor. Still, another benefit is the wide range of business processes that can be handed off to a BPO vendor in the Philippines.

The BPO industry in the Philippines is robust despite global economic headwinds. The sector grew by 1.4% last year, generating over US$26 billion in revenue, and now stands at 1.2 million individuals in the workforce, accounting for 1.8 percent growth in 2020. That growth is not expected to slow either, with industry projections of up to US$29 billion in revenue by 2022.

"Astute entrepreneurs and enterprise executives understand that cost containment is directly proportional to profitability. To that end, outsourcing business processes to the Philippines delivers. A premium BPO in the Philippines delivers labor at a rate of US$12-14 per hour on average, which is 50% less than the $24-28 per hour average a similar provider in the US would charge," says Ralf Ellspermann, CEO of PITON-Global, an award-winning outsourcing provider in the Philippines.

And cost savings is not the only benefit; the Philippines has expanded from voice-based services such as customer service to more advanced offerings and higher value-added activities such as specialized fields like customer relationship management, R&D, and IT Services. Because these offshore BPO companies can take on sophisticated tasks, they're now able to compete with home-grown industries.

A well-educated, highly skilled, and English proficient workforce is another reason the Philippines is an attractive destination for offshore outsourcing of business processes. English proficiency is one of the most important tools in today's global business environment, and 97% of the Philippine population is bilingual. Further, more than forty higher educational institutions offer world-class degree programs in business and engineering among other degree programs, all of which lead to a high-quality workforce.

Government support has also been invaluable to the industry and has created many initiatives, such as the Board Resolution No. 10 Series of 2013: Offshore Call Center (OCC) Board Resolution, which provides guidelines for the growth of offshore business process outsourcing in the country, and continuing education for workforce development. BPO companies have been responsible for the creation of over 1.2 million jobs in the Philippines and have paid millions in tax dollars annually and reinvested at least 30% of their revenue back into the local economy. In return, they receive several incentives from government authorities at both a local and national level.

Widespread reinvestment into cutting-edge technology, processes, training, and infrastructure is another reason smart executives look to offshore to the Philippines for their business processes. Offshore BPOs in the Philippines have steadily increased capital expenditures, with a focus on upgrading and improving their data center facilities. These vendors also invest heavily in the training and development of talent, resulting in a workforce that is better equipped for more sophisticated tasks. One large BPO vendor reported a 30% improvement in their workforce productivity in the last two years, which was driven by these exact initiatives.

"Outsourcing to the Philippines can be a game-changer for SMEs who are looking to increase their bottom line. The country has built the largest business process outsourcing sector of all developing countries. By delivering cost-competitive labor, a highly skilled workforce, widespread investments into technology and infrastructure, and local government support, savvy SMEs know that migrating their business processes to the Philippines is the new 'cheat code' for organizations that cannot afford to lose a single customer and want to compete globally while keeping expenses low," says Ellspermann.