With the rise of remote work and the increasing popularity of the outsourcing industry, there is an arbitrage available to pretty much all business owners in “First-World” countries, where the hourly employee rate is high (>$20 dollars/hour).
The arbitrage is achieved by outsourcing some (or all) of your business operations to countries where the labor force demands a lower hourly rate.
One of the options available to you is the Philippines. There are a number of reasons for this (which we’ll go through below).
This is a how-to guide, with actionable steps and advice for how to outsource to the Philippines. You’ll leave feeling confident about your options, and how to execute the next steps.
Commonly Outsourced Activities
To start, you’ve got to understand what business processes you can outsource to the Philippines.
The workers there have a particular set of skills and circumstances that lend themselves to working on particular tasks. We’re going to discuss some of the most popular in the outsourcing industry.
Lead Generation
One of the most important things that contributes to any business’s success is generating leads. Having a full-time resource that makes your Sales team more effective, or marketing efforts more productive can be an absolute game-changer!
Here are some lead-generation activities you can outsource to the Phillipines:
Research and Identification:
- Identify potential leads from various online platforms such as LinkedIn, industry directories, and social media channels.
- Segment and categorize leads based on industry, company size, job title, and other relevant criteria.
- Add lead information from sources like LinkedIn, prospects’ websites etc. which make your sales team more productive (because they have all the necessary important information on hand).
Data Entry and Database Management:
- Input lead information into CRM systems or spreadsheets.
- Regularly update and maintain the database to ensure accuracy and relevance.
Email Campaigns:
- Draft and send cold outreach emails to potential leads.
- Monitor email open rates, click-through rates, and responses to gauge the effectiveness of campaigns.
- Deliver reports on the success of email campaigns (so future campaigns can be improved).
Follow-ups:
- Engage with leads who have shown interest by responding to emails or filling out forms.
- Schedule calls or meetings for the sales team with potential clients.
Market Analysis:
- Research industry trends, competitor strategies, and market demands to identify new lead generation opportunities.
- Provide insights and recommendations to the marketing and sales teams.
- Content Creation for Lead Magnets:
Design e-books, whitepapers, webinars, or infographics that can be used as valuable lead magnets on your website.
- Social Media Engagement:
Engage in lead generation groups by responding to comments, joining discussions, and participating in relevant groups. Often engagement is what makes online communities thrive.
- Reporting and Analytics:
- Track and analyze the performance of lead generation campaigns.
- Provide regular reports on metrics such as conversion rates, lead sources, and ROI.
Philippines Customer Service Outsourcing
Customer service is a prime candidate for outsourcing to the Philippines.
With the right amount of training, you can teach your outsourced customer service team to handle and resolve queries, so that only the most important requests make it through to your on-shore team.
Philippines customer service outsourcing solutions can handle:
- Customer questions submitted online
- Order & tracking queries
- Billing and payment follow-ups and query handling
- Loyalty and Affiliate program payments
- Multilingual customer service queries
- Ticketing system queries
Bookkeeping & Financial Reporting
An important (and normally expensive) part of running any business is keeping track of your finances. Most businesses need some sort of help in this regard.
Here are some commonly outsourced financial tasks that Filipino workers can help with:
- Accounts Payable and Receivable: They can handle the management of both incoming and outgoing payments, chasing up late payers, and monitoring cash flow.
- Payroll Processing: With a bit of training on local payroll systems, Filipino workers can compute salaries, deductions, and benefits for employees.
- Financial Reporting: Generate monthly, quarterly, and annual financial statements, including balance sheets, income statements, and cash flow statements.
- Bank Reconciliation: By comparing company records with bank statements, any issues or potential theft can be spotted quickly, and resolved.
- Expense Management: Track and categorize business expenses. Follow up with employees about expenses. Collect documentation etc.
- Audit Preparation: Organize and prepare necessary documents and records for internal or external audits, ensuring a smooth audit process.
- Use of Accounting Software: Many Filipino professionals are proficient in popular accounting software like QuickBooks, Xero, and Sage, ensuring efficient and digitalized bookkeeping.
Data Entry
All the basic data entry tasks can be outsourced, where human input is needed:
- Basic Data Entry: Inputting raw data into spreadsheets or databases.
- Database Management: Updating, cleaning, and maintaining databases.
- Data Organising and Formatting: If you have unstructured data that you want to be put into a certain format.
- Data Conversion: Converting data from one format to another, such as PDF to Excel or handwritten documents to digital formats.
- Form Processing: Inputting data from forms, surveys, or questionnaires into a digital format.
- Transcription Services: Transcribing audio or video recordings into text format.
- Web Scraping: Extracting specific data from websites and organizing it in a structured manner.
- Data summary services: Extracting patterns and insights from your data.
Email & Scheduling Management
We wrote a comprehensive on email management and scheduling that mentions that business owners spend way too much time in their email inboxes (up to 30% of their day, sometimes).
That is time lost!
You can easily setup a virtual assistant to work in your email inbox, handle queries seamlessly and only have you deal with the most important incoming items that are important to you.
Generating Reports & Decks
Business owners often spend way too much time creating new slide decks or presentations. The real work should only be in editing, not producing.
You can work with an outsourced Filipino worker who puts together all the content you need for your next presentation or demo, and then you just make the final polishing touches.
Recruiting
Recruiting is a great place to outsource some back office tasks. Here are some that you might want to consider:
- Resume Screening: Sifting through resumes to shortlist only the best candidates for interviews.
- Initial Interviews: Conducting preliminary interviews to gauge a candidate’s suitability before they reach your desk. This will require a higher-calibre person who is confident and can speak fluently.
- Reference Checks: Verifying the authenticity of a candidate’s previous employment and qualifications.
- Job Posting Management: Managing incoming job applications, disqualifying candidates which don’t meet the minimum requirements, and following up with those who need to submit more info.
- Onboarding Assistance: Helping new hires integrate into your company by providing them with the necessary training materials and resources, answering questions, guiding them through any new processes.
The overall theme of all of these tasks is that you should be trying to make your onshore, local workers more effective at their jobs (effective, not efficient!). You can do that by taking all of the mundane tasks that they don’t enjoy doing (or are not good at), off their plates, and making it the responsibility of someone who demands a lower salary.
Hopefully this gives you an idea of some of the tasks that outsourced workers can take off your team’s hands. Now we’re going to briefly get into some of the roles you might want to consider outsourcing.
I won’t go into too much detail here.
Commonly Outsourced Roles
Now that you know what types of work can be outsourced to the Philippines, here are some commonly outsourced roles. A lot of these are an obvious one based on what we’ve talked through above, so I’ll keep it short:
- Virtual Assistants: A VA can handle all of your personal admin tasks. A good one can be an absolute game-changer for any small business owner.
- Customer Support Agents.
- Web Designers & Developers.
- Content Writers.
- Accountants and Bookkeepers.
- Data Entry Clerks.
- Community Engagement Agents.
Benefits of Outsourcing to a Philippines Workforce
Cost Savings
The obvious one: A huge operational cost saving over the equivalent on-shore employee.
Let’s take the USA as an example.
The cost of hiring a full-time Bookkeeper in the US is around $22.00 per Talent.com.
In the Philippines, a full-time Bookkeeper is going to set you back around ₱153.00 per hour (from SalaryExpert.com). That equates to around $2.69 USD/hour.
Even if you choose to double that salary to $5/hour, hiring in the Philippines is more than a 400% cost-saving!
If you move even a few operations offshore, that can lead to a significant reduction in operating costs for your business.
Great English
Something most people don’t know is that the Phillipines is actually the third largest English-speaking nation in the world (with over 95% of the population being English speakers). With an extremely high literacy rate, there is almost no language barrier!
That is what makes it such an attractive hiring destination for countries like the US, United Kingdom, Australia and Canada.
Not only does it make client communication possible, but internal communication as well (which is a huge part of operating a successful remote work operation).
Adding to this, there’s a known correlation between the frequency of communication (with customers) and the perceived value that those customers derive from your service. The fact that you can stay in constant contact with your customers using your Filipino workforce will lead to a huge increase in customer satisfaction.
Flexible to Work Hours
The Philippines operates on GMT +8 time zone. Although that doesn’t really line up with any US work hours, Filipino workers are often happy to adjust their schedules to work on US-hours (or European, if your business is there).
There’s also the added bonus that if you need 24/7 customer support, you can have a team operating around the clock if you need to!
Work Ethic
Filipinos are known for their strong work ethic. Because there is an attraction for earning a USD-based salary, the competition drives a competitive work environment where workers are always striving to deliver their best.
There’s also a rich educational background and specialized experience in various fields, so you’re getting top-tier talent.
Considerations When Outsourcing Operations to the Philippines
The benefits are clear. Outsourcing a business process or two can be a needle-mover for your bottom line.
It does, however, come with its own unique challenges. In my experience hiring outsourced teams from around the world (not just the Philippines), here are some of the most important considerations to keep in mind:
Culture & Language Differences
Without visiting the Philippines, it’s unlikely that you or your team can really understand the culture that your outsourced contractors or employees experience.
On top of that, working for foreign companies can be a daunting experience if they’ve never done it before.
With that in mind, I’ve found the best plan to bridge the cultural divide is to prep your onshore team accordingly and make sure they are aware that their coworkers abroad are just that, co-workers. They’re no less or more important and should be treated with the same respect and decorum that the onshore team is.
Time Zone Differences
As mentioned already, the time difference is something you’re going to have to cater for. There are two ways to do that:
- Ask your Philippines-based team to work US-based (or local) hours, or
- Adopt an asynchronous communication method.
Each of these works, and your solution might be a mixture of the two. Which to choose really depends on your business, and whether you need immediate communication to happen (or whether a couple hours between responses is okay).
That’s a great segway into Communication.
Communication
One of the most important aspects of running a distributed team successfully is seamless communication. You have to make sure everyone is rowing in the same direction, or things can get chaotic pretty quickly.
The two important considerations here are:
- Tools for communication, and
- Method and paths of seamless communication.
It must be super clear to your team who they should be communicating with every day, and what channels they should be communicating through, and that constant communication is a pre-requisite for being successful at their job. All too often employees will think its okay to just do the work, and they don’t end up communicating enough about what they’re actually working on!
Make sure the left-hand knows what the right hand is doing!
Legal and Contractual Aspects
One of the most important aspects to get right is establishing the mode of engagement with your Phillipines-based workers.
Basically: Are they contractors, or are they employees?
If you’re going the Contractor route, you will need to make sure you’ve got all your bases covered locally (and with the Philippine Government).
If you’re going the Employee route, you
Philippine government
will need to setup an employer of record in the Phillipines, and use that as the vehicle to hire your off-shore team.
RecruitGo provides a super easy solution for this, managing everything you need to worry about from a compliance perspective.
Training & Onboarding
One of the most critical aspects of getting your local and off-shore team synced is proper training and onboarding.
Here a three tips for doing this successfully:
- Create a Company Wiki. This is where all your business processes, tools, systems, rules, principles and general company information live. New employees can use it to get up to speed on the proper “Ways of Work”. The bigger your company, the more important this becomes!
- Have teams share a “Working with Me” document among their close colleagues. This helps distributed employees understand how their colleagues like to work, communicate, and how best to interact with them. It’s a game-changer for the synergy of a distributed team!
- Upskill your offshore team. If there are certain aspects of your offshore outsourcing that you find frustrating or you wish were better, send them on a course or training to improve. Filipino people are generally very keen learners and will jump at the opportunity to be upskilled.
Payment and Compensation
Depending on whether you go the employee or contractor route, you’ll want to make considerations for how you pay your offshore team.
If you use an employer-of-record solution like RecruitGo, that will be a breeze.
If you’re going the contractor route, make sure you have a way to send money abroad efficiently every two weeks.
One tip would be to treat your offshore outsourcing team like you would any other (in terms of compensation). Design a compensation structure that is aligned to your company’s goals.
Employees go where compensation packages lead them!
Data Security
Make sure you have the proper tools in place to make sure that sensitive information is being shared among your team properly.
How to Outsource to the Philippines: The Step-by-Step Summary
So, we’ve covered all the important points and considerations that you need to be aware of when considering how to outsource to Philippines workers.
Here’s a step-by-step process for how to outsource to Philippines:
- Design your team: Before diving in, take a moment to understand what tasks or roles you want to outsource. Where can an outsourced worker create the highest amount of leverage? Where does your business need the most amount of work at the moment? What parts of your team are currently under-resourced? Where is there too much “work about work” happening?
- Budgeting: Determine how much you’re willing to spend. Remember, outsourcing can be cost-effective, but it’s essential to set a clear budget so you know
- Choose a Reliable Platform: This is where Recruit Go comes in. Without one, you’re going to run into a lot of unexpected regulatory recruiting hurdles.
- Source Your Candidates: If you use Recruit Go, this is done for you.
- Interview and Select: If you use Recruit Go, this is done for you.
- Onboarding & Integration: Once you’ve selected your new team member, onboard them. Check the section on Onboarding & Training above for some handy tips!
- Regular Check-ins: Communication is key. Have regular check-ins to ensure everything’s on track with both your onshore and offshore teams. Make sure the integration between the two is going well.
- Celebrate the Wins: As business processes get improved, and the positive results start to show, take a moment to celebrate. It’s a journey, after all!
Common Questions about Outsourcing to the Phillipines
How much does it cost to outsource to the Philippines?
The most common question, how much does it cost to outsource to the Phillipines.
Workers in the Phillippines will work from as low as $2 USD/hour. As always with hiring, though, to get better candidates it is recommended that you pay more for a higher-skilled worker.
As an example, a highly-skilled recruiter who is as good (if not better) as any US-based recruitment worker will fetch around $ 28,800 USD annually, or around $13.85 USD hourly.
The age-old saying holds “You get what you pay for”.
One of the common statements or disagreements heard to this is “that’s an inhumane wage to pay someone, how can it be so low”. The truth is, the relative cost of living in the Phillippines is very low, and as a result workers who earn these wages have an extremely good life.
According to Statista, an average annual salary of between $9,600 and $14,500 allows a very comfortable standard of living. The equivalent amount required in the US would be between $58,000 and $99,000.
On top of that, the Philippine government passed law that encouraged foreign investment into their country for with the specific purpose of encouraging business process outsourcing.
What can you outsource to the Philippines?
The list is long, but in summary, any role that does not require a United-States-based person’s voice or presence in the US can be outsourced to the Phillippines.
The most commonly outsourced roles to the Phillipines are:
- Virtual assistants
- Data entry clerks
- Executive assistants
- Customer service representatives
- Content writers
- Bookkeepers & Accountants
What do foreigners outsource to the Phillipines?
Any administrative tasks that don’t need to be completed by a US-based employee.
Which countries outsource to the Phillippines?
The countries that do the most outsourcing are those with significant economies, and high minimum hourly employee rates.
The countries that outsource the most work are:
- United States
- United Kingdom
- Canada
- Australia
- Singapore
What other countries are popular outsourcing destinations?
Each country has a skill range that they seem to be better at. They also have differnt pro’s and con’s in terms of cost-saving, language barriers and time-zones.
We’ve found success hiring from these outsourcing destinations:
- India
- Pakistan
- Indonesia
- Vietnam
- Columbia
- Argentina
