You may not be familiar with the name ‘Nick Huber’ but it’s fair to say that when the self-anointed ‘serial entrepreneur’ has something to say, a lot of people tend to hear him. The American has a real estate portfolio worth more than $150 million, owns stakes in 11 companies1, has two podcasts, shares a weekly email with more than 100,000 people and his tweets “routinely garner 30-40 million impressions each month2”.
So when Huber recently used a post on X singing the praises of the Philippines outsourcing sector, there would have been a lot of American business owners, executives and managers who took notice.
“There are people in the Philippines ... who can do your job better than you can for $5 an hour,” he wrote. “And work 60 hours a week, no complaints, and with AI, their English is better than yours.3”
Huber went on to reveal that 80% of his workforce is outsourced, describing it as his business “cheat code” because his offshore teams do not only come at a significantly lower cost but can perform their tasks just as effectively, if not more so, than their American counterparts. As he suggests, onshore businesses can achieve three times the productivity for only 20% of the cost.
It is also interesting that Huber chose to shine the spotlight on the Philippines. While many nations promote themselves as outsourcing destinations, there is no denying the Asian archipelago sets the standard when it comes to offshoring. The industry is worth $37 billion to the country, represents 9% of GDP and is responsible for employing about 1.7 million people.4
The Philippines has earned a reputation for being a leader in industry trends. While at MicroSourcing we might not fully agree with Huber’s figures, we share the sentiment that the Philippines is a top outsourcing destination for good reasons. This article will showcase five ways the Philippines is embracing change offshore to benefit their onshore clients.
What is the current situation of the outsourcing industry in the Philippines?
The Philippines outsourcing industry, particularly in the Business Process Outsourcing (BPO) sector, is currently experiencing significant growth, with a rapidly expanding market value, high demand from global clients and a large workforce contributing significantly to the country's economy. The industry is considered a global leader in customer experience outsourcing, with a focus on increasing mid-skill and high-skill roles beyond traditional call center services.
Most outsourced business processes in the Philippines
Source: Philippine Outsourcing Statistics You Should Know in 2024
Why is the Philippines one of the best choices for outsourcing?
The Philippines is considered a prime choice for outsourcing due to its large pool of highly skilled, English-proficient workers, a relatively low cost of living, strong government support for the industry and cultural compatibility with Western markets, allowing companies to achieve significant cost savings while maintaining quality service.
Why are businesses expanding their outsourcing operations in the Philippines?
There is no shortage of destinations for businesses looking for offshore support but the Philippines has established itself as a prime choice for multiple reasons. On the back of huge government investment, it is one of the most mature markets in the world for outsourcing services and the largest for contact center support. This means there is an array of providers that can provide labor cost savings of up to 70% while increasing productivity, improving efficiencies and driving business growth.
Outsourcing in the Philippines – by the numbers
- Seven of the top 10 countries on the Global Services Location Index are in the Asia-Pacific region – the Philippines, India, China, Malaysia, Indonesia, Vietnam and Thailand5.
- More than 84% of outsourcing deals come from the U.S.6
- The Philippines outsourcing industry recently hired an additional 121,000 full-time employees in one year.7
- Manila is home to 75% of outsourcing activity in the Philippines8.
- The Philippines is ranked second in Asia and 22nd globally on the English Proficiency Index9.
Five trends set to impact outsourcing in the Philippines
With the Philippines renowned for staying ahead of the outsourcing curve, these are the trends to watch this year.
- The rise of AI and automation: the AI revolution is impacting all industries but there are significant gains to be made in the outsourcing world. By automating highly repetitive tasks, technology is allowing Filipino providers to create an environment where they not only deliver huge productivity and efficiency gains for onshore clients but have more time to invest in offering creative and strategic solutions. AI and automation are not just about streamlining activities and delivering faster results but an opportunity for outsourcing providers to transform their business models.
- Upskilling talent: the Philippines outsourcing sector is blessed to have a huge pool of talent to recruit from but the increasing need for highly skilled and creative minds will see a rising investment in the people they already have on their books. Ongoing training and upskilling will become more important than ever in a world where technology is evolving faster than ever and onshore clients are wanting to link with providers that can provide an increasing suite of services.
- Hybrid and remote work: the uncertainty that swept the globe during the COVID-19 era may feel like a distant memory but the workplace revolution it inspired is very much alive. The pandemic accelerated the adoption of remote and hybrid work options in the outsourcing industry and the Philippines is committed to maintaining the momentum. Look for governments and providers to invest heavily in technology and infrastructure that deliver faster internet speeds and enhanced connectivity to create an outsourcing environment that allows individuals and teams to perform for their onshore clients wherever they are.
- Corporate Social Responsibility (CSR): the need for businesses to balance their pursuit of profit with positively contributing to society is rising across the globe but is particularly important in a nation such as the Philippines. Filipino culture prizes social relationships and collective wellbeing, with the term ‘bayanihan’ capturing that sense of community unity. As one of the country’s leading sectors, there is an expectation that outsourcing has to lead the way and that is why clients should expect to encounter an increasing focus on CSR and social issues from providers wanting to improve their communities.
- Geographic spread of hubs: many onshore executives think of Manila when they think of outsourcing in the Philippines but that may not be the case for much longer. The IT & Business Process Association of the Philippines (IBPAP) declared in its Industry Roadmap 2028 that the industry expects to create up to 1.1 million direct jobs in six years and wants 54% of them to be in the countryside10. The pandemic saw 30% of the BPO workforce relocate to the countryside and that momentum rolls on, with MicroSourcing having opened sites in Cebu and employing hundreds of full-time workers in the provinces. Watch for that trend to continue.
Conclusion
These are exciting times for outsourcing in the Philippines and equally so for the onshore businesses that utilize them. From AI and hybrid work to the societal benefits of CSR, the industry is committed to meeting the challenges of the modern world. Crucially, outsourcing providers offer clients a sense of security and reassurance often found lacking in freelancers, which are not bound by the same rules and regulations of such an established sector.
Customer experience can be a costly business but there is a resourcing strategy that has been proven to make a huge difference. Discover the benefits of partnering with offshore providers that specialize in 24/7 customer support.
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