There is a hundred and one reasons to outsource which we’ve discussed in other articles, but outsourcing also has its share of detractors. Some say that when you hire a Filipino Virtual Staff, you are stealing jobs from Americans (or other western countries), is that true or false? It’s a little bit of both, which we’ll discuss in this post.
Outsourcing has come of age with the number of businesses choosing to outsource a portion of their processes, increasing year by year. Why has outsourcing become so popular?
While there are many reasons a company may consider outsourcing to the Philippines, here are three of the top choices.
Long Term Strategy
Whether or not you endorse outsourcing, there can be no argument that globalization has become more and more prevalent. Technology has allowed us to do business with customers on the other side of the planet, almost as easily as dealing with someone across town, or in a nearby city.
Outsourcing can undoubtedly be a quick fix, certainly for businesses that deal in seasonal trends, but it’s also becoming a sound business strategy for the long term. Large companies have been outsourcing as far back as the 1980s (albeit different than today), but only in the last decade or so have small businesses looked to hiring a Filipino remote staff as a way to cut costs, expand their services or increase their customer service hours.
There is no question that outsourcing to the Philippines has proved beneficial to a multitude of companies, small, medium and large, but what has it done to local jobs?
FACT: Over the long term, outsourcing has allowed companies to concentrate on strategic innovations, ultimately increasing higher level jobs.
Let’s dissect the industry a bit and make an informed decision about whether or not outsourcing is helping or hindering the local economy. In all cases we’ll be taking a more extended range viewpoint, 3-5 years into the future.
Is Outsourcing Only Useful for Saving Money?
While cost is certainly a consideration, “growth goals” also play an essential role. If a company can save money on less critical (but still important) processes by outsourcing, they can concentrate their time, money and efforts on innovation.
EXAMPLE: A business is presented with a new opportunity, but it will require the hiring of hundreds of customer service personnel. If the company is already operating at full capacity, they may not have the resources to hire a new 100 person in-house team and may have to turn down the opportunity. With outsourcing, they can take advantage of the work knowing that their BPO (Business Process Outsourcing) agency can meet the demand of personnel, infrastructure, floor space, computers, and payroll.
Thus, by outsourcing a portion of their processes, they can take full advantage of the opportunity of creating more jobs for local talent as needed. In this example, growth goals can be taken full advantage of, while core positions can be expanded. And while this may not happen within a day or a week, outsourcing allows a company to focus more closely on long-term plans.
SCENARIO: While this may or may not happen exactly as stated in our example when a company saves money in one area via outsourcing, a portion of those savings may be passed to existing in-house staff as a pay increase.
However, detractors will say, when you hired those outsourcers, you deprived hundreds of locals the opportunity to obtain a job. This point can’t be argued conclusively except to say; it may not have been possible to hire the same number of workers locally based on, higher costs, infrastructure, payroll, human resources, increased office space and training. Additionally, lower skilled positions (in the west( have a relatively high turnover rate causing any personnel manager to think twice about hiring someone who may leave in short order for a job with better pay. That is never a consideration when outsourcing, as all those responsibilities are passed to the BPO Agency, who is responsible for everything related to the worker, including filling the seat should the worker become ill or go on vacation. This allows the company to budget one cost per worker, paid to the BPO, then rest with the knowledge that the job will be accomplished on time, on budget and with stellar quality control.
When you outsource you’ll have:
- More time to interact with clients
- More time and money to implement innovation
- More time to focus on networking
- Cash savings which can be used for expansion or sharing with your existing team.
How does this help locals seeking jobs?
In this case, expand your horizons a bit and think about what a business does for a community. When one business thrives, it brings people to its doors who may in turn visit other businesses, helping the local economy. And when the local economy is healthy, it’s a bit of a ripple down effect with other businesses coming into the area and needing employees. While that may be an oversimplification, in an authentic way, outsourcing helps a business grow, and when it does, that business supports the local economy, ultimately increasing jobs.
Another factor for consideration is taxes. When a company grows and sales increase, the bottom line follows. As this occurs taxes are paid to the regulatory agency and skilled employees, those in higher level positions, may have in turn received pay bumps, allowing them to spend more, stimulating local economy. Outsourcing is a bit like the “Butterfly Effect,” what a company saves by outsourcing can have wide-ranging positive effects in the months and years ahead.
Filipinos Work in Sweatshops
Of course, working in a sweatshop is a myth, though some BPOs provide better facilities than others, the same as some western businesses do. At StaffOutsource.net, we do our best to offer a great work environment. By doing so, we ensure our workers are happy and excited about coming to work. Not only does this ensure a high retention rate (ours is among the highest in the BPO industry), it also ensures your work will be completed with quality, by a team who is proud of their work.
FACT: Philippines BPOs have increased steadily for the last decade, reaching double-digit growth across multiple years. This kind of growth only happens when the work, reputation and spirit of the Filipino people echoes out with a “Job well done.”
The sweatshop mentality likely stems from the fact Filipinos are paid less than their western counterparts. While that is true, it’s not based on slave labor, rather the fact the cost of living is less in the Philippines, and those savings are passed along to businesses seeking to outsource. The truth is, Filipinos are paid well according to the standards of the country. Couple that with the fact our offices are modern and well equipped, and you have a scenario where work is accomplished on time, on budget and with quality assurance, it’s a win/win.
Outsourcing is fast becoming the norm, rather than the exception. As we examined earlier, over the long term outsourcing to the Philippines has a positive effect on:
- The business using the BPO service
- The local economy
- Creation of more business and thus jobs in the local area.
If outsourcing is of interest, we love the opportunity to tell you more, and of course, there is never any obligation to use our services.
Collectively, we have over 30 years of experience in the industry, and we’re happy to pass that knowledge on to you. And here’s our promise, we’ll do everything possible to solve your needs using only the highest quality staff, but if we’re not the right fit, we’ll put you in touch with someone who may be better able to serve your needs. You see, while we want your business, and will do everything possible to get it, even more, we want to spread the gospel of the Philippines and let more and more companies discover the power and efficiency of using a Filipino virtual staff.
Some have called me a bit of Daredevil, but not really, I simply like to stay active and enjoy the people, places, and circumstances I come in contact with every day.Hope you like our site, if you do, please share.Rahn
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