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With the COVID-19 outbreak grinding industries and entire economies to a halt, it is now more important than ever that business owners explore business continuity and cost cutting opportunities. At the height of the last global recession back in 2008 to 2009, companies looked to business process outsourcing to counter falling revenues due to the lower operational and labor costs needed to operate an outsourcing facility.
The Philippines in particular is the ideal outsourcing location. The government has approved for BPOs to continue operations alongside other essential services, the Filipino labor force has the ability to continue working from alternative setups, and there is a continuous flow of skilled graduates that promises to grow alongside the demand for outsourced labor post COVID-19.
The Philippine government prioritizes keeping BPOs functional
BPOs are said to have made up approximately 12-15% of the GDP of the Philippines back in 2019. These outsourcing facilities are regarded as a vital source of employment for the country’s English-speaking workforce. The Philippine government recognizes how much the BPO sector impacts the wider economy. As a result, they allowed BPOs to continue operations as exemptions from the Enhanced Community Quarantine (ECQ) implemented when infection rates started escalating in Luzon, where the nation’s capital, Manila, is located.
When the ECQ took effect, BPOs in the Philippines were allowed to operate assuming they used a skeletal workforce, provided temporary accommodation to the employees or shuttle services for those that lived nearby, and maintained social distancing across their office. They also had the option to have employees work from home or other alternative accommodations.
Should the same trend from the last global recession repeat, we can expect even further growth in the Philippine BPO sector starting in the first and second quarter of next year as more and more services are outsourced and offshored for flexibility and cost cutting purposes. This would likely lead to BPOs having an even larger impact on the wider Philippine economy and would secure its standing as a high impact and high priority industry.
Filipinos easily adapt to alternative work setups
Another main drawing point of outsourcing to the Philippines is the pagmamalasakit culture or being able to empathize with the people you work with or people you serve. This means that the average Filipino is willing to go above and beyond the expected level of service and care when it comes to working with other people, even people of different cultures. This also means that Filipinos offer assistance to their co-workers out of genuine concern of their well-being and will not leave their work unfinished, lest it might cause a problem for others.
This dedicated work ethic extends to times of crisis as well. In the time of ECQ, most BPO employees have opted to follow a work from home setup while others who might not have the right facilities are instead being housed in hotels and other alternative facilities provided by the company. Though some employees opted to quarantine themselves in their offices instead provided that the office has the proper facilities to house them.
James Brennan, the founder and president of Tritontek, a steel detailing and web development company in Cebu that services international clients, has said that since operational costs to run a facility in the Philippines is so low compared to their parent company in the US, it is instead important to invest resources in compensating employees well and assuring that your office has business continuity capabilities, especially for times when onshore companies are unable to operate. This assures that you will have a dedicated team capable of continuing with business operations at any time and in any event.
The Filipino labor force continues to grow in size and skill
A key point of why outsourcing to the Philippines is so ideal is the high level of trainable college graduates available for employment every year and their relatively neutral speaking accents, making them ideal candidates for quickly learning new tasks and for communicating with clients of any country. There is growing concern though that these outsourced tasks will soon be replaced by artificial intelligence software that may also render the outsourced call center services that make up the majority of the customer contact operations in the country obsolete.
In response to this, the labor force is adjusting to cater to more high value outsourced jobs that have been seeing an increase in demand even before the outbreak, most notably in the IT and health care services industry. Year by year, there is a significant growth in the number of skilled workers catering to the labor needs of these industries, closing the game between employee supply and demand.
Since the Philippine labor force is highly reactive to the labor requirements of the BPO sector, we can expect the number of skilled workers to continue growing post COVID-19 for industries that will move to outsource the most for business health and recovery.
When should I start looking into outsourcing?
It would be best to start right now in order to strategically position yourself as early as possible. Contact us for a free consultation and we can work with you on the ground and get you in touch with the right people to iron out your outsourcing strategy. If your business is greatly affected by the outbreak, then outsourcing or offshoring to the Philippines is a highly favourable move. This is a complex but worthwhile endeavor, and with EnterPH’s assistance, you can explore cost cutting and business continuity possibilities much sooner rather than later.
Rocky Chan is a lawyer and business consultant who excels in corporate formation, immigration procedures, and client relations. In the last 7 years, he honed his craft in the field of foreign investment consultancy.
