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Cost effective Outsourcing in the Philippines
November 30, 2006


Philippine Labor Costs One-Fifth Lower

Why outsource business processes?  What are the benefits to the economies that outsource them? Leading economic experts agree that the true benefits of outsourcing could eventually be a global upgrading of jobs to the more technologically-advanced. This recent trend is compared to a wave of global change similar to what was experienced in the 1990s. At that time, most manufacturing jobs from first world countries shifted offshore, creating new and higher-paying job opportunities at home.  The current wave in outsourcing is ultimately expected to benefit the outsourcing countries.  A corresponding upgrading of jobs in these outsourcing countries will be created in order to further improve their workforce productivity.

In the context of this inevitable change, companies would have no choice but to adopt some form of outsourcing strategy to reduce operating costs and improve productivity. And as more and more companies realize the benefits of outsourcing, there will also be greater demand for offshore outsourcing resources.

Companies seeking cheaper alternatives for basic services have discovered cost effective outsourcing in the Philippines. For companies, the country's appeal, aside from lower costs, include cultural similarities to the United States and employee loyalty.

Labor costs in the Philippines are one-fifths lower than those in the U.S. and Europe. The average starting basic pay of a Filipino is only $250, excluding night differentials. English proficiency and cost-competitiveness of its workforce, its modern telecommunications infrastructure, and the local culture’s affinity to the West, are critical factors that make the Philippines a leading offshore site. Further, it shows which types of business process services the Philippine-based IT-Enabled Service companies excel in, and which areas provide opportunities for future business development.

The key determinants of country success: University graduates, government-supported corporate campuses, business law supporting intellectual property and general business practices, telecom maturity, critical mass of certified suppliers and personnel, local labor rates for skilled and unskilled people, knowledge that exists within the people. The industry owes its phenomenal growth mainly to lower operating costs as compared to other countries in the Asia-Pacific region. The Filipino's proficiency in English and high level of IT skills give them an edge over other Asian competitors. The Philippines is ranked as the third largest English-speaking nation in the world.

The Philippines has a skilled labor force of 29 million and a literacy rate of 94%. META Group, Inc., a leading provider of information technology research, advisory services, and strategic consulting, ranks the Philippines 14th out of 48 countries in terms of the availability of IT skills locally.

Beyond just revenue growth, cost effective outsourcing in the Philippines has helped companies also manage to maintain their net margins while registering such strong growth — a truly impressive achievement.

The Philippines features ten key information technology sectors - business process outsourcing, writing, graphic designing, media management, programming, quality assurance and data entry, contact center, art, animation. The call center business is the fastest growing industry in the Philippines, growing last year by 90 percent as revenue reached $1.7 billion. More than 100 centers around the country have created a new class of relatively affluent and independent young Filipinos. Growth in the industry has put such skilled employees in high demand, driving up competition and labor costs.

Offshoring, Inc, an American owned and operated staff leasing company headquartered in Atlanta, Georgia and based in the Philippines, provides businesses and employers with a simple, no-hassle solution to offshoring business processes, in response to the influx of demand for outsourced products and/or services.

Offshoring, Inc is the foremost offshore staff leasing company that offers the best professionals in the labor pool, such as advanced degree holders and competently trained writers, graphic designers, programmers, media managers, quality assurance representatives, data entry clerks and contact center agents all who have practical experience in the workforce. The company helps international employers significantly reduce searching, training, and operating costs while maintaining complete control over the process. Offshoring, Inc’s edge among other staff leasing companies is the highly qualified skilled professionals that occupy their seats.

Providing US-based confidentiality and non-compete agreements, Offshoring, Inc values the client’s intellectual property and trade secrets in top priority. The company assures clients that the staff they hire are their exclusive employees until the contract expires. All potential staff are extensively reviewed with background checks and constant stern supervision. Offshoring, Inc dutifully protects their clients’ security. Offshoring, Inc’s value proposition of providing the best people, best processes, and best technology at a lower over-all cost applies to any business who gives importance to quality and efficiency.

For a company thinking of outsourcing offshore, choosing the right offshore site could have a long-term strategic impact on the competitiveness and sustainability of its business. Gaining a better understanding of the benefits of locating cost effective outsourcing in the Philippines will significantly help in that decision making process.

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