Outsourcing and Offshoring to the Philippines


Offshoring experts:  DiversifyISS are experts in assisting businesses establish their own offshore teams (also commonly referred to as outsourced staff, offshore outsourced staff, remote staff or BPO) in the Philippines. Learn More >

Benefits to business: The benefits of offshoring are many and include promoting growth without incurring massive overheads, operating 24/7/365 as well as achieving  increased value for your staffing dollar spend. Learn More >

Industry specialisation: DiversifyISS specialises in assisting businesses in the professional services and retail sectors with offshore staffing implementation, including strategy and planning.

Why the Philippines?: With 94% English literacy, 400,000 graduates each year and an average age of just 22 the reasons for choosing the Philippines as your offshoring destination are many. Learn More >

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Are offshore and outsourced Filipino employee salaries as cheap as I hear?

Friday, Oct 02.

Far too often I am approached by clients telling me that they have heard they can get a Filipino staff member who has the skills and experience they want for AUD$8,000 per year.


Are offshore and outsourced Filipino employee salaries as cheap as I hear?

Friday, Oct 02.

Far too often I am approached by clients telling me that they have heard they can get a Filipino staff member who has the skills and experience they want for AUD$8,000 per year.

In most cases these clients have been told by a ‘friend’ or have seen such statements on one of the many websites that offer cheap offshoring or outsourcing solutions. So how much weight can you place onto such statements or promises? Is obtaining a full time offshore resource that knows your business realistically going to cost AUD$8,000 a year? In my opinion, it is a resounding “NO”. Such statements and promises are the bane of the industry. They negatively impact on the industry and warp potential businesses mindsets into a ‘cheapest solution possible’ outlook. Businesses focus on shopping around to see if they can source the cheapest deal possible as opposed to investing time and effort into understanding their goals and objectives and partnering with an offshore provider that fits and sometimes this isn’t the cheapest solution upfront.

It is important to look at offshoring and outsourcing as a long term solution. Focusing on achieving short term cost benefits as the major goal in implementing an offshored or outsourced solution will only result in failure.

Leading into the crux of this article it is important to note that the Philippines job market is no different to how the local job market operates in your locale. Cost wise, yes a Filipino resource is cheaper to use but sourcing high quality candidates is competitive and can be difficult particularly if a business goes in with an ‘as cheap as possible’ mentality.  

Manila is the capital of the Philippines and home to 14 million people. Similar to most capital cities, it is also the centre of the available potential employee talent pool.  Minimum wage in Manila for a white collar job is about $500 AUD per month excluding government benefits.  Include benefits and this will take you to about $600 per month.  So the minimum cost of an offshore resource (with no allowance for things like rent, electricity, internet connection etc.) is about $7,200 per year.  Taking into consideration the above, what is the likelihood that you will be able to find a suitable offshore resource  with the specialised skills and experience that your business requires whilst providing your offshore or outsource workforce with acceptable work conditions for $8,000 per year total cost? Exactly...It is not possible.

If you are actually prepared to seriously consider hiring offshore or outsourced Filipino employees you need to be reasonable, realistic and considered. Cost savings should not be the end game for any potential offshore or outsourced implementation.  Cost wise, there are significant savings to be had, but as with everything you will get what you pay for. You need to consider other factors, including:

  • Your businesses actual organisational objectives excluding the obvious cost savings that can be obtained.
  • Offshore staff engagement.
  • Staff satisfaction and turnover – a long term offshore/outsourced staff member is a valuable one.
  • Change management – Making sure that your local workforce is aware of and has bought into any offshore or outsourced solution.
  • Your long term business objectives. An offshore or outsourced workforce is only part of the equation.

The above is a not an exhaustive list of things that you must consider but need to be acknowledged as a key part of any explorative research you may undertake. A high quality offshore or outsourced staff provider will ask you these questions, avoid those who don’t.

As you can see it is quite easy to go off on a tangent when discussing the actual level of detail you need to go into when you are considering an offshore or outsourced workforce, other than saving money. I’ll revert back to providing some guidance on a few reasons why sourcing a full time offshore or outsourced resource for AUD$AUD8, 000 a year is not feasible.

 Salaries for lower level roles are often around a quarter of the cost of an equivalent Australian employee.  With more senior and experienced roles, this difference can reduce to 1/3 and sometimes even less compared to the equivalent Australian role.

In addition to salaries (and related government costs) you also need to take into consideration other on costs.  By far the cheapest option will be to have your staff member work from home but of course there are countless issues that will arise from this. Some of the obvious questions that you must consider include:

  1. Who else is at home during the day (Filipinos typically have large households with many people at home at any given time)
  2. What is the quality of the internet like?;
  3. How will IT support be provided?
  4. Is there emergency back-up power? (brownouts are common in many parts of The Philippines);
  5. Do they have all the tools and support necessary to perform their role?; how will maintain staff morale?
  6. How will you supervise and train them?

So to do things properly you will need to house them in a facility which provides all of this support or travel to Manila and set up your own facility. 

The reality is that you can get very cheap labour in the Philippines and that the savings are considerable but if you focus only on the cheapest solution, it is highly likely you won’t get the experience you bargained for.

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What can my business offshore or outsource?

Friday, Aug 14.


What can my business offshore or outsource?

Friday, Aug 14.

Business owners who have considered offshoring or outsourcing in the past, or have had a poor experience with it, are no-doubt curious as to how other businesses have made it work so well. This is particularly so now with the development and uptake of cloud based technology has made it easier than ever for business to develop, implement and effectively manage an outsourced or offshored workforce.

The rapid development of technology, increasing sophistication of offshore and outsourced service providers and availability of different delivery options mean that businesses can now select a solution tailored to their specific needs. Although having a wide selection of service providers and a variety of service delivery options is great for businesses it may actually create uncertainty around what option may work for them and what functions can and should be outsourced or offshored.

The success or failure of an offshore or outsourced workforce depends on a business having a good idea on what components of their business can be successfully completed offshore, Many of the stories of an unsuccessful implementation stem around businesses trying to offshore roles that should be maintained locally or trying to roll out an offshore or outsourced workforce to quickly. Either of these scenarios will likely result in failure. Understanding that not everything can be offshored or outsourced is critical to success followed by a measured, strategic and project based roll out.

This poses the questions as to what can your business effectively offshore or outsource?

A key element in the planning stage is how to strategically select which roles to outsource or offshore. The best way to start this approach is to consider the functions that are important but not critical elements to business success. These are usually core roles that support the more critical functions of the business. . Examples of roles that can (and have) been successfully offshored or outsourced include:

Administrative Services

Virtual assistants are capable of handling routine administrative tasks such as checking and answering emails daily, managing a director’s personal schedule, organising and managing a database, travel arrangements, data entry and documentation.

Customer Support

Offshoring or outsourcing of customer support has been occurring for over a decade. Many large organisations have been using offshored or outsource workforces to provide customer service in the form of phone or online support. A major benefit of offshoring or outsourcing customer support is the increasing importance of being responsive to customer queries on a 24/7 basis.

A number of US-based companies have transferred some of their customer support responsibilities to different outsourcing companies like those in the Philippines, where employees have a high proficiency in American English.

Accounting Solutions

Most, if not, all companies require assistance in accounting or finance. Whether it is for recording financial statements, payroll, bookkeeping and other accounting tasks. Businesses, especially start-ups, tend to neglect this task as they are focused to running the core operations of the business. As a result, they end up struggling to keep up with compliance requirements when they are about to undergo auditing. This is where outsourcing comes to the rescue.

Creative Solutions

Businesses outsource or offshore their visual and content requirements for branding. This includes graphic design for both offline and online marketing purposes.  This can include logos, banners, flyers, brochures, magazines and posters. Creative solutions also include content development such as blogs, articles for press releases, scripts and web content.

Legal Process Services

Law firms have been utilizing offshore and outsourced resources to reduce the administrative burden on local resources, Tasks that can be undertaken offshore include simple documentation development, precedent and workflow development, legal research, word processing, and data entry.

Marketing Support

Businesses have ventured on to boosting their marketing efforts through outsourcing, especially in the digital marketing field. Executing search engine optimisation activities, rolling out email marketing campaigns, social media management and online advertising are just a few of the marketing support services that can be offshored or outsourced.

Outsourcing and offshoring can be an effective way to grow your business and increase competitiveness in your industry.

Although this is the case it is important to understand that there is no ‘one size fits all’ way of doing so. Diving into the process without investing any time or effort in determining what you can offshore or outsource will result in a less than desirable result.

A measured, strategic and planned approach to offshoring and outsourcing will provide positive results. Start small and identify roles that can easily be offshored. Achieve success, secure organizational buy-in and then scale-up as your understanding and knowledge base increases. This is the benefit Diversify provides. We work with you right from the beginning in growing your understanding before you jump in.

It is important to remember that the tasks you should consider outsourcing may vary depending on your industry. For companies planning to use offshore labour, it is advisable not to pass on tasks that are highly critical to the company’s main strategy, especially at the start. Create a plan, budget the costs and document what success will look like before embarking upon your outsourcing or offshoring journey.

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Use of technology when offshoring and outsourcing

Wednesday, May 20.


Use of technology when offshoring and outsourcing

Wednesday, May 20.

Technology is the backbone of any outsourcing or offshoring activities and with that in mind it is useful to consider the technology related tools that are available for use when outsourcing/offshoring.

High speed internet/direct links

The speed and quality of your connection is the most important consideration when considering offshoring or outsourcing.  Sometimes when an internet connection alone won’t provide the security or speed you are after a direct link may be the solution.

Cloud computing

One of the biggest attractions on offer is cloud computing.  When done well this can considerably speed up your offshore computer network working far faster and more efficiently than a remote access solution. 

Digital Data

The move towards paperless or at least “less paper” offices means that more and more information is available to us electronically which in turn means we can usually access it from any place at any time. There is no doubt that cloud computing and digital data are two of the big enablers for distributed workforces.

Video conferencing

There is a range of video conferencing software solutions available ranging from the basic and free (skype/vsee) to commercial integrated solutions.  These have opened the way to communicate and collaborate with staff any-where at any time (subject of course to having a reliable internet connection).

Employee monitoring software

There are a range of software programs that allow you to remotely monitor the websites your staff visit, take random shots of their computer screen and otherwise oversee productivity.

Internet cameras

Cameras can help greatly both with communication and also general supervision.  Ceiling mounted cameras have become common in many offshoring facilities as they assist greatly with staff supervision.  Some clients even replicate this set up locally so that their offshore staff feel more connected to their local workforce.

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