Offshore Outsourcing: How Cost-Effective Is It?

The BPO industry continues its steady rise with an emphasis towards skill specialisation offered by offshore outsourcing. It continues to position itself as one of the most strategic business decisions through cost-benefits without sacrificing quality output. Offshoring gives your company access to several benefits and opportunities such as reduced operational expenses, increase in productivity, and market expansion. 

Through offshore outsourcing, essential business functions don’t have to burn a hole in your pocket. Offshoring connects your business with top-quality talent, especially in the Philippines, a country renowned for its competitive salary rates and vibrant BPO ecosystem. We know that business scaling can be overwhelming as in-house teams grow. But, offshore teams provide the scalability to let you focus on core functions and expand your reach. Consider these examples:

Communicating with the Team is a Breeze

Filipinos are renowned for their strong English communication skills, consistently ranking high in global proficiency. This, combined with their excellent interpersonal skills and cultural awareness, makes collaborating with a Filipino team a seamless experience. Forget communication barriers – you can expect clear updates, timely responses, and a focus on building trusting relationships.

Around The Clock  24/7 Customer Service

Philippine offshore teams can provide 24/7 customer support, ensuring no inquiry goes unanswered for more than 12 hours. The comprehensive coverage lets you retain global clientele and outpace competitors limited to standard business hours.  

Increases your Digital Presence

In today’s digital age, a sluggish website is a dealbreaker. But with offshore web developers, you can establish data centres in strategically-located regions, delivering significant cost savings while ensuring blazing-fast performance for users worldwide. The talent pool in the Philippines offers skilled web developers at significantly more competitive rates compared to some established regions.

Unlocking Markets with Cultural Savvy

An experienced Digital Marketer becomes your business’ bridge to unexplored horizons. Their deep understanding of local nuances, preferences, and regulations acts as a cultural compass, guiding your international expansion and helping you connect with new client segments across the globe. While top-tier talent in other countries offers premium rates, you can find equally capable professionals in the Philippines at a competitive cost structure.

Seamlessly Transitions to Digital

Offshore outsourcing allows you to optimise workflows, boost staff morale, and find the perfect skillset, regardless of location. Roles such as Social Media Managers are a good example of optimising a hybrid setup. The Philippines’ Social Media landscape warrants consideration for businesses seeking competitive talent at a good value.

Your Business Thrives with an Offshore Team

Offshore teams provide a strategic mix of cost savings, access to global talent, and 24/7 project support, fueling your business growth without saturating your resources. A trusted offshore provider will help your business thrive through top-notch work. Whether it be in software development, customer service, or data analysis, an offshore team frees up your in-house staff for innovation and growth projects. 

HGS boasts a community of talented and driven professionals. Our collective expertise spans across leading companies in a multitude of industries. Feel free to contact us to start your offshoring journey today!

Citations

Business Solutions. “5 Reasons Offshoring in the Philippines Is a Sound Decision.” Outsource Philippines, 11 Oct. 2023, outsource-philippines.com/offshoring-in-the-philippines/.

HGS Offshore Staffing Solutions. “What Makes an Offshoring Strategy Effective.” HGS OSS, 28 Apr. 2024, hgsoss.com/newsroom/what-makes-an-offshoring-strategy-effective/.

Marcelo, Elizabeth. “Philippines Improves in English Proficiency Index.” Philstar.Com, Philstar, 2 Dec. 2023, www.philstar.com/headlines/2023/12/02/2315811/philippines-improves-english-proficiency-index#:~:text=MANILA%2C%20Philippines%20%E2%80%94%20The%20Philippines%20improved,111%20in%20the%202022%20EPI.

Ramotowski, Stephen. “The BPO Industry Is Growing Exponentially Year on Year, Bolstering the Economy, and at Last Count Employed 1.3 Million Filipinos.” Nexford University, 30 July 2024, www.nexford.edu/insights/the-future-of-bpos-in-the-philippines-and-growth-opportunities.

How to pick your outsourcing or offshoring service provider

So you have been considering in engaging an offshore staff for your business. No doubt you have a friend or a friend of a friend that is offshoring or outsourcing and apparently getting great results – how do you go about choosing an outsourcing service provider and how to go about it?

The first thing you need to think through is what will “success” in your offshoring or outsourcing project look like? A common mistake businesses make is to judge the success simply on the direct cost savings and not look at the bigger picture.

For example:

A business had an Accounts Payable role in Australia and the salary for that role was $65,000. They now have a staff member in the Philippines who only costs them $20,000 – Bingo they are a mile in front! – or are they ….?

Ask a few more questions to scratch a little deeper and you might also find out that:

• As a result of not developing an internal communication strategy to ensure that the offshoring plans were well received in Australia, two long term staff resigned, fearing their jobs might be at risk;
• The business’ accounting fees have now increased by a few hundred dollars a month as a result of the extra time it is taking to fix journal entries that haven’t been posted correctly;
• The CFO is having trouble supervising the Filipino staff member as they have no reporting on utilization and no point of contact within the service provider to resolve this issue;

To top things off the Filipino staff member has just resigned because:

• they don’t feel valued (they are working in a “battery hen” style office with rows of identical small cubicles)
• no one has given them any training;
• they don’t have an agreed position description/KPIs;
• they are having some problems with the remote IT connection which is making it hard to work efficiently;
• they think their Australian manager is rude because they only ever email them and don’t talk to them face to face by video conference
• they were made to work through the Filipino public holiday on All Saints Day (they had their yearly family reunion planned for that day).

What is often presented as very simple and easy to do is often not and this is definitely the case with offshoring and outsourcing.

If you want your initiative to be successful then the outcomes you, want to achieve, in addition to the obvious cost savings, should include:

• Australian staff support and engagement
• Cultural integration
• Business integration and consequently a “one business” mentality
• Smooth transition of the functions
• Low staff turnover
• Minimal complaints

The only way you will achieve these objectives is with the assistance and guidance of your offshoring service provider. Be careful who you pick – many of the service providers do little more than offer a serviced office with recruitment assistance. Fail to pick the right provider at the start of your process and it is likely you won’t get the result you were looking for.

Why Offshoring Is Better Than Freelancing For Your Business

As the new year begins, it’s not uncommon for businesses to start adapting new strategies. Perhaps they may be looking for adjustments, or want to try something new. Regardless of the reasons, many different strategies are being considered by businesses of scales. Current communication technologies have made it easier to collaborate with more talented employees overseas. This has led to the rise of offshoring and outsourcing becoming viable business solutions.

With this rise also come new opportunities to take advantage of a global workforce. Once such opportunity is the consideration of freelance work. Hiring freelancers to different functions are often seen as a way for businesses to produce content at a cheaper cost.

Sound familiar? Well, when you list down what both offshoring and freelancing do, similarities will pop up. However, these similarities do not often account for the quality of work produced. Although both have the same approach, offshoring is a much more worthwhile investment than freelancing.

What freelancing functions means

One of the biggest reasons companies look to freelancing is cost. Compared to most business strategies out there, hiring freelancers for a set amount of time will them less. With no overhead to consider and with the right people, massive savings are to be had.

However, freelancers are also not very reliable. Because they are not fully committed to your company, they may not be available during crucial moments. Moreover, this also means that they are taking projects from other companies and you may not be given top priority. We also predicted last year that data security needs to be a top priority for companies. Consider the security risks that may arise from hiring freelancers who are not contractually bound to you.

Offshoring as a more cost-effective solution

Although offshoring is pricier than hiring a freelancer, it is still the more cost effective. Hiring an offshoring staff for different functions is much easier to manage than freelancers and you benefit from your own quality control. It is often recommended for medium, large and listed companies to consider offshoring than it is to freelance. The people who will make up your offshore team are often put through rigorous screening processes to see if they are up to your standards. Some offshore providers are not content with just supplying “okay” candidates to their clients. They want to make sure the people making up offshore teams are the best among the rest.

The key word here has always been “dedication.” Your company is given top priority on all the resources and assets produced by your offshore team. They know what your business objectives are and work for you to accomplish them. Through this, companies also benefit from better security and lowered data theft risks as well.

A new outlook for the year

To its core, whether you choose to offshore or freelance will fall on what you choose to accomplish. No business strategy is perfect, and offshoring is no exception. But if companies are willing to take the risks and dedicate resources to managing their teams, they will produce the needed results to see in the long run.

Our 2018 Offshoring Predictions Revisited

It has been an eventful 2018 for us at HGS. And it was not just for us as a company. We also saw some significant happenings within the offshoring landscape. As we pride ourselves in being at the forefront of offshoring in the Philippines, we experienced many of these events – and at times challenges – first hand.

Towards the end of 2017, we made a few offshoring predictions that we believed how the industry would be affected. We discussed our industry and how new processes – from automation to cloud computing – would play a role in the future. As the year comes to a close, we thought we would take a look back at what we predicted and how the year played out.

Stronger Industry Resilience

Prediction: The start of 2018 will once again be full of careful optimism, but offshoring – and the BPO industry as a whole – will look to carry its momentum of growth and expansion as well.

“Resilient” is indeed one of the best ways to describe the entire BPO industry. For the past few years, it has consistently adapted and overcome changes in the business landscape. Thanks to innovations, new technologies and rising competition, several new trends began to emerge in the industry in 2018. As more companies acknowledge its potential, processes like offshoring are being called “the new normal” due to its global reach.

Despite some setbacks amidst a changing geopolitical climate, the momentum of industry growth will not be slowing down anytime soon. As it stands, the global BPO market is projected to reach $262.2 billion by 2022.

A Different Conversation About Data Security

Prediction: Because of consistent major data breach cases, security is going to take center stage when considering business strategies for 2018.

Data security and handling was one of the biggest stories of 2018. Despite less breaches in the first half of 2018, security continued to be a persisting problem, not just in the tech industry.

One thing we did not anticipate was the shifting of the conversation on how data is handled. While data security will always be important, access and privacy should also be considered. One of the biggest stories of the year involved Facebook and consulting firm Cambridge Analytica, where 87 million personal accounts were compromised and used in different extents without permission. This and other incidents in 2018 were met with fierce backlash and showed the need for stricter, more rigid security protocols.

Another big story in 2018 was the implementation of the General Data Protection Regulation (GDPR). While not initially part of our offshoring predictions, its implementation had a global effect we are still feeling today.

GDPR at Glance

While GDPR was signed into law back in 2016, it was implemented just May of this year. GDPR was written with the intent to protect the privacy rights of European citizens. But as most companies that collect private information operate globally, the law forced companies to change its policies worldwide.

We’ll be first to admit that we fell a little short with our prediction that companies would prioritize data security. The Cambridge Analytica bombshell, implementation of GDPR, and a slew of other data breaches this year show that. However, we also believe these incidents brought a new level of awareness to consumers on how they should protect their personal information.

Certainly no principle is perfect in execution and despite the best intentions, data security has its own challenges. However, the extent in which action is taken affects how businesses are perceived.

Watch The Ever Growing Cloud

Prediction: Businesses will look for more value in the cloud to drive transformation.

Cloud technology continued to make big strides in 2018. It’s continued usage gave a glimpse of what the business landscape will be like in the coming years. No longer seen as a fad, the use of cloud technology will be considered a new reality for businesses that want to stay competitive. By 2020, early adoption functions will range from 90-97%, while also being in the 85% range for back office functions.

Additionally, countries like India are also aiming for one million cloud computing jobs by 2022. As companies continued to spend more on cloud services in 2018, the number of services also began to rise. In particular, “Platform as a Service” is being tapped to grow the most in 2019.

Call Centers Continue to Decline

Prediction: With more automation and hiring of virtual assistants in the coming years, the call center as we know it is in decline.

According to the 2018 Call Center Industry Report, over 750 customer service professionals admitted that they are struggling to stay at pace with current customer needs. The report cites that providers felt they were behind the curve when it came to evolving from their traditional call center setup. The need for a shift towards a more flexible model and better quality talented were cited as well.

This should come as no surprise. As we have seen in our industry, having a full call center solely focused on customer service is becoming less and less viable. With more demand for specialized roles to be undertaken, it’s imperative that businesses broaden their horizons and consider offshoring higher level roles. This helps them save on cost while also staying competitive.

All About Automation

Prediction: As offshoring prides itself as being in the forefront of trends, it must also embrace the use of automation. At the same time, it must also find the perfect balance of optimizing both its AI and human capabilities.

Based on our offshoring predictions, more companies in 2018 saw the viability of automation. In particular, they saw how it would especially affect low-skilled jobs. This sense of urgency was acknowledged by many providers in countries like the Philippines. There, government organizations urged the BPO industry had to “prepare” for wider automation usage. Countries like India also acknowledged that the Philippines is getting ahead of the automation curve.

As offshoring prides itself as being in the forefront of trends, it must also embrace the use of automation. This means finding the perfect balance of optimizing both its AI and human capabilities.

What We Learned from our Offshoring Predictions

The global business environment is a rapidly changing one and it is often hard to keep up. While it is clear where some practices are heading, others are a bit more unpredictable. Some of our other predictions showed no significant changes, which may need more long term observation.

The year was certainly not without its challenges. With the issues surrounding data privacy and security, you can bet that consumers will be more careful and hesitant with what they share online. Those who also refused to evolve past traditional methods will most certainly find themselves struggling in the coming year.

Despite all we saw from our offshoring predictions, it was clear the industry as a whole had a good 2018. People will continue to do business globally and competition will be more exiting than ever. With call centers on the decline and automation on the rise, the need for more specialized talent will be more important than ever. As resilient as the BPO industry is, it has lasted this long because of the talented workforce that make it up. We believe that as more companies look towards offshoring, we will see a much more in-depth and diverse talent pool. This can only be beneficial for both companies that want to stay ahead and the talented workforce that will comprise offshore teams.

Surprising Roles The Retail Industry Can Offshore

The retail industry is experiencing a beneficial yet challenging transition. With more retailers going digital, online shopping has become more competitive. This means knowing a little bit about everything in the digital space and going beyond what it traditionally means to be a retailer. Some of the most successful companies today see what it means to adapt current business trends to their advantage. They know how to make the most of their business without spending too much.

This is where offshoring comes into play. With more retailers looking at a bigger global presence in today’s online landscape, staying with the trend has become more important than ever.

What Retailers Need To Know

Many retailers may be thinking that offshoring roles are the typical ones that appear in the news. It’s true that retailers can benefit from offshoring their customer service and administrative tasks. Delegating these functions will certainly contribute to further productivity and efficiency in their operations.

However, offshoring is now not just limited to these roles. With the ever-changing business landscape, the need for more specialized, highly trained roles has become a priority. This has resulted in wider markets, better brand awareness, and a stronger presence online for many retailers. Through proper implementation, many in the retail industry have become aware of the potential offshoring teams have as they take on important roles and collaborate with their local teams.

In other words, if you still haven’t considered offshoring to help your retail business, there’s no better time to start than now. Let’s look at some of the roles that you will be able to offshore.

Finance Roles

More and more finance roles are being sent to offshore teams. These roles have ranged from accountants, analysts, bookkeeping and overall financial administration. Whether they’re a medium, large or listed business, the retail industry can take advantage of offshored financial roles. The cost savings incurred would be significant compared to what they would hire locally. The most experienced retail companies today see where the current business trends are going, including offshoring.

The very idea of offshoring such vital roles would have been unheard of only a few years ago. Letting an offshore team handle a company’s financial responsibilities might have even been seen as taboo. However, offshoring has shown that any of the roles listed can be handled at very high levels. Today’s technology has made it easier for people to communicate and collaborate better regardless of where they are in the world. That is to say, if you haven’t thought about hiring an offshore accountant, your competitors may already have.

IT Roles

When you think about the retail industry, you don’t normally associate it with IT roles right away. In fact, many retailers would probably say that handling the backend of their website isn’t in their priority. However, this line of thinking needs to be changed, especially in the current business environment.

Part of the success of retailers like Amazon and Loblaws is their understanding of ecommerce’s impact in today’s society. They see the real value of establishing a strong online presence that allowed them to scale their businesses based on consumer demands. In order to do this, they needed a strong back office support from an IT team to handle different channels of their businesses. Through regular maintenance and data handling, an offshored IT team allowed them to stay competitive at a lowered cost.

Marketing Roles

With your website in place, your retail business will no doubt need leads and traffic that will direct people to it. This is where a smart marketing team becomes effective. Their understanding of trends and consumer behavior shapes the strategy and direction your business should take. This is especially important in the retail industry, where there are numerous specialized interests that can be catered to. Through smart content distribution, your marketing team can be a dedicated source of asset creation that ranges from blogs, research papers, infographics and even short video presentations. In turn, you retailers can turn browsers into potential buyers.

The content and direction online that a marketing team can create are vital to any retail business. Working with them also does not need to be a costly endeavor. Many industries have espoused their satisfaction of working with an offshore marketing team, and these benefits can also be carried over into the retail industry.

Working With The Right Provider

It’s certainly an exciting time to be in the retail industry. With more tools and technology in place, businesses can reach more customers than they previously could. We’ve seen already how major companies have utilized offshore teams to their advantage by assigning them mid to high-level functions they can manage.

HGS continues to work closely with clients in the retail industry and we understand their different needs. Through a collaborative process with us, our clients have produced strong results and have been able to free up resources for further ventures. Drop us a line today to start your offshoring journey.