Since the birth of telemarketing in the late 70s,’ salesmen no longer needed to go door to door to physically set appointments or sell products in person. It saved companies huge amounts on marketing and advertising cost. In the February 2017 IAOP Outsourcing World Summit held in JW Marriott, San Antonio, Texas; industry players gathered reasons other than the 50-60% cost savings to be prime motivators for outsourced services.
The favorite destination is the Philippines whose economy generates 5% of its annual GDP from outsourcing operations. The country is reaping the returns from the benefits of the Outsourcing Industry like other world economies. The Monster Employment Index reported a 9% steady growth in the industry annually. To date, the country ranks 3rd place as the favorite and most promising outsourcing destination in the world. Despite the adaptation of AI and automation in many industries, customers still prefer to interact with people rather than machines for on-sale and after-sale communication.
Business analysts and the Philippine government stress the vitality of Information Technology-Business Process Management (IT-BPM) to the economy with subsectors in Information Technology, BPOs, animation, game development, software development, contact centers and health information management. They expect 9.9M jobs, $40B in revenues, and a 15% global IT-BPM market share from 2016 to 2022. The initiative labeled as Roadmap 22 aims to make the BPO subsector into a $39B industry by the end of the campaign. Among the IT-BPM, BPOs remain as the top earner.
Here are reasons to outsource in the country:
Internal Improvements, Core Focus and Innovations
Clients reported being able to focus internally and employ needed improvements to further the business. Delegating telemarketing and telesales to a BPO freed them from repetitive tasks that kept employees unfocused and unproductive. In-house productivity and innovation increased within the organization.
Cost Reduction, Revenue Improvement and Increased Profit margin
Revenue improvement was also a byproduct of outsourcing. Having been able to access a talented sales team widened the reach of clients’ businesses on a variable cost structure. Avoiding fixed cost is already profit earned by the company.
Having been a former colony of the United States, English became the second tongue of the land. Filipinos developed a neutral tone that customers reported as audibly coherent. Their English proficiency not only makes for a hype office culture but also highly adaptable workers to Western conditions and ideas. Filipinos are able to use the English language with expertise by taking advantage of their rich word bank to get their points across effectively and make a sale. This is very handy in the BPO industry for speedy transactions with minimal agent slip ups. Language gap is a non-issue allowing agents to service their clients efficiently.
Staff’s Service-oriented Personality
The Philippines is a tropical country with temperature highs of up to 42 °C during summer. It is also located in the “Pacific Typhoon Belt” making it prone to more or less 20 typhoons yearly while nestled on the “Pacific Ring of Fire,” susceptible to earthquakes and volcanic eruption. Living in such a geographically challenging site had made Filipinos very resilient. Workwise, weather will never be a work issue. These factors helped Filipinos adapt to change easily. They can handle a variety of diverse situational tasks with minor supervision. The citizens are very talented in this regard.
Filipinos are tender-hearted by nature. The country’s culture, geographical location and life situation allowed them to place themselves in someone else’s shoes; thereby, being capable of giving quality customer care. They are capable mediators. They can relate to clients easily and offer the best pre-designed solutions that cater to both the employer’s and customer’s satisfaction.
Low Labor and Rental Cost
Minimum wage for entry level positions range between US$300 to 400 dollars. This is 40-60% cheaper when compared to the pay rate in industrialized countries. BPOs attract principals to outsource by offering the low labor cost incentive. Doing so, the Principal reduces his salary expense. He can then focus on key functions to grow his business while his customers are serviced by learned professionals.
The Philippines has the lowest rental rate with high availability in the Asia-Pacific region. Companies maximize their earning potential by establishing hubs outside metropolitan areas where rental rates drop even lower. Public transportation is readily available making their offices accessible to workers and potential clients wherever they set office.
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