Everything Filipino: Insights for Outsourcing to the Philippines
We’ll be your guide! Let’s explore how Filipino culture influences business operations, highlight the Philippine holidays you should be aware of, and cover other essential aspects of working with exceptional Filipino professionals.
But first, you have to understand key information about the business process outsourcing (BPO) in the Philippines…
Inside The BPO Industry in the Philippines
The rise of the BPO industry in the country began in the 2000s, but there’s no indication that it will stop anytime soon. As reported by Nexford University, the Philippines commands a substantial 10 to 15% share of the global BPO market—a testament to its significant impact on global business operations.
Despite the Philippines' established position in the BPO sector, there remains a wealth of untapped talent across industries, from IT support to healthcare. This cultural richness not only enhances the Philippines' appeal as a hub for outsourcing but also underscores its potential to meet your evolving needs as a business.
Before diving into this strategy for your business, it's important to grasp what you're getting into. Working effectively with Filipinos hinges on understanding their culture, which can impact your operations.
Filipino Culture That Impacts Business Operations
Filipino professionals are known for strong work ethics and exceptional English communication skills, attributes that have solidified the Philippines' reputation as a leading outsourcing destination. Beyond these strengths, however, Philippine culture also influences how businesses operate.
A strong sense of community
Filipinos have strong community and family ties, often translating into a collaborative and supportive work environment. You can expect Filipinos to excel in teamwork and cooperation, fostering camaraderie among their colleagues.
While you might worry that this emphasis on group dynamics could affect individual performance, this is usually not a problem. Filipino experts are still good at accomplishing their assigned work.
Conflict aversion
Filipinos may be hesitant to voice their disagreements or admit mistakes so openly. This is because, more often than not, they prioritize harmony and avoid confrontation. As a result, indirect communication is a common situation in which you may find yourself. You may also need to give feedback more subtly and privately.
Employers or managers should create a safe environment where Filipino employees can be comfortable expressing their thoughts and opinions.
Outcome-oriented
Filipinos are driven to achieve results and make progress. This is all rooted in their desire to provide for their families and contribute to their communities.
While this contributes to a productive working environment, it can also lead to stress and burnout. Filipinos tend to push themselves hard to deliver excellent performance, affecting their well-being. That’s why organizations must ensure work-life balance, putting value on both business results and the well-being of their employees.
Respect for leadership
Because of the high level of respect Filipino employees have for their immediate heads, they are still less likely to question decisions or offer alternative suggestions. This is rooted in Filipino cultural values like “pakikisama.”
Managers can leverage this respect by providing clear guidance and mentorship while encouraging input and innovation from all team members.
A sense of gratitude
“Utang na loob” is another Filipino value you may be familiar with. This trait underscores the importance of reciprocity and indebtedness, significantly enhancing employee motivation and loyalty.
Career progression
Filipinos, as a whole, are known for their resilience. They are flexible and resourceful, often looking for opportunities to improve. This quality is an asset for businesses that are growing and are in fast-paced industries. Safe to say, Filipino employees are always looking for ways to contribute to organizational growth and adaptation.
Filipino Culture That Impacts Collaboration
Apart from its impact on your business operations, Filipino culture can also impact your team’s collaboration.
Emotional Expression and Conflict Avoidance: How To Navigate the Philippines
Filipinos have many high-value strengths when we look at the culture of their country. But, there are also some important factors you must consider when looking to get the very best out of your working relationship. One critical thing not to be missed is how to create an environment conducive to the best output.
Below is a table featuring the valuable work of Erin Meyer on cross-cultural management. He plots a graph and organizes countries based on their levels of emotional expression versus confrontation and conflict avoidance. Filipinos rank high both on emotional expressiveness and conflict avoidance.
How to Navigate Filipino Cultural Communication
In order to foster strong working relationships, this graph teaches us the importance of creating safe spaces where your team in the Philippines feels confident to raise any challenges that come up. Listening to their concerns, providing clear feedback, and reassuring them that a mistake won’t cost them their job are all key factors in ensuring the best return on your high-value human capital.
Cities to Outsource to in the Philippines
Thanks to their top-notch workforce, great infrastructure, and business-friendly environment, these cities have become the hotspots in the Philippines for outsourcing or successfully hiring remote workers:
Metro Manila
Metro Manila, the capital of the Philippines, is a bustling metropolis and the country's economic, political, and cultural hub. It's home to significant government institutions, central business districts, and various international corporations.
But what makes it an outsourcing destination? Apart from its abundant Filipino talent, the city has universities and technical schools that churn out competent graduates yearly.
Metro Cebu
Situated in the Visayas region, Cebu has swiftly risen as another prominent outsourcing destination. According to Darwin John Moises, vice president of Cebu IT-BPM Organization, 60% of outsourced business processes in Cebu are contact centers, while 40% are knowledge process outsourcing (KPO).
Davao City
Davao City is renowned for its high-quality living standards and safety. It is an emerging outsourcing hub, attracting companies such as global e-commerce titan Amazon to establish a branch in the city.
With its well-educated workforce and lower operational costs compared to Metro Manila, Davao is an appealing choice for businesses looking to scale.
Clark Freeport Zone
The Clark Freeport Zone is a former U.S. military base transformed into a thriving business and industrial area.
With its modern infrastructure, including international airport services and a network of highways, Clark is a strategic location for outsourcing. The area's tax incentives and business-friendly policies further enhance its appeal to foreign investors, which is why BPO industry leader MCI BPO has expanded their operations in the city.
The Philippines’ Time Zone and How It Affects Your Business Operations
When it comes to offshore staffing, a key concern is managing differing work times. The Philippines, located in Southeast Asia, operates on Philippine Standard Time (PST), which is eight hours ahead of Coordinated Universal Time (UTC+8) and does not observe daylight saving time. This time difference can be challenging for Western companies, such as those in the United States, when coordinating work schedules.
However, the landscape of global business operations has evolved significantly. An Upwork study suggests that 22% of the American workforce will be remote by 2025.
Advances in technology have minimized the limitations posed by geographical locations. The COVID-19 pandemic further accelerated the adoption of remote work, proving that effective collaboration across different time zones is not only possible but can be highly efficient. This newfound flexibility allows companies to manage offshore staffing more seamlessly.
Handle time differences when outsourcing your operations in the Philippines by:
- Overlapping work hours: Identify and establish overlap hours to ensure real-time collaboration for critical discussions and decision-making processes.
- Implementing flexible work schedules: Implement flexible work schedules for teams to cater to overlapping time zones.
- Planning and scheduling in advance: Use project management tools to plan tasks and meetings well.
- Establishing clear communication channels: Use tools like email, instant messaging, and video conferencing to maintain seamless communication.
- Practicing regular updates and reporting: Schedule regular updates and reporting sessions to ensure all parties are aligned with project goals and deadlines, minimizing the impact of time zone differences.
List of Philippines Holidays for 2024
In the Philippines, holidays are classified into two main categories: regular holidays and special non-working holidays.
- Regular holidays are fixed dates that commemorate significant historical events or religious occasions.
- Special non-working holidays are additional holidays declared by the government, often to commemorate specific events, promote cultural awareness, or allow citizens to observe certain traditions.
But what makes it crucial for businesses to know about these Philippine holidays? The main reason is that they are tied to cultural and religious beliefs that hold significant value for Filipinos.
So, don’t forget to mark these dates on your calendar if you have a Filipino colleague!
Why Outsource to the Philippines?
Simple—to have quality results while saving up to 80% on labor costs. The Philippines offers competitive labor costs, making it an attractive destination for outsourcing. As of 2024, the average monthly wage in the Philippines varies across industries but generally remains cost-effective compared to Western countries.
If you want exceptional and high-impact employees without costing your business its whole budget, hiring remote Filipino workers works. Besides, it’s no accident that many global companies are outsourcing in the Philippines!
The minimum wage in the Philippines varies by region and sector. Metro Manila, the country's capital, typically has higher minimum wages compared to other regions due to its higher cost of living. However, despite these variations, the Philippines’ average wage is still generally lower than in many developed countries, making it economically advantageous for businesses looking to grow their operations.
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