Building a Successful Offshore Team in the Philippines

Building an offshore team in the Philippines has become a well-established and popular strategy for scaling operations and reducing costs. 

If you’re considering outsourcing your team and need help figuring out where to begin, this comprehensive guide will provide the information you need to make an informed decision.

Options for Building an Offshoring Team in the Philippines

1. Hiring a Freelancer/Independent Contractor

Pros:

• Cost-effectiveness: Generally, freelancers are less expensive than onshore employees or agency contractors. According to Indeed and Glassdoor, the estimated total pay for a freelancer in the Philippines is not less than 340.00 USD but not more than 1,330.00 USD monthly, depending on the job description and task accounted for. 
  
  These figures reflect the median based on salaries submitted by platform users. The projected additional pay amounts to 410.00 USD. This extra compensation may include cash bonuses, commissions, tips, and profit sharing.

• Flexibility: Freelancers can work part-time or full-time or even on a specific project alone, providing flexibility in terms.

• Diverse Skill Set: Sites such as Upwork, Freelancer, and OnlineJobs PH provide access to a wide range of skills and expertise, allowing you to find specialists for virtually any task or project.

Cons:

• Reliability: Freelancers may have multiple clients, leading to potential availability and commitment issues.
• Quality Control: Hiring freelancers may lead to varying levels of quality and consistency in work output, as each freelancer operates independently and may have different standards or approaches to their tasks.
  
• Security Risks: Hiring freelancers can pose potential data security and confidentiality risks, as freelancers often work at home and may not adhere to your company’s security protocols. This lack of control can increase the likelihood of data breaches or unauthorized access to sensitive information, necessitating stringent measures to protect your company’s assets.

2. Creating a Local Company in the Philippines

Pros:

• Brand Visibility and Awareness: Building a dedicated physical space presents significant opportunities for enhancing brand visibility, credibility, and local presence. A physical space also increases the chances of successful recruitment within the local community.

• Direct Oversight: Having immediate and hands-on control over the business operations, finances, and decision-making processes provides a level of oversight that enables swift responses to any issues or changes, ensuring that the company can adapt quickly to market demands and opportunities. 
• Company Culture: A culture that aligns with local values such as family, respect, and community can significantly boost team member loyalty and customer satisfaction. This cultural partnership enhances the company’s reputation, making it an attractive place to work and do business.

Cons:

• High Initial Costs: Setting up an office requires significant investment, including leasing, utilities, and equipment.
• Administrative Burden: Hiring or handling local regulations, payroll, and HR tasks can be complex and time-consuming.
• Legal and Regulatory Challenges: The Philippines has a complex regulatory environment with significant bureaucratic hurdles. Registering a business can be time-consuming and requires navigating various government agencies. According to BusinessWorld, “slow service” consistently ranks as the number of complaints against government agencies.

3. Partnering With an Established Outsourcing Company

Pros:

• Human Resources Management: Agencies offer pre-vetted candidates as they manage the whole process of recruitment, such as publishing hiring ads, administering qualifying exams, handling interviews, and conducting background checks.
• Reduced Overhead and Increased Scalability and Flexibility: Partnering with a service provider lowers your setup costs, as the outsourcing partner provides infrastructure and administrative support. You can also quickly scale your team up or down based on business requirements/needs without the hassle of hiring or layoffs.
  
• Data Security: Enhance data security by working with only reputable outsourcing agencies that are compliant with regulations such as ISO 27001, PCC DSS, GDPR, and HIPAA.

Cons:

• Finding the Right Partner: It is crucial to find a credible and well-established outsourcing company that offers competitive pricing while maintaining high-quality standards. Several new BPOs offer markdown rates but lack the track record of excellent service.
• Reduced Direct Oversight: YYou might have less hands-on management than handling an in-house team, potentially leading to misalignment of priorities and misunderstanding of instructions.
• High Attrition: Due to the supply of BPOs in countries such as the Philippines, the workforce can easily hop from one call center to the next. According to Inquiro, attrition rates can go as high as 40%.

Partnering with an established outsourcing company, such as SophiOutsourcing, streamlines building your offshore team, saving you time and resources by handling onboarding, training, quality assurance, and operations management.

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