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Is it true? Outsourcing to BPO Philippines and other nations reduces Americancitizens’ job chances.
Well, the truth is, it’s still impossible to know the true impact of outsourcing on the economy.
But let us arm ourselves with some basic facts. With all the debate surrounding outsourcing, reviewing the facts and data is a good idea so that we may begin to make sense of the arguments for and against outsourcing.
In this article, we will discuss how outsourcing jobs affect U.S. employment.
The One Reason Why Companies Outsource
Let us plunge directly to the deep end.
68% of companies in the U.S. outsource their services to low-cost countries, including small businesses. If there are 10.75 million businesses in the U.S. as of March 2020, 7.31 million prefer hiring people from developing countries than Americans.
And it does not stop there. The business process outsourcing market is poised to grow by USD 40.16 billion during 2021-2025, progressing at a CAGR (Compound Annual Growth Rate) of over 4% during the forecast period.
This implies that outsourcing is bottomless for businesses. It keeps going deeper and deeper, leaving behind companies that decline to outsource.
Now, the question is: Why is outsourcing so attractive to businesses and entrepreneurs?
According to Deloitte, one of the industry’s most trusted lists for outsourcing statistics and market research, companies see outsourcing as an effective cost-reduction strategy.
In their report, 70% of the 40 executives they interviewed agreed that the critical objective of outsourcing is to minimize cost.
|Speed to Market||20%|
|Access to Tools and Processes||15%|
Location and economy directly affect BPO pricing. Outsourcing to the Philippines alone can help you save up to $16-$25 per hour.
To give you an idea of call center pricing by geographic location, here is the updated matrix:
|United States and Canada||$22 – $35+|
|Australia||$35 – $55|
|Africa and the Middle East||$15 – $20|
|Eastern Europe||$12 – $25|
|Latin America||$8 – $18|
|India||$5 – 9|
|Asia and Philippines||$6 – $8|
The impact of COVID-19 plays a key role here.
With the surge of the virus, collared workers are forced to resign or retreat at home. They are leaving a void in some essential positions.
This inspires businesses to outsource core and non-core services to BPO Manila, Philippines, and other countries to support the slow and steady collapse of the economy.
Hiring a call center is an excellent strategy to ensure your company and its clients constantly communicate.
However, when determining whether or not your company needs a call center, cost is one of the most important aspects to consider. Price may not drive a deal to the table, but dinner isn’t over until the bill has been paid.
Furthermore, we already established that outsourcing costs are cheaper than insourcing. But what does this imply in the greater sense of things?
U.S. Companies Should Outsource More Jobs to Developing Countries
Insourcing to the USA is cost-inefficient compared to offshore companies.
To enlighten you, here is a comparison of how much it would cost to hire a U.S. call center agent versus an overseas customer support worker.
|Location||Salary (per year)|
Because of economics, labor costs in countries like the Philippines and India are significantly lower than the Western rates.
This can also be a factor that pushes companies to outsource more than 300,000 American jobs.
Opting to get an in-house customer support team can be pretty costly. Just take into consideration the other fees, charges, and expenses you will pay with an in-house call center besides the salary:
|Software and Hardware||$3,600|
However, outsourcing saves up to 20% – 30% of the total expense depending on the call center pricing structure. It is because you will no longer need to pay enormous amounts for office space, software and hardware, and hiring costs.
It is not an understatement to say that outsourcing is cost-effective. However, should this be a basis for outsourcing more jobs to other countries?
The answer is yes. But let us explain further.
Why Should You Outsource More?
You, as a businessman, know that not everything is about money.
Besides the costs, other factors may convince you to outsource more.
Outsourcing allows you to get the best talent from any part of the world.
Your core team might be fantastic at a few things, but nobody is perfect at everything.
By outsourcing particular tasks, companies can often substantially improve performance by drawing on the niche skills of experts in specific fields across countries.
Of course, all companies want the best employees. And this is only possible when we expand our pool of talent.
When someone quits, you lose all the money you spent on employing and training them. Turnover at the wrong moment (and is there ever a right time?) can disrupt your operations.
Your firm will become more consistent as a result of outsourcing.
Suppose your human resources manager leaves the company at a critical time. In that case, you must scramble to fill the position (possibly hiring the first acceptable applicant, even if they weren’t great), do the work yourself, or go without it.
However, if you outsource services, your operations will run smoothly and without risk.
Access to New Resources
Recruiting and training a new team member is time-consuming and costly.
You must demonstrate your procedures and workflows or develop unique processes just for them. Sometimes, you may need to invest in their schooling to ensure they have the necessary abilities for your company.
These costs are assumed by the service provider when you outsource your core or non-core business functions.
However, BPO companies in metro Manila can bring specialized knowledge, expertise, and experience you couldn’t afford alone.
Any licenses or accreditation that the task necessitates are the service provider’s responsibility. They keep up with industry changes and trends, learn new techniques, and improve their skills by focusing on their expertise.
BPOs also have access to expertise and tools you may not require today but will need in the future.
Where Can I Outsource?
BPO companies in the Philippines have one thing in common; they are affordable and ready to help other companies. That is why companies that outsource to the Philippines return for support to their other ventures.
So to make it easy for you, we compiled the top 10 SME-focused call centers in the Philippines for the last three years:
Top BPO Companies in the Philippines 2019
|3||Fusion BPO Services|
|7||WNS Global Services|
Top BPO Companies in the Philippines 2020
|7||Main Source 365 Tech|
|10||7th Media Digital|
Top BPO Companies in the Philippines 2021
|2||Six Eleven Global Teleservices|
|5||Support Services Group|
|9||Office Partners 360|
As it may look, outsourcing companies do not intend to steal jobs from Americans. It is just that the tradeoff, for businesses, is too good to ignore.
Keep in mind that BPOs are like other businesses too. They function to cater to the demands of specific industries. Whether that is I.T. support or customer service, it will require people and a level of expertise.
Even more so, many foreign employees are hired to help with local marketing, contacts, and breaking language barriers. It is a common strategy to help companies expand and reach new markets.
It is no surprise that in the United States, job outsourcing has sparked a lot of debate.
On the one hand, this common practice helps American businesses cut costs, increase worldwide competitiveness, and deliver reasonably priced goods and services to the global market.
The advantages also extend to outsourced countries. The Business Process Outsourcing industry in the Philippines flourished thanks to U.S. companies. Some Philippines companies have been outsourcing jobs to the U.S., too.
Want to Start Outsourcing Companies in the Philippines?
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Why not with us? We are Magellan Solution, and we provide premier BPO services to SMEs.
You can guarantee the best results with our wide range of services, from lead generation to order-taking services, unwavering focus on quality over quantity, industry discipline, state-of-the-art technology, the pool of talents, and business transparency.
If you want to experience a difference in your business, message us! Our business development team will be with you ASAP.
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