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Philippines Outsourcing: Guide to doing it right

Are you thinking about outsourcing to the Philippines? If yes, this article will give you all of the information you need to know about outsourcing successfully.

Some of the things you'll learn:

  • Why outsource to the Philippines?
  • Who outsources to the Philippines?
  • How much does it cost to outsource to the Philippines?
  • The difference between a virtual assistant and a virtual staff
  • Key things to remember when you hire your first virtual staff in the Philippines
  • Hiring part-time vs hiring full-time: The Philippines outsourcing dilemma
  • Outsourcing to the Philippines vs Outsourcing to Latin America
  • Outsourcing Staffing: Your options to outsource in the Philippines

The "Outsourcing Philippines: Guide to doing it right" will cover absolutely everything you need to know. It'll dispel the myths, it'll uncover the BS, and it'll most importantly arm you with the knowledge and information to make an informed decision.

While outsourcing to the Philippines will save you a lot of money, regardless of how you do it, like any industry, there is always some cowboys lurking around the corner, often inflating prices for them to cream a bunch of money off the top.

This Philippines outsourcing guide will dispel all of that. It will open your eyes, and you'll be able to see things for what they are.

Why outsource to the Philippines?

There are many reasons why outsourcing in the Philippines is an excellent thing to do, and it's certainly not coincidental that gigantic companies such as Goldman Sachs, Barclays Bank, WhatsApp, Disney, Sky, and other business behemoths decide Philippines outsourcing is the way to go.

Here are just a few reasons why it makes excellent business sense to do it:

You'll save a lot of money

I'm sure you already know, but you can save thousands of dollars per year per employee by outsourcing to the Philippines. You're looking at 70-80% savings in salary costs.

Here's an example:

The national average for a customer support rep in the USA is $28,821 per year, and on top of that, if you hire locally, you have benefits and other stuff to add on top, so let's call it $32k per year.

Now, if you hired a great customer support rep in the Philippines, you could potentially pay between $550-$850/month and immediately save as much as 70-80% on salary costs.

Salary savings compound!

The savings you get from Philippine outsourcing compound in several ways. Both of those ways result in more net income for you and your business.

  1. Every day, every week, every month, and every year you are saving money and increasing your profits by reducing your costs without compromising productivity in any way whatsoever.

    This is exactly why the biggest and most profitable companies in the world have done it for years!

    Did you know, Disney outsources to the Philippines? They hire animators in the Philippines to create "new mice" and other things that Disney do!
  2. The more staff you replace, or the more staff you hire, the more money you save because the savings compound and multiply.

    For example, you hire 50 customer support reps instead of hiring 50 locally. What happens?

    Let's look at the numbers to give you something concrete. Let's imagine you paid the customer support reps a very attractive Philippines salary of $800/month, you want to hire good quality staff.
Here's the math!

USA: You hire 50 staff and pay them $28,821/year, which works out at $2401.75/month; let's call it $2400/month for simplicity, and let's also FORGET about benefits other state-specific employment expenses.

50 staff x $2400 = $120,000/month in salary expenses ($1,440,000 per year!)

Philippines Outsourcing: You hire 50 staff of comparable quality. The staff is all degree educated, and they've all got customer support experience. You decide to pay the staff $800/month, an excellent salary for a customer support rep in the Philippines.

50 staff x $800 = $40,000/month in salary expenses. ($480,000 per year)

You've just saved yourself $920,000 in expenses over the next 12 months! And that money you've just saved goes straight to your net income and into your metaphorical pocket.

If you're new to Philippines outsourcing or want someone to recruit, monitor, and guarantee your virtual staff is working, check out the Philippines Outsourcing enterprise service.

VirtualStaff.ph: Enterprise Solution.

English is the official language of the Philippines

The Philippines has two official languages, Filipino (Tagalog) and English, and the reason for that is because the Philippines was a former colony of the USA!

I'll explain below with some fun facts that will help give you a fast-track course in "why outsource to the Philippines if you need English speaking staff and want to save a lot of money on salary costs."

  • Degrees in the Philippines are tested in English. All written exams are in English.
  • If you go to the cinema in the Philippines, virtually every movie is in English, and there are no subtitles.
  • English is the joint official language. This means all road signs, official documents, and even the constitution itself is written in English.
  • The Philippines was one of the few countries in the world to have been a colony of the USA. (1898-1946), this came about because the USA bought the Philippines from Spain.
  • The Philippines are named after King Philip II of Spain. (It was a Spanish colony from 1521-1898

That's a quick overview of why the Philippines is the leading outsourcing destination in the world.

Unfortunately, Spanish has not been spoken in the Philippines for decades now, which means if you need to outsource and hire Spanish-speaking staff, then Latin America is probably a better option for you.

I'll briefly touch base on outsourcing to Latin America later in the article.


Who outsources to the Philippines?

I could write a list longer than the one Santa Clause receives every Christmas! You'd be amazed, but pretty much all the leading and most prominent companies in the world outsource their business processing to either the Philippines or India.

I'll list some of the largest companies, including quite a few who use the VirtualStaff.ph Philippines outsourcing marketplace to find and hire their outsourced staff.

  • Google
  • Amazon
  • AT&T
  • Canva (I consulted for them)
  • Citi
  • Barclays Bank
  • WhatsApp
  • Goldman Sachs
  • Alibaba
  • Basecamp
  • TransferWise (Wise)
  • Skype
  • Slack

On top of those industry giants, there are also thousands of innovative small and medium-sized businesses worldwide who've experienced the benefits of outsourcing to the Philippines.

You'd be amazed how many successful Amazon sellers, digital marketing companies, e-commerce stores, SAAS businesses, even realtors, accountancy firms, law firms (hiring paralegals) all outsource to the Philippines to boost their profits.

I know this because VirtualStaff.ph has had thousands of businesses use our outsourcing marketplace.

There's an excellent video and article that explains how entrepreneurs and virtual assistants benefit each other. Although the video and article specify "virtual assistant," it covers the whole concept of Philippines outsourcing in general.


How much does it cost to outsource to the Philippines?

It should cost you between $500-$1500/month depending on the type of staff you hire; obviously, someone such as a full-stack developer or senior accountant will cost more than a general virtual assistant or customer support rep.

Salary rates 2021 for hiring Virtual Staff in the Philippines
(ball-park full-time rates/160 hours per month)

The average salary ranges listed below are based on our data of over 200,000+ Filipino workers registered on the VirtualStaff.ph Philippines outsourcing marketplace. I've listed some of the most popular positions.

  • General Virtual Assistant: $500-$750/month
  • Content Writer/Article Writer: $500-$900/month (depends on experience and quality)
  • SEO Specialist: $500-$1200/month
  • Digital Marketing: $500-$1500/month
  • Front-end web developer: $500-$1200/month
  • Back-end web developer: $500-$1500/month
  • Full-Stack web developer: $800-$2,000/month
  • Graphic Designer: $550-$850/month
  • Video Editor: $500-$900/month
  • Data Entry: $350-$550/month
  • Amazon VA (Amazon virtual assistant): $450-$750/month
  • Bookkeeper: $400-$700/month
  • Accountant (CPA): $550-$1500/month
  • Customer Service: $500-$700/month
  • Telemarketer: $500-$800/month

Part-time workers generally get paid 50% of the above indicative monthly salary rates.

The rates above are simply a guideline based on the averages of the hundreds of thousands of virtual assistants and remote workers registered on our outsourcing marketplace.

However, each individual sets their expected salary, and you can see them by simply going to VirtualStaff.ph and clicking on user profiles.

If, for example, you're looking to outsource animation by hiring a Filipino animator, and that person has experience working with Disney, or some big firm such as that, their asking salary will be a lot higher than a fresh grad with minimal work experience.

You can download a free copy of the e-book, "Virtual Staff Salary Guide: How much to pay your virtual staff."

The difference between a virtual assistant and a virtual staff

You must understand the difference between a VA and a virtual staff. Unfortunately, because many people think all virtual workers in the Philippines are virtual assistants or VA’s, it's created confusion among many entrepreneurs looking to outsource to the Philippines.

I've added an image below that will clearly show you the differences between a Filipino virtual assistant and a remote worker in the Philippines to make it easy.

If you are looking to hire a virtual assistant, you can also read our article, "Hire a Virtual Assistant - avoid hiring a bad VA."

Key things to remember when you hire your first virtual staff in the Philippines

If you said, "let's hire a virtual assistant," or let's "hire virtual workers" and outsource in the Philippines, I'd be the first to tell you that it's a great decision.

Do it right, and you go about Philippines outsourcing in the right way. It'll probably end up being one of the best things you do for your business in terms of not only increasing profits through cost reduction but also the massive increase you'll get in productivity by adding more workforce to your business.

But here’s where many entrepreneurs and business owners go wrong. Treat your virtual assistant or virtual staff like you would treat a local employee with respect!

The difference between local employees and remote staff in the Philippines is the enormous cost savings. Asides from this, treat it the same.

If you're looking to hire a virtual assistant, I'd suggest reading the article "Hire Virtual Assistants: The Ultimate Short Guide."

Hiring part-time vs full-time vs freelancers: The Philippines outsourcing dilemma

As a business owner looking to outsource to the Philipines, you have the choice to hire part-time, full-time, or even per project freelancers.

Which option is best depends on what you're looking to achieve with your outsourcing goals; all the options have their advantages and disadvantages.

Each option ultimately has its place as part of your overall outsourcing strategy. I'll be breaking it down for you and explain under which circumstances each option is best for what you might need.

Hiring part-time virtual staff:

Theirs several types of businesses and entrepreneurs who'll benefit from hiring part-time virtual staff instead of full-time, and it's not just the side hustler who can benefit from having a part-time virtual assistant.

The sider hustler entrepreneur

Maybe you have a 9-5 job, and you're trying to build your business on the side so that eventually you can earn enough money to quit your job and get back to controlling what you make and what you do with your time?

Most commonly, but not limited to, side hustles might include running an e-commerce start-up, Amazon FBA business, digital marketing services. Content websites, or even something such as affiliate marketing.

If you're working full-time in a regular job, it can get overwhelming trying to build your side business simultaneously. And that's why outsourcing to the Philippines and hiring a part-time virtual assistant might be an excellent idea for you.

Advantages
  1. You can leverage time, without giving up your regular job salary.
  2. You can hire somebody with skils you don't have. For example, let's imagine you're starting a YouTube chanel, or a content marketing website. You could hire a part-time video editor/graphic designer to handle all of that for you.
  3. You reduce your cost commitment.
Disadvantages
  1. Whenever you hire someone part-time, you do so with the usual expectation that they are also working another job, or perhaps studying in further education. This can of course create divided focus, or potentially effect how long the staff stay with you.

    For example, they may take the part-time job, while they're actively looking for a full-time position. The solution for this is to simply ask them, and be upfront with your concerns during the interview.
  2. Hiring part-time staff is not the best thing to do if you're looking to build a long-term virtual team. I always find that it's significantly more effective if you can afford to just hire people full-time, that way you can really focus on creating a great team, and promoting your company culture.

Hiring full-time virtual staff in the Philippines:

If you can afford to, then I highly recommend primarily hiring full-time virtual staff. It's by far the most effective way to build an outsourced team in the Philippines.

The business that will benefit most from hiring full-time is the business that is looking at this from a long-term perspective.

When I started outsourcing to the Philippines, I already had an established business. I wanted to build an outsourced team in the Philippines to save money without compromising quality. This meant more profit due to reduced costs.

From day 1, I was looking at outsourcing with a long-term goal. I knew that for it to work big time and get me the kind of compounded savings that I wanted to have, I had to look at how I could build a viable virtual team that would be with me in years to come.

Who will benefit from having full-time virtual assistants or remote staff in the Philippines?

  • Established busineses looking to replace local employees to dramatically reduce costs, by hiring virtual staff in the Philippines. Remember, the more staff you replace, the more you save. It's really just like compound interest... except it's compound savings! (As long as you replace local employees with equally skilled staff.)
  • Realtors/Mortgage Brokers (other single person self employed professions): By hiring a full-time real estate virtual assistant you can outsource all the grunt work. In fact, you can have them take over your admin, social media, follow ups, basic graphics, and all the other stuff that you'd be better of not doing!
  • Online businesses: Including e-commerce, FBA, digital agencies, content creators, YouTubers, and other online businesses. You could hire anyone from a graphic designer, social media marketer, content writer, virtual assistant, admin/support, customer service, WordPress designer, bookkeeper, the possibilies are limitless.

Those are just examples of businesses that will usually benefit more by hiring full-time virtual staff. Of course, it's not limited only to those examples, and if I did not list your specific industry or type of business, don't worry.

Advantages
  1. You can directly replace full-time local employees with virtual staff in the Philippines and immediately benefit from an increase in profits due to a huge decrease in cost.
  2. Hiring full-time virtual staff or VA's let's you assimulate them into your company culture more effectively.
  3. It creates more leverage. By this, I mean if someone has two-three part-time jobs, they might not necessarily put the effort in that someone with one full-time job will.
  4. It's perfect for long-term. The last thing you want is to churn and burn staff, as it takes up time and energy.

Disadvantage
  1. If you're only a start-up one person operation, and you currently only have a business as a side hustle alongside a 9-5 job, then maybe the cost of hiring full-time might be to much.

    Even though you're saving a fortune compared to hiring locally. If your side hustle only makes you $1k-$2k per month, then it would probably not make sense to hire someopne full-time, even if that virtual staff only cost you $500-$600 per month.

    In this case, I'd advise you to probably look to start by hiring someone part-time, that way you're not overstretching, while at the same time you can still outsource to someone to either do the stuff you hate doing, or the stuff that you are not very good at.

Freelancers (project based)

This is best if you want to hire a team to build something as a one-off thing. The best example would be creating an app or a piece of software or something.

Hiring freelancers or developer teams can be good for one-off projects. However, asides from that, I'd advise avoiding it as you'll likely pay significantly more per hour, in addition to working with someone who sees's you as a client instead of an employer or boss.

Advantages
  1. Great idea for one-off projects, such as building some software or an app. (I suggest you agree fixed price, never hourly if it's something such as this).
Disadvantages
  1. Much higher cost. In fact, you might pay a freelancer in the Philippines double, or even treble what you'd pay to hire someone part-time of full-time as a virtual staff.
  2. They treat you as a client. You are a client. I personally think if you're looking to build a long-term, and turnkey outsourcing system, then you need to have your staff treat you as the boss, or the employer. Not one of 10-20 clients.
  3. It's not an effective way to replace local employees.

My overall advice on part-time, full-time, and freelancers?

I believe that in most cases, if you can afford to, always hire full-time virtual staff. It's simply the best way to build a long-term team and get the compounded savings that you're looking for.

However, I would tell you to incorporate part-time virtual staff and freelancers into your overall outsourcing strategy.


Outsourcing to the Philippines vs Outsourcing to Latin America

First of all, let me say that I don't personally have experience outsourcing to Latin America. My background is grounded in Philippines outsourcing; I've made my fortune and built businesses by leveraging exclusively outsourced staff in the Philippines.

However, as I said earlier, for a lot of businesses, the hybrid solution works best. Hire locally and combine it with outsourced staff in the Philippines.

So why did I mention outsourcing to Latin America? Simply because I assume it would be a good option if you're looking to hire Spanish-speaking staff.

Despite the Philippines being a Spanish colony from 1521 to 1898, the USA took over the Philippines until the 1940s. During that time, Filipino's lost much of the Spanish language and cultural influence in the Philippines.

The Philippines is unique in being one, if not the only former Spanish colony that does not have Spanish as an official language.

So, I'm just throwing out the Latin America thing as a possible idea for those of you who also need Spanish-speaking staff.

However, suppose you want English-speaking virtual staff. In that case, outsourcing to the Philippines is a better idea, as English is the standard official language of the Philippines, unlike countries in Latin America such as Colombia and Mexico etc.




Building a Virtual Team: Your options to outsource in the Philippines

There are many options for outsourcing to the Philippines. Most Philippines BPO providers use the VirtualStaff.ph outsourcing marketplace to find and hire virtual workers before assigning them to their clients (you) with a markup.

If you want to go straight to the source, the easiest thing to do would be to create a free VirtualStaff.ph employer account and immediately begin posting jobs and hiring remote staff.

On VirtualStaff.ph, we have a professional enterprise service that gives you all the benefits that other Philippines outsourcing providers offer without higher costs.

Again, the reason we can provide the most cost-effective enterprise service in the Philippines comes down to the fact that we are the Philippines outsourcing marketplace.

VirtualStaff.ph is where most outsourcing providers come to do their internal hiring before assigning the virtual staff to work for you.

You can cut them out and go directly to the source by creating a VirtualStaff.ph employer account.

VirtualStaff.ph: The DIY option

The first option would be to "do it yourself," using our DIY solution, you can post jobs and choose from thousands of virtual staff registered on the virtual staff Philippines outsourcing marketplace.

Getting started is incredibly easy!

VirtualStaff.ph: The Enterprise Solution

Not everyone wants to "DIY"; in fact, we find some businesses looking to outsource to the Philippines want to have the help and support of a professional outsourcing provider to take care of everything for them. If that sounds like you, then I'd suggest that you go with our enterprise solution.

If you'd like me and my team to help you professionally build your virtual team in the Philipines, you can learn more about it by clicking the link below.

Professionally Outsource to the Philippines

If you've got some value from this outsourcing guide, and you'd like to learn more about hiring virtual assistants, or outsourcing to the Philipines, then check out the articles and videos below:

Feather Pen

By: Michael Brodie

Helping make outsourcing to the Philippines easy for everyone. Michael is the Founder of VirtualStaff.ph - "The Philippines Outsourcing Marketplace".