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How Outsourcing Can Help Your Business Survive the COVID-19 Pandemic
Outsourcing During COVID-19-min

Outsourcing During COVID-19: How Outsourcing in the Philippines Can Help Your Business Survive the COVID-19 Pandemic

For years, the business world has never faced a challenge of this intensity. COVID-19 has disrupted virtually every industry across the globe. In addition to the tragic human cost, the United Nations estimates the pandemic will cost the world economy US$1 trillion in 2020

Until the economy recovers, businesses must hang on to the cash they have. Short-term fixes abound, from wage freezes to turning off the lights at night. But to survive long-term, businesses must look for more strategic solutions. Outsourcing offers an economic lifeline by cutting costs, improving efficiency, reducing risk, and allowing business owners to focus on increasing revenue. Not yet fully convinced that outsourcing is a good idea for your business to survive the pandemic? In this article, we list down 6 reasons to help make up your mind.  

#1: Reduce Labor Costs

Labor is a significant expenditure for most businesses. Depending on the industry, salary can consume up to 30% of revenue. A top outsourcing country such as the Philippines can offer qualified employees for a fraction of the price. For example, the average salary of an American software engineer is $105,590 per year. By contrast, the average software engineer in the Philippines earns $8,878 annually, according to Payscale. That’s over a 90% reduction.

#2: Stable Supply of Labor

In response to the coronavirus, many countries have locked down their population. The hours and movement of workers are severely restricted. But in the Philippines, the outsourcing industry is open for business. This sector is an economic powerhouse, generating 9% of GDP. Due to its importance, outsourcing providers are allowed to continue operating during the pandemic. To minimize the workers’ exposure to the virus, employers provide private transport and housing, either onsite or in a nearby hotel. Rather than being stranded at home, Filipino employees are within reach of their workplace, ensuring a stable workforce.

Most outsourcing agencies offer 24/7 scheduling. Business owners determine when employees report to work, regardless of timezone.

#3: Access to Experts

Outsourcing gives smaller companies access to the expertise they may otherwise be unable to afford. Two outsourcing models are typical KPO and BPO:

The software engineer is an example of KPO (Knowledge Process Outsourcing). KPO employees offer expertise in fields such as accounting, finance, healthcare, IT, and design. These tasks are performed by qualified professionals who are willing to work for less. Outsourcing core tasks also allows employers to pay only for the work they need versus taking on another full-time employee.

BPO (Business Process Outsourcing) offers employees that are English-speaking, computer literate, and college-educated a position in an administrative or back-office work function. They are experts in a specific process, such as (but not limited to) customer service, payroll, and data entry. Beyond lower wages, the greater efficiency and accuracy of a highly-trained team can reduce costs even further.

#4: Reduce Capital and Operating Expenses

Business owners that outsource to the Philippines have access to the latest software and technology, without the cost of upgrading their own equipment. They also avoid the price of obsolescence, as technology is constantly changing. Outsourcing IT alone can save a business up to 31% on operating costs. Fewer onsite workers can also reduce ongoing expenses such as rent and utilities. This frees up more capital for revenue-producing activities.

#5: Adapt Quickly to Market Changes 

COVID-19 created a lot of uncertainty in the market. Fortunately, outsourcing offers flexible work contracts. Employers can hire as many (or as few) workers as needed, giving them the ability to scale quickly. If a business needs to reduce their staff, they need not worry about separation pay. Or if the employee isn’t up to standard, they can be replaced without hassle. When a business is ready to expand, they don’t have to spend on training, equipment, or added space. The outsourcing agency has it covered. 

#6: Focus on Core Tasks

Administrative tasks are time-consuming and take attention away from the crisis at hand. Now, more than ever, business owners need to focus on strategy and revenue-generating activities.

Outsourcing non-critical tasks also allows staff to focus on what they do best. According to the Atlantic Magazine, employees spend only 45% of the day on primary job duties. There’s a big discrepancy between employees’ job descriptions and what they actually do at work. Administrative tasks take up the lion share of this lost time. Shifting these peripheral duties to an offshore team allows employees to focus on the job they were hired to do. 

Choose the Right Outsourcing Provider

Outsourcing goes by many names in the Philippines: BPO, KPO, Staff Leasing, or Private Employee Organization (PEO). These agencies offer a wide variety of services and fee structures. Some agencies charge for their recruitment services, while others charge after the successful placement of a candidate. Fees also vary depending on how much infrastructure is required. A fully-serviced office with IT, utilities, office equipment, and administrative staff will come with a higher price tag versus hiring a virtual staff.

Save Money Through Outsourcing

The outbreak of COVID-19 has created financial uncertainty for many businesses. Instead of short-term fixes, outsourcing offers a long-term strategy that can help your company weather the crisis. Almost any task can be outsourced whether administrative or expert. A capable offshore team can cut costs, streamline operations, and allow business owners to focus on generating income.


  • Admin

    InCorp Philippines (Formerly Kittelson and Carpo Consulting) provides consulting and assistance to local and foreign companies starting and doing business in the Philippines. Our main areas of expertise are incorporation, business registration, fda, immigration/visas, payroll, human resources, and recruitment.

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Comments (1)

The best thing about outsourcing jobs to the Philippines is the people. Foreign businesses can simply offshore tasks without worrying whether they’ll get their money’s worth because they will realize how cost-effective it is when you have the right people in place. Even before the pandemic hit, outsourcing has been making it easy for businesses to do business in the Philippines.

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