I’ve Been Hiring in the Philippines for 20 Years… And Still Am!

The six advantages and Disadvantages of Outsourcing to the Philippines Outsourcing to the Philippines has been all the rage for the last 15 years. Before that, everything went to India, all over the world. And since outsourcing to the Philippines has become the place to go, let's talk about the advantages and the disadvantages of outsourcing to the Philippines. So here are the six advantages first and then I'm going to cover them each in detail. Number one, Cost savings. Number two English proficiency. Number three Strong work ethic. Number four Cultural compatibility. Number five, a really wide skill set and educated population. Number six, loyalty and long term stability. So let's get into each of these advantages of outsourcing to the Philippines. Things that might help your business improve and grow and save money. So number one, the number one advantage is cost savings. The labor force in the Philippines is incredibly affordable and for 400 to $1,500 a month you can hire a full time skilled virtual assistant in the Philippines. Now obviously this depends on the role. At $400 a month you're hiring someone who's a total newbie who just graduated from college and doesn't really have any experience and doesn't know anything. Where at $1,500 a month for full time work you can hire a really amazing programmer or a Facebook ads person, people with a lot of skills, or a really talented user interface designer or anything in between, you can hire someone in the Philippines. The wages are super reasonable and are about a tenth of the wages in the US now. The average wage right now is probably 6 to $800 a month for full time work. This roughly translates to 450 to 550 an hour in US dollars. So the cost savings from US wages is pretty significant. And if you're hiring multiple people, the cost savings really add up. Especially as you hire an ENT from the Philippines where you can hire a web person and a graphic designer and a content writer and customer support people. The savings for your business really grow as you do this and you hire talented people. So the second advantage of the Philippines is English proficiency. English is an official language of the Philippines. Yeah, there are two official languages, Tagalog and English. The Philippines has over 7,000 islands and there are over 128 languages in the Philippines. That doesn't count, just different dialects. So if you're from this island and you want to travel to this island and you don't speak that same language, you can't communicate with each other. It would be like being in the US and traveling from Los Angeles to New York and not being able to communicate at all. So years ago, the government recognized, well, we have this problem. And then also the future is in speaking English. So we're going to make English an official language of the Philippines. They actually called it the official language of business in the Philippines. So now they teach elementary school in English. They start teaching kids English very, very young, so that as they get older, they speak English. Now, not everybody in the Philippines speaks English, but the majority of people do. And it goes deeper than that. Communication with someone you're outsourcing with in the Philippines is super smooth and easy because they watch American TV and American movies. They watch British tv, they watch the NBA. The Philippines English is culturally very West Westernized. They'll speak American slang or British slang, they'll understand it. You're very unlikely to have a communications problem with someone in the Philippines that you're outsourcing to. Number three, the strong work ethic. So the Philippines culturally, is a very hardworking and pleasing culture. They want to make you happy, and that's why you so often see them working in service roles, like they're working on a cruise ship or as a waiter or as a nurse or as a caretaker. Filipinos are very caring. They want to make people happy. And in addition, they take pride in their work, like they. They recognize it reflects on the Philippines, on their culture, on their home. And so they're very hardworking, and they really are eager to please. And that makes a situation where they're willing to go above and beyond what you ask to do really good work to make you happy. This strong work ethic often delivers really amazing results. Now, this isn't always going to happen, but if you do things to gain their trust so that they trust you as a boss, as an outsourcing partner, they're very likely to go above and beyond to deliver amazing quality work. Number four advantage of outsourcing to the Philippines is cultural compatibility. The Philippines is very Westernized as a culture, so while they're in Southeast Asia, they don't generally identify with the culture of Southeast Asia. Typically, you would think of Malaysia or Singapore. The Philippines, the two national sports of the Philippines are boxing and basketball. They love Dancing with the Stars. They read American novels. The Philippines was a US territory for a number of years after World War II, where the US rescued them from Japan and then helped them set up their own government with that. They actually like foreign bosses, which is different than most of the rest of the world right now. Or if you go to India, where they'll talk about, oh my stupid American boss in the Philippines. They'll actually brag about their American boss to their friends on Friday night. Having a foreign boss in the Philippines actually elevates your social status. That makes them much more likely to want to work with you rather than work against you. In addition, Filipinos are polite and they adapt well to foreign work environments. So while they may be shy and you may be really overbearing and brash, they'll adapt well to that. Often they think we're too straightforward and direct, and yet they still manage to work with it. Culturally, yes, there are some things you need to learn if you're outsourcing to the Philippines, but generally the culture is super compatible and it makes this very easy. The number five advantage to outsourcing to the Philippines is a very wide skill set and highly educated workforce. The population of the Philippines is over 100 million. So you know, there's a really big workforce and then they're very well educated. Higher education is really valued in the Philippines. So most of the people you're going to find are going to have a college degree, an actual university degree, like after high school, four years of university education, which then leads into a very highly skilled workforce. Now, this wasn't always the case, but about 15 years ago the government of the Philippines recognized, oh, the future of bringing money into the Philippines is working online and the outsourcing that's happening. And so they really leaned in to educating the workforce towards work that could be done online, towards bookkeeping, accounting, programming, design, content writing. They really leaned in to these types of roles. And so today we find really great customer support people or really great social media people or SEO or video editing or audio editing or podcasting. We find really, really talented people at all of these things in addition to customer support or programming or WordPress or lead generation. Because of the talented workforce you can find really high end people and really low end people where on the other end of the spectrum you can find really talented sales copywriters or e commerce experts, or people who understand pay per click and media buying really, really well. In addition, there are really highly educated and experienced specialty fields like virtual assistants for real estate or iOS developers, or calling sales reps or project managers. The depth and breadth of talent that you could find because of the education that exists in the Philippines is really great. So this allows you to find really talented people that you can outsource things to in your business. The number six advantage of outsourcing to the Philippines is long term stability. Turnover sucks. It Sucks the life out of a business and especially out of a small business owner. And one of the great cultural things about the Philippines and is their loyalty to their job. They really value long term, steady work. They're not entrepreneurial so they don't want to steal your business which makes for hiring steady, long term, educated, talented people that want to stick with you and your business. Now when you're outsourcing as a small business owner, that lack of turnover means everything for me in my business. I'll just give a couple examples. The first person I ever hired in 2005 still works for me today. Yeah, that's 20 plus years. And when I hired him in 2005, he wasn't great, he didn't know very much. Today he's an expert at all kinds of things and is managing a really big business for me. I have a programmer that works for me today that I hired in 2007. Now when I hired him, he was a really good programmer. Today he's a spectacular programmer and he knows and understands everything about our systems because he helped build it from the ground up. Now when you build a business with people in it, with that kind of loyalty and long term stability as business owner, everything becomes easier because you have people that you can rely on that you know are going to stick around. My current video editor and graphic designer has been with me for I think eight years now and he's improved consistently over that time. And not only has he improved consistently over that time, he's improved our processes and made my work better over that time. He comes to me with ideas and thoughts and ways to improve what we're doing. When you get this kind of stability over a long period of time as a business owner, it makes running things so much easier. There are fewer things to think about and more ways to hand over processes to people in the Philippines who you're outsourcing to. One time, one of my people in the Philippines was transitioning into a customer facing role and I told them, hey look, you're going to start getting contacted by employers offering you a job and I just want you to pay attention to how I have employed you over the years. Their response to me was, oh, don't worry sir, I already get job offers every day from other employers. I'm not going anywhere. That long term stability is part of the culture in the Philippines. They're very loyal, they want to stick with you long term. Now the number seven advantage is one that I didn't mention in the beginning, but it's the ease with which you can find these people. In 2005 when I started doing this, it was really hard to find talented people. You had to go through an agency and they were limited with who they could bring into their office and to their local pool. Today, today you can use a job board in the Philippines with over 3 million profiles on it that it makes it really easy to get in instant contact with almost anybody of any skill set of any type of role that you want. The best of those job boards is onlinejobs ph. It's specifically for the Philippines. It's very affordable to use. They don't take a cut or a markup of the salaries that you're paying people. All the money goes directly to that person. And finding these people is really, really easy at onlinejobs.ph. so that wraps up the advantages for this video. Now let's talk about the disadvantages of outsourcing to the Philippines so that you can make an educated decision if this is the right thing for you. I actually didn't come up with six disadvantages of outsourcing to the Philippines. I came up with five. The five disadvantages are, number one, the time zone difference. Number two, Internet and power reliability. Number three, cultural sensitivities. Number four, training and management. Number five, holidays and family commitments. So let's talk through these disadvantages of outsourcing to the Philippines. Number one. Number one is time zone differences. So the Philippines is 12 to 15 hours ahead of the U.S. so that means if it's 1 o' clock in the afternoon in the U.S. it's 4 o' clock in the morning in the Philippines. If you're in the UK they're eight hours ahead and if you're in Australia, it's only a two hour time difference. So if you're in the US that 12 to 15 hour time difference could be a big deal. It makes collaboration difficult. I typically only get an hour or two online throughout my workday which coincides with their workday. So at my morning time I'm usually going to only find people who prefer to work at night online during my morning and during my afternoon I'm going to find early morning people in the Philippines. Rarely will I get a whole bunch of people online at the same time. Now this is because I allow all of my people to work at whatever time they choose to work so that I don't force them to work the night shift, which you can do. You can force people to work the night shift in order to accommodate for your time zone. Just recognize that night shifts are hard even in the Philippines, it's hard, however, with when presented with the opportunity to have a job working online for a foreign boss, they're usually willing to work the night shift. For me, what I find is that I actually like the time difference because it means I don't have people interrupting me during my workday. During my day, I make assignments to people in the Philippines when I sleep at night, they do the work. If there are questions, usually I can catch them online either before I go to bed or in the morning when I wake up so that I can answer questions and have them still complete the work. But otherwise, during my day, I don't have very many interruptions from people wanting my time, which makes my time very effective when I'm working. This is one of the ways I only work about 15 hours a week is because I don't have people on my team demanding my time during the day. My working time is super effective. Their working time is effective on their time, and that time zone difference works out for me. Now, that's not the same thing for everybody in your business. You might need them to be online at your time, and that's something you're going to have to negotiate with them. So that would be the first disadvantage of working with the Philippines. The second disadvantage is Internet and power reliability. When I started doing this, the Internet went out all the time, as did power outages. In fact, in most places in the Philippines, they used to have. They would call it rolling brown out because the infrastructure of the Philippines couldn't supply enough power for the demand. Same thing with the Internet. It just wasn't very good. In the last 10 years though, that has really changed a lot. Where I have people on my team that have 400Mbps Internet, which is faster than a lot of people I know in the US the reliability has also improved significantly. And wireless Internet in the Philippines is very common. And so often people will use it as a backup. They'll have a wired Internet connection in their house and they'll have a prepaid backup plan for if the wired Internet goes down, they have a backup plan. That backup plan typically isn't as fast or as good as the wired one, but at least it keeps them online. So when I started outsourcing to the Philippines, power and Internet outages were a common problem. I rarely see them anymore, but it is something you should be aware of if you're going to outsource there. The number three disadvantage of outsourcing to the Philippines is cultural sensitivities. Filipinos call Themselves shy. And what it really is is they tend to want to save face. So if there's a situation in which they might feel embarrassed or let down, or where they might feel like they're letting you down, or where they might feel like they didn't do it right, their natural reaction is to back away and disappear. In order to prevent this, you'll need to create a situation where they trust you. You have to gain their trust. To gain their trust, you have to do some things. You have to provide feedback, you have to provide training. You need to be a good boss. You can't just yell at people. This cultural sensitivity can definitely lead to problems if you're unaware of it. If you're prepared for it though, and you're ready to treat someone like they're a human and they're a valued team member, it shouldn't be a problem for you. So the number four disadvantage is training and management. So while you can find highly talented, skilled, experienced people in the Philippines, training is still a part of the culture. When someone starts a job in the Philippines, they expect on the job training. In fact, it's so prevalent that the government has an acronym for it, OJT on the job Training. And for a lot of people, this just might mean bringing them into your company. It might mean providing them the knowledge and the resources that they need inside of your company to be effective at the job. So while yes, you're outsourcing, you might still have to provide them details and knowledge of internal things in your company. If you're hiring a beginner, the likelihood of needing to provide very detailed training is high. Well, Filipinos are very willing to think and they're willing to read between the lines. So the more new someone is or the more beginner someone is, or the less expectations that are clear, the the more detailed instructions are needed for you to succeed with this kind of a person. They're definitely thinkers and they're willing to read between the lines. They're willing to say, oh, he gave me this instruction and this instruction, but missed an instruction here and then continued. And I think this missing instruction is. And they'll try and solve that instruction where other cultures will just get completely stopped. In the Philippines, they want to think through the process. However, more detailed instruction will definitely be better in the beginning. Up front, this requires more effort, but long run it pays off so much. Especially when you consider how loyal and long term stable they are. The more training you're willing to provide in the beginning, the more times it'll pay off over the years in experience and trust and knowledge of that person with your business. The number five disadvantage of outsourcing the Philippines is holidays and family commitments. The Philippines has a lot of holidays. They recognize that they have a lot of holidays, significantly more holidays than the US has. If we look at the number of holidays in the U.S. i think it's 12 national holidays per year and the Philippines has like 22 now. The Philippines government recognizes this. They also recognize the number of people in the Philippines that are working for foreign employers and how those holidays can cause problems and they're cutting down on those holidays each year. The Philippines also recognizes other countries holidays. Every time Thanksgiving comes, I get a message from people on my team saying Happy Thanksgiving despite them not celebrating Thanksgiving at all. So the holiday differences is something you need to be aware of. Also recognize there's going to be days when you will work that they will take off because it's a Philippines specific holiday. Their Independence Day isn't on your Independence Day. At the same time, they're probably going to work on the fourth of July. When it's a holiday for you, it's not a holiday. Then along with holidays, you have family commitments. Family is very heavily valued in the Philippines. In fact, family is more important than work. If people have a conflict between family and work and they don't feel like that conflict can be resolved, they're most likely to choose family overwork. I've actually seen quite a few people quit jobs because they had a family commitment and they didn't think their boss was going to allow them to participate in their family commitment. So as you outsource to the Philippines, recognize you need to accommodate for family and holidays. If you're willing to do this, they're very likely be willing to work when you need them to to go above and beyond what you need. One last thing about family and holidays is that especially during the time from Christmas to New Year's, Filipinos very often have a lot of family commitments. So if that is your biggest, most important time of the year, especially if you're in an E commerce business, just recognize that when you hire them, you must let them know, hey, I'm going to need you at this time because of the nature of our business, I can't have you disappearing at this time to go with your family. Are you okay with that? It's a conversation to have right up front so that it doesn't cause a problem later on. This is one of the disadvantages of the Philippines where they have a different holiday schedule and different family priorities than you do probably, but it can easily be worked through. Overall in outsourcing to the Philippines the advantages far outweigh the disadvantages and this is why we're seeing the world's outsourcing go to the Philippines and away from India and we've been seeing it for the last 15 years. Yes it's really important in the Philippines that you gain their trust that you do things to show that you care about them and their work and their success. But if you're willing to do that you're very likely to have a positive experience hiring really talented people at really affordable rates who are very loyal in the Philippines. If you like this, check out my other videos about outsourcing to the Philippines and hiring virtual assistants in the Philippines. Also, onlinejobs PH makes it super easy to find and hire for any role that you want in the Philippines and any skill set, any skill level from super high end to low end and anywhere in between. Check it out onlinejobs Phone.