Business Process Outsourcing (BPO) in the Philippines
As technology continues to rise and grow at a rapidly changing speed, communication and operations across different parts of the world have been crucial to upholding the excellence and efficiency of an industry. To fulfill the rising demand in operations due to this, a business practice known as BPO was supplied into existence. What is a BPO company?
What is a BPO?
BPO stands for business process outsourcing. The term “outsourcing” is said to come from the phrase “outside resourcing” since the industry involves hiring from different foreign, local, nearshore, and offshore industries. More than being an industry that helps companies reduce costs, BPO also allows for a globalized workflow that connects data and humans closer together.
Business process outsourcing is the process or business practice in which a company subcontracts different business-related operations to be managed by a party not within the company. BPO’s simple meaning can be looked at in this perspective: rooted in the manufacturing industry, organizations utilized the practice of contracting other companies to fulfill services needed to produce customer support and service.
What Types of Services Does BPO Support?
The business process outsourcing industry is known for offering different types of services that enhance the growth of a business through adept management, innovative operations, and efficient work. What is a BPO vendor is also a common question among those looking to contact business process outsourcing companies, as BPOs provide their services for a cost-efficient price.
Here are some types of services that business process outsourcing companies support:
IT-BPO
IT-BPO means Information Technology-Business Process Outsourcing. As the world continues to modernize, technology continues to advance and develop trends. Technology work such as cloud computing, business analytics software, data privacy management, social media operations, and process automation programs are now services offered in the business process outsourcing industry. This is to cut down on costs and ensure higher efficiency for operations of the company, mainly focusing on technology and information.
KPO - Knowledge Process Outsourcing
Knowledge process outsourcing is the outsourcing of fundamental information-based business operations that are essential to the company’s value chain. The skills demanded are the industry’s best level analytical and technical skills, as well as specialist expertise. These allow a company’s operations to increase revenue and maintain the best competitive edge through having many skilled professionals in information-intensive operations.
LPO - Legal Process Outsourcing
Legal process outsourcing or legal outsourcing is the action of a law firm or corporation hiring legal support from other law firms or legal support services providers. Workers from the LPO industry fulfill the role of handling several clients’ data to cater to more cases and gaining the best contact links in the legal industry through the cost-efficient medium of outsourcing.
Travel
Travel business process outsourcing is the delegation of tasks in relation to a company’s travel-related business practices to a third-party consultant company. Conducting this kind of outsourcing allows for efficient cost savings and high-quality customer experiences.
Why the Philippines is a Top BPO destination?
BPO companies are one of the fastest-rising industries in the country, as the nation continues to provide technology-literate individuals who provide BPO services.
In the Philippines, BPO is defined as the allocation of service-type work processes to a third-party service provider. Following this, BPO Philippines sectors are categorized as such:
Philippines VS International BPOs
Since Filipinos are well-known for their excellent English language speaking skills, being the third largest English speaking country in the world, the BPO workforce in the country is a developed industry. On the other hand, other countries are yet to be up to par with the standard set by Filipinos in terms of being a proficient offshore English speakers.
Moreover, the rate of fresh graduates in the IT, technology, marketing, and administrative areas are also in abundance in the Philippines. At the same time, other countries produce more STEM-intensive fresh graduates, showing little demographic for eligible BPO employees.
Lastly, the Filipino culture is known for its hospitality, which allows foreign investors to conduct their business here, welcomed with warmth. Meanwhile, other countries are known for their formality and straightforward attitudes, which show a less positive impact in the management of customer services.
Showing a positive growth rate throughout the years, the BPO industry in the Philippines is continually supported and improved in order to nurture its development.
Advantages and Disadvantages of BPO
Advantages
- Career advancement
BPO employees are trained to be well-rounded, flexible workers who are always on the go. Once regularized, BPO employees can easily rank up to supervisory, managerial, and other support roles that fit their skill set and work history.
- Higher earnings
As career advancement promises higher earnings, the BPO industry is a place for growth as you see your earnings heighten as your roles advance. For many years, the BPO industry produced successful employee stories.
- Higher employment rate
Fresh graduates stand a bigger chance in the BPO industry because companies are always on the lookout for young professionals with a large skill set. There are also several BPO opportunities because of the advancement of technology and digital platforms.
Disadvantages
- Working hours
Unfortunately, working in the BPO industry comes with the issue of odd working hours. Many have to adapt to night shifts, especially those in offshore outsourcing. Sometimes, BPO workers have to work around the clock to meet quotas.
- Health issues
BPO workers also encounter several health issues throughout their career due to lack of physical exercise in their working hours leading to heart disease and depression. It may also damage their eyesight, posture, and sleeping schedule as working hours are often late and constricted in a small, enclosed space.
- Communication problems
There are also a lot of issues in terms of handling clients. For example, encountering data privacy issues may set you up for a lot of customer aggression that you have to calmly deal with. A great downside of working in the BPO industry is the stress it comes with.
Most Outsourced BPO Jobs
Accounting
Outsourced accounting services provide companies with cost-efficient, high quality and value work, and mitigate the risk of complications in routine tasks.
Customer Service Agents
Customer service outsourcing allows employers to lessen the costs of paying a fixed salary and offering benefits such as healthcare, overtime costs, and transportation. Other countries are also well-equipped with hospitable workers such as Filipinos.
Data Entry
Outsourcing data entry jobs allow the company to focus on core responsibilities and business practices like finance, operations, and marketing, as a third-party service provider handles data management.
Graphic Design
Graphic design outsourcing allows the company to get great design at a lower cost and allow the permanent creative team to focus on bigger design projects.
Web Development/Web Design
Hiring an in-house team of web developers and designers is very costly, which is why it would help you cut down on costs to outsource web developers and/or web designers.
Staff Leasing VS. BPO Model
Recruitment
BPO: The BPO team’s resources are re-purposed, and because of this, they may still need to end up hiring new talent to meet client needs.
KMC Staff Leasing: The recruitment needs come directly from the client, so the candidate hired is exactly what the client is looking for.
Timeframe
BPO: BPOs usually have a month of preparation before recruitment. The BPO provider takes a longer time to prepare since the preparation needs to be consulted from the adviser.
KMC Staff Leasing: Internal KMC SLAs guarantee the fastest hiring; 30 days for non-technical talent/ 45 days for technical talent. They start the recruitment process right away after consultation with the client.
Visibility
BPO: Client company has limited or mostly no visibility on employee qualifications/ background.
KMC Staff Leasing: Recruitment is a collaborative process with KMC, with clients being given full visibility of candidate profiles from the sourcing process all the way to the final interview.
Co-management & Control
BPO: The management is fully outsourced as well, so there is no direct visibility on BPO team performance and the client has limited access to the employees.
KMC Staff Leasing: The staff leasing provider and client both co-manage the employees, with client still getting the final say on important decisions and core responsibilities.
Cost & Billing Model
BPO: Employees are billed on an hourly or fixed FTE rate, with the client getting limited visibility on the cost breakdown or employee salaries.
KMC Staff Leasing: KMC Staff Leasing service has a transparent pricing model, with flat fees for monthly HR & Payroll, Data, and Facilities. The client’s employee salaries are also transparent pass-through costs with no mark-up on the fees.
Outsourcing VS. Employer of Record
Outsourcing involves delegating specific business processes to external providers to streamline operations and reduce costs, while an Employer of Record (EOR) manages employment-related responsibilities such as payroll and compliance on behalf of a company.
KMC Teams offers both solutions, providing business with the flexibility to choose the model that best suits their needs for operational efficiency and legal compliance.
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