How does outsourcing help developing countries?

Outsourcing benefits companies by cutting costs, improving the quality of products and services, and helping them grow their bottom line. This is well-known among multinational companies and SMEs in developed countries.

But how does it help the people at the receiving end of the process? How does outsourcing benefit developing countries?

The Economic Impact of Outsourcing to Third-World Countries

For over 20 years, companies in developed nations have increasingly outsourced parts of their business processes to developing countries like India, the Philippines, and Indonesia.

This trend has facilitated the rise of remote working or the “digital nomad” lifestyle, where many outsourced workers operate from home offices or public spaces.

Victoria Nelle is Outsourcing Angel’s social media manager from La Union, Philippines.

Outsourcing involves passing non-critical business functions to economies with lower labour market rates. Commonly outsourced functions include customer service, bookkeeping, accounting, marketing, and human resources, among others.

👉 Related: Understanding Filipino Culture | Effective Communication with Virtual Assistants

Why do companies outsource to other countries?

Companies outsource to other countries primarily to:

• reduce costs
• access a larger pool of skilled workers
• and improve efficiency.

By outsourcing to low-cost countries, businesses can achieve significant cost savings while maintaining high-quality standards. This strategy allows companies to focus on their core competencies and allocate resources more effectively.

The Philippines

In the Philippines, the outsourcing industry has become a cornerstone of the economy. Over 1.7 million Filipinos are employed by business process outsourcing (BPO) companies, contributing approximately $35.4 billion in revenue in 2023 alone​​.

The industry has positioned the Philippines as a global leader in the last decade, particularly in call centres, making it the Call Center Capital of the World in 2010. From that point onward, the BPO industry expanded significantly, generating increased revenue and becoming the leading provider of job opportunities in the private sector.

We have monthly catch-ups with our virtual assistants from the Philippines to foster positive working relationships across the board.

At Outsourcing Angel, the Philippines has become our preferred choice when hiring resourceful virtual assistants for business owners. Our Australian and international clients are choosing to outsource their operations to Filipino virtual workers due to:

• Lower operation costs
• The country’s English-proficient talent pool
• Filipino’s well-rounded skills
• Flexibility
• Increased productivity
• Enhanced customer experience
• Security and peace of mind

For more details about the reasons why Australian and other developed countries outsource to the Philippines, please click the article below.

👉 Related: Top 7 Reasons Why Australian Companies Outsource to the Philippines

India

India also remains a major player in the outsourcing market. Cities like Bangalore are tech hubs with thousands of tech workers employed by U.S. companies.

The country’s IT-BPO sector employs millions, with companies like IBM having a significant workforce presence. IBM, for example, employs about 130,000 people in India, which is a substantial portion of its global workforce

Addressing Social Issues

Outsourcing companies to developing countries are not just focused on the bottom line. They also contribute to community stability and societal transformation in developing nations.

Many companies and stakeholders in these countries recognise the positive socio-economic impacts of outsourcing jobs to other countries. For example, BPO giant Teleperformance continuously promotes quality education and learning opportunities to vulnerable groups and communities.

Likewise, the Telus Philippines Community Board has donated $1,005,000 since 2012 to 125 grassroots projects, charities and organisations. There are also Telus community boards located in El Salvador and Guatemala, where the company distributes $100,000 annually each to outreach projects.

Foundever (formerly Sykes) has its EverBetter wellness program and donates thousands of dollars to Libraries Without Borders. The global technology and services company Concentrix (formerly Convergys) also publishes annual sustainability reports, where they document their positive impact on the environment and the communities where they operate.

Our team personally organises and participates in community outreach projects in the Philippines, during our annual company trips. (photo taken November 2023)

At Outsourcing Angel, we donate 10% of our monthly profits to charity initiatives and livelihood programs in the Philippines.
We have supported:

• feeding programs
• donation drives for medical supplies
• solar energy projects for remote communities
• clean water pumps and systems
• repairing damaged homes during typhoons
• agriculture tools and training, and more.

Additionally, we partner with Virlanie Foundation in the Philippines, where our virtual assistants volunteer to teach computer literacy to disadvantaged children.

We supply the necessary tools, software, and stationery, and conduct regular training workshops in writing, communication, social media, and the basics of marketing. Our goal is to equip the Virlanie students with the skills and confidence they need to build successful careers.

Our virtual assistant volunteers conduct workshops to equip disadvantaged kids with skills and confidence they need to land well-paying jobs.

Providing Important Jobs

Outsourcing offers well-paid jobs in developing countries that might not be otherwise available. These jobs are not just low-end, low-skilled positions but often require professional and skilled individuals who support critical business operations.

These opportunities provide workers with a sense of pride and fulfillment, enabling them to support their families and climb the career ladder. Many outsourced jobs start with salaries higher than what local jobs typically offer, giving employees the chance to build better lives.

In 10+ years of working with our Filipino virtual assistants at Outsourcing Angel, we’ve helped them gain financial freedom, experience work-life balance, build their dream homes, and enjoy quality time with their families due to flexible work arrangements.

👉 Related: The complete benefits of working as an Outsourcing Angel VA

Our virtual assistants in the Philippines attend our sponsored annual company trips at Outsourcing Angel.

The Future of Outsourcing in Developing Countries

Outsourcing continues to present a bright future for countries like India, the Philippines, and others, enriching their economies and improving the well-being of their workforce. The positive impact on both economic and social fronts highlights how crucial outsourcing has become for developing nations.

So—does outsourcing help developing countries? Yes, it most certainly does! 🤗