Why do Australian companies outsource? And why is the Philippines arguably THE top outsourcing destination for businesses?
We’ll answer all of that and more. In this blog, we’ll dive into:
About 80% of Australian companies outsource and this business practice is only expected to rise with the growing popularity of remote work in developing countries like the Philippines.
Over 300 Australian companies in the Philippines employ more than 44,000 Filipinos in business process outsourcing, financial services, and other sectors.
In fact, outsourcing to the Philippines is now so popular that the IT and Business Process Association of the Philippines (IBPAP) has pledged more jobs and revenue in this industry until 2028.
This is an extremely good sign for up-and-coming Aussie business owners looking to outsource to the virtual assistant Philippines industry!
👉 Related: Why businesses fail with virtual assistants
Australian Companies that Outsource to the Philippines
Outourcing in Australia has already been an established practice for years.
Here are some notable Australian companies that have been outsourcing to the Philippines:
According to co-founder Melanie Perkins, the company chose to outsource to the Philippines because of the country’s familial feel and creativity. Canva was founded in Perth, Australia in 2013.
ANZ Bank, a major financial institution in Australia and New Zealand, partners with Philippine outsourcing providers for key back-office tasks like data entry, document processing, and customer service.
Even before the pandemic, Optus has been working to establish uniform standards and metrics for its offshore contact centres in India and the Philippines.
Star News Group, a leading Australian media company, outsources writers from the Philippines to maintain a competitive edge in delivering outstanding online journalism.
This global financial services provider operates in 33 markets across Australia and New Zealand, the Americas, Asia, Europe, and the Middle East and Africa, employing 16,000 employees.
Other Australian companies that belong to this list are Solectric Australia, Vodafone, Omniveta Australia, Expert360, and more. We’d also like to mention our Australian and international clients who are thrilled with their Philippines virtual assistant!
But why do these businesses outsource in the first place? 🤔
👉 Related: What can a Philippines Virtual Assistant do for your business?
Outsourcing in Australia: Definition of Terms
Before we get into the reasons for Australian outsourcing, we’d like to clear something up:
Outsourcing vs. offshoring are two different concepts!
Offshoring is a subset of outsourcing; while all offshoring involves outsourcing, not every instance of outsourcing involves going offshore.
Here are more differences between outsourcing and offshoring:
Outsourcing
- Contracting out certain tasks or functions to external service providers (🌏 either domestically or internationally)
- While cost savings can be a factor, outsourcing decisions may also consider expertise, quality, and flexibility.
- Offers more flexibility to adapt to changing business needs, and risks may be more manageable.
Offshoring
- Relocation of business processes or services to another country
- The primary motivation is often cost reduction, as businesses seek lower labour and operational costs in another country. 💼
- Involves higher risks due to cultural differences, time zone variations, and potential regulatory issues.
So if you want your Australian business to have more direct control and oversight over tasks, you’re better off outsourcing.
If you go for offshoring, managing operations in a different country may present challenges in terms of direct control and communication. So you’d have to coordinate the heck out of that arrangement! 😥
Nearshore Is Your Secret Option
But when it comes to outsourcing, there’s a secret option that people don’t usually know about called nearshoring. Nearshore is when you outsource business processes to nearby or geographically close locations, typically with similar time zones.
This approach is exactly what Australian companies do when they outsource to the Philippines; they nearshore. They take advantage of the proximity to reduce concerns related to time differences, cultural variations, and language barriers that may arise when outsourcing to more distant locations. 🌏
👉 Related: How does outsourcing help developing countries?
Meanwhile, onshore simply means outsourcing to service providers within the same country. 👌 This eliminates worries about time zones and cultural disparities, but it usually comes with a higher cost compared to offshore alternatives. 🤷
7 Reasons Why Australian Companies Outsource to the Philippines
So why do Australian companies outsource their operations to the Philippines, whether it’s onshore, offshore, or nearshore? 🤔 Based on our 10 years of outsourcing experience, here are the main reasons why:
1. Lower operation costs
Outsourcing helps Aussie businesses snag talent where it’s affordable—whether that’s local for specific skills, nearby to dodge time zone issues, or somewhere far-off lands for serious cost-cutting. It’s a strategic move that help companies use resources smartly, stay on their A-game, and flexibly adjust their operations.
According to connectOS, employee costs in the Philippines are typically 30% of an equivalent role in Australia. This means that the cost of employing three staff members in the Philippines is almost equivalent to the cost of employing one staff member in Australia.
2. English-proficient talent pool
Outsourcing to English-proficient countries like the Philippines and India ensures smooth communication and collaboration. These countries boast a large pool of skilled professionals who are not only proficient in English but also well-versed in the nuances of business communication.
The Philippines in particular has become the preferred choice for business owners outsourcing their needs, with 95% of its population able to speak English. 👀
Trisha is very professional. She maintains professionalism at all times and has very good English so she’s able to do a lot more for me, because of her language and writing skills.
I am very grateful for having Trisha by my side and I hope to continue the working relationship. I would recommend her to anybody wanting someone who’s good with design, who’s good with English, who is an efficient worker and someone who’s really willing to learn.
She learned how to use a lot of new software and she was very open to that. She is great.
Suzanne Tapper
Creator of the Breakthrough Fertility Method™
Christchurch, New Zealand
The Philippines also topped the charts for business English proficiency, outshining even the United States, according to a study by GlobalEnglish Corporation. The corporation’s Business English Index (BEI) is the go-to measure for business English skills at work, and out of the 76 countries in the mix, only the Philippines hit a score over 7.0. 🤯
That’s a solid proficiency level, showing they can actively dive into business talks and handle pretty complex tasks. For Australian companies and their outsourced teams, this reduces the likelihood of misunderstandings and streamlines project workflows.
3. Well-rounded skills
OA can provide the support any business needs.
Outsourcing Angel has added value across our business from improving customer service to optimising collections. We worked with multiple VAs within OA who have a range of skills that seem to be able to fit any requirement.
– Mark Newstead, COO Butn
Australian companies outsource so they can access well-rounded skills from diverse talent pools. 💯 Seeking expertise beyond geographical borders allows businesses to tap into a broader range of skills and knowledge, from social media management, digital marketing, eCommerce, and other areas.
This contributes to innovative problem-solving and the ability to adapt to evolving business landscapes.
👉 Related: 7 ways we empower our virtual assistants
With a well-rounded team, Australian companies can stay agile, address various business needs, and navigate challenges with a global perspective. 🌍
4. Flexibility
The slight time difference (similar to Perth and only two hours behind Sydney) makes it easy for Australia and the Philippines to sync up for smooth communication.
So with hardly any time difference, Filipino teams can effortlessly sync up with your schedule. This not only promotes smooth communication but also saves you from extra costs for night shifts, unless you specifically need round-the-clock service. ⌚
Our Filipino team at Outsourcing Angel particularly loves the 6 am to 3 pm work shift, perfectly matched with Australian accounts, so they can breeze through their day without battling rush hour. We’ve never had to commute for work in years! 😆
My VA Ruby has been awesome with communicating what she needs from me, which has been great. She puts her hand up to say “Well, I can do this, I can do that – and this is how I can make this work easier for you” has been fantastic.
In the beginning, it was a little bit of work for me to set-up things like templates, but even where I had missed some templates, Ruby still took initiative and did things completely correctly. So that has been great for me.
Amanda Jeffrey
CEO of Fox Cosmectics,
Sydney, Australia
On top of that, outsourcing gives Aussie businesses the freedom to scale up or down as much as their business needs to. This flexibility means they can allocate resources smartly without the hassle of local hiring or downsizing.
5. Increased productivity
Not surprisingly, companies turn to outsourcing to increase productivity. By leveraging the specialised skills and efficiency of outsourced teams, Australian businesses refine their operations, allowing them to concentrate on their core functions and strategic initiatives instead.
We could try to do it all, but our time is much better spent on income-producing activities which is how a virtual assistant can help us. I just came back from a 2 week holiday and [on social media] it looked like I was working, but I wasn’t!
Because I was able to duplicate myself.
– Jenny Dinh, Founder Co.Lab Space Sydney
This heightened efficiency positions them to adeptly handle market demands, foster innovation, and maintain a competitive edge. And when outsourcing goes right, resource allocation becomes better for companies too. 👌
👉 Related: Meet our skilled Philippines virtual assistant network
6. Enhanced customer experience
By entrusting customer support to dedicated outsourced teams, businesses can channel their energy and expertise solely toward enhancing the overall customer experience. 🤝
This helps Australian companies in the Philippines to:
- delve deeper into customer inquiries
- promptly address concerns
- provide tailored solutions
- foster positive and personalised interaction
- and leverage the specialised skills and training of customer service professionals
The Philippines is especially sought-after for companies looking to outsource customer support. According to Colliers, Filipinos’ “soft skills, including customer support, English language proficiency, and cultural affinity to the North American markets, are the Philippines’ biggest draws, which make the country a force to be reckoned with in the BPO sector.”
👉 Related: Why entrepreneurs prefer agencies to hire virtual assistant Philippines
7. Security and peace of mind
Last but not least, entrusting tasks to reliable outsourcing partners with established data protection measures and management systems ensures confidentiality of your sensitive information.
👉 Related: How to keep your data safe with VAs
These partnerships often come with dedicated security protocols and compliance standards, offering a layer of assurance for businesses concerned about data security. This also helps Aussie businesses navigate their operations with confidence in an increasingly digital and interconnected business landscape. 🤖
I have a lovely person who is being supported properly and being paid a living wage, doing the work that I need her to do in a timely fashion and does it well, and I get the impression [that she] actually likes her job-[all] that peace of mind, to me, is just invaluable.
-Nina Froriep, Chief Video Democratizer, Clock Wise Productions
Australian companies in the Philippines value VA services
All in all, outsourcing for Australian companies is more than just a cost-cutting move. It’s about tapping into diverse skill sets, seamlessly handling different time zones, cranking up productivity, and ensuring top-notch data security. 💯
Outsourcing to the Philippines helps companies achieve all those things. And according to H.E. Ma. Hellen De La Vega, Philippine Ambassador to Australia, Australian companies with ties to the Philippines “continue to do well and that they remain confident in the future trajectory of the Philippine economy.”
In short: outsourcing is a big win-win for Aussie and Pinoy businesses!
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