Outsourcing 101: Frequently Asked Questions When Outsourcing to the Philippines

For many business owners, outsourcing to the Philippines is venturing to unknown territories – literally and figuratively. There are a lot of doubts. A lot of questions. A lot of what if’s.

 

Fortunately, questions have answers, and fortunately for you, we’ve listed here the most frequently asked questions when it comes to outsourcing to the Philippines. If unanswered questions is what’s preventing you from outsourcing to the Philippines, then you’ve come to the right place.

 

So, without further ado, here’s the ultimate FAQ when outsourcing to the Philippines.

 

Can a complete newbie incorporate outsourcing into his business?

The short answer to this question is ‘yes.’ You can outsource to the Philippines even if you haven’t outsourced before and even if you’re just a new entrepreneur. There are literally hundreds of first-timers in the outsourcing world – some are successful and some are not.

 

The difference between the successful newbies and the not-so-successful newbies is that the successful ones planned as much as they can and did their due diligence – in the same way that you’re doing yours by reading these FAQs. Learn as much as you can and let experience be your best teacher.

 

I don’t have the time to train someone how to do a certain task. What do I do?

If you’re saying that you don’t have the time to train someone, then you’re saying that you don’t have the time to do outsourcing at all. Period. Part of outsourcing is training your remote team. It may take time in the beginning, but once you’re done with training, you can actually save time because you won’t be doing the tasks that you used to do before.

 

Invest in training in the beginning, and once everything is settled, you can live your own version of the 4-hour workweek.

How long will it take me to hire someone?

You can actually hire someone within one to two weeks, depending on how stringent your hiring process is. If you will require several tests to be taken and if there are different interview stages, it might take longer.

 

If no one is responding to your job post, we suggest you review the way it is written. Maybe it’s vague and potential candidates are not really sure what the job requires and entails. Maybe your offer is not up to par with industry standards. Your job post is the first thing you should troubleshoot if you’re noticing that your job ad is not getting enough responses or the quality of responses you seek.

 

Is there an advantage to using a ‘middle man’ or a ‘middle agency’ when hiring Filipinos?

The only advantage we can think of is that it makes the hiring process more convenient for you because technically, they are hiring employees on your behalf. You communicate with them, and they communicate with the employee.

 

The disadvantage of using an agency or a middle man when outsourcing is it tends to be more expensive. For example, they charge you $1,000 per month for a full-time content writer, but they’re just paying the content writer $500. The $500 mark up is sort of your fee for using their services. Also by hiring directly you can save lots of time. Instead of explaining your tasks to the middle man, you can communicate directly with your remote team.

 

In short, hiring directly will save you time and money. Aside from that, hiring directly can also find you long-term employees because you are establishing trust and building a relationship with your workers directly.

 

Do I need to pay my Filipino employees in their local currency?

No. When Filipinos transfer money from their PayPal account to their bank account for withdrawal, it’s automatically converted to the local currency, so you can pay them in your own currency.

 

There are Filipinos who want to be paid in dollars and there are some of want to be paid in pesos. Those who want to be paid in pesos want to avoid their salary being affected by the fluctuations in the currency exchange rate.

 

At the end of the day, it’s actually up to you in what currency you would like to pay your Filipino employees.

Do I need to pay local taxes?

No, you don’t have to pay local taxes. Under the Philippine labor laws, contractors have to pay taxes out of their own income and since you don’t have a physical office there, you’re not obliged by any law to pay local taxes as well.

 

Do I need to pay other benefits?

Here’s the answer – you’re not required to give your Filipino employees benefits, but if you can afford to and you’re willing to, then go ahead. It’s a great way to attract and retain competent and highly skilled Filipinos and can make you a preferred employer in the virtual job market.

 

The most common benefit that Filipinos get is the 13th Month Pay. Essentially, Filipinos get a bonus equivalent to one month’s worth of salary and it’s usually given every December as a Christmas bonus. But at the end of the day, it’s up to you how much you’re willing to give. You can also be selective in giving bonuses. For example, only those who meet certain KPIs will get the bonus.

 

Isn’t the Philippines a disaster prone country?

The Philippines sits on the Pacific Ring of Fire, the most seismically active region in the world. The Philippines is also in the area of the Pacific that is often ravaged by typhoons. So yes, you can say that the Philippines gets more than a fair share of natural calamities.

 

However, infrastructures have vastly improved and over the past years to where businesses that have been outsourcing, rarely have cases where remote employees are completely crippled and are not able to recover. The Filipinos are resilient people and will bounce back and be ready for work after a couple of days. Remember, these men and women are working for you to take care of themselves and their families. Often times their families consist of their own mothers, fathers, grandparents and other family members they are partially or totally taking care of. They have every reason to be resourceful and resilient to ensure they can continue to take care of their families and realize their own economic dreams.

 

Should I hire part-time or full-time?

The decision whether you should hire part-time or full-time employees depends on your needs. Do you actually have enough work to delegate to a full-time employee?

 

The advantage of hiring a full-time employee is the level of commitment is much higher. You see, Filipinos will sometimes settle for a part-time employment because of financial needs. However, while working for you, they are always on the lookout for someone who can give them a more stable, full time job. This is why we encourage employers to hire full-time rather than part-time. They will be much more likely to be 100% focused on you if hired full-time.

 

What you can also do is look for someone who already has a full-time job, but is looking for extra income. This way, expectations are clear and while you may be second priority, you won’t fear that your employee will just disappear on you.

 

Is the Internet speed in the Philippines good enough?

This is one of the biggest misconceptions people have about the Philippines. When the country is mentioned, they imagine a rural country with nothing but rice fields. While agriculture remain to be a vital part of the Philippine economy, it’s actually a highly industrial and highly urbanized place.

 

Ultrafast internet is actually available in the Philippines, but it’s still a bit expensive at this point. The average internet speed is somewhere between 1.5 mbps to 3 mbps. Not the fastest in the world, but it can get the job done – emailing, Skype calling, video calling, web conferencing, etc. Uploading big files can take a bit longer, but it will be done.

 

Is there a secret formula when it comes to outsourcing?

There’s really no secret formula to have a successful remote team, but we have to say that there are non-negotiable things. These include:

 

  1. Establishing mutual trust with your employees
  2. Regular communication
  3. Paying your employees on time
  4. Training and continuous learning
  5. Providing room for growth in your company

 

Put yourself in the place of your employees or take yourself back to that time when you were an employee yourself. What are the things that you were looking for in an employer? What are the things that would motivate you to stay in a job not just as an employee, but as a productive contributor to the growth of that company?

 

Finally, is outsourcing going to boost your productivity?

The answer is a resounding yes. By outsourcing to the Philippines, you can have more time thinking about the bigger ticket items in your business. You can actually run a business, and not be an employee in your own business.

 

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