Metro Manila is the capital of the Philippines; the political, financial, educational, and social-cultural center that comprises nearly 30% of the entire country’s GDP.

It receives a large portion of the government budget, and Philippine events tend to focus more on Manila’s happenings. Of course, having a large population means more business opportunities, more workforce allocation, and consequently, more profit. Imports and exports are largely centered here, and grounding a business in Manila means having every resource at an arm’s reach away.

So why are outsourcing companies moving or relocating to Cebu? Or moving out to other major cities like Davao, Iloilo, or Bacolod for that matter? If Manila is so rife with economic opportunities, why do BPO companies prefer the remoteness of these outlying cities?

1) To escape the excesses of Metro Manila. Well, the list of negatives is long. The country’s capital is the most densely populated city in the world, with a population density of around 43,000 people per square kilometer. The density congests every area in the city and, with migrants from provinces coming in droves, crime goes up and safety for ordinary civilians plummets.

The city’s air pollution is also one of the worst in the world, with the pollutant particles making up nearly 60 micrograms of particles per cubic meter, almost 300% above acceptable levels.

Intense traffic problems is also a turn-off for most foreign investors wanting to establish businesses in the country. One hour or more traffic delay times are common in its congested streets.

The political turmoil in Manila is real and tangible, and even the rest of the country is easily swept by its chaos. Red tape and corruption among the government agencies are widespread.

With this list of harmful factors, no wonder BPO industries are trying their hand on other urban areas.

2) Cebu has established its integrity as a true BPO hub in Asia. A few years ago, Cebu emerged as one of the Top 50 Emerging Global Outsourcing Cities in a Thornton study, besting all other Asian cities in India and China. The achievement has convinced potential BPO investors to come to the city and set-up their businesses here.

Additionally, the quality of benefits offered by Cebu does not differ so much as with Manila’s. Literacy rate is high among the workforce. In fact, BPO companies actually work with the local schools and universities, producing graduates that are highly employable and competent. The cultural adaptability of Cebuanos with foreigners is the same, if not, better than their counterparts. Furthermore, Cebu already has the IT infrastructure capable of supporting a robust BPO industry.

The concept of outsourcing presents a simple premise: services of freelance agencies or individuals are contracted by certain companies in exchange for a pre-determined amount.  Accordingly, these freelancers are tasked to perform work within the company structure without necessarily becoming an employee of the company.

During these financially-troubled times, more and more companies have resorted to ways that tend to lessen operating costs and expenses.  One of these alternatives is resorting to outsourcing.  It is the perfect choice for those who want the job done fast.  Moreover, outsourcing the job can be less expensive since you do not have to pay for other operating costs related to training the company workforce.

There are a lot of freelancers that provide a full range of professional services.  In view of their expertise and mastery over the job, these individuals know how to beat the clock.  In addition, hiring a freelancer to do the job would cost less compared to hiring an individual as an employee.

When the company hires an individual, it has to pay for costs relating to training and schooling for the job.  In addition, the company has to comply with the legal requirements relating to the individual’s employment.  But with outsourcing, it is much cheaper, and the output is much better since the job is performed by professionals that specialize in certain fields.

No wonder outsourcing has become a more popular alternative for many businesses that seek to lower their operating expenses.  It has played a significant role in improving revenue ratings and provided a meaningful solution to the work required by these businesses.

For more on this, visit Outsourcing Truths to learn more about it.

India and the Philippines are widely considered to be the top outsourcing destinations in the world. Just so we could know what really makes them tick, we’ve set their strongest qualities side by side. Hopefully we can determine why they really succeed in the outsourcing world and others do not.

India

Educated and Talented Workforce. With over a billion inhabitants, India never seems to lack good talent. The technical expertise that we see in young Indians is the result of a rigorous education system that emphasizes science and mathematics at early levels of school. Consequently, Indian workers have a good grasp of qualitative and quantitative concepts, enabling them to comprehend the latest technologies and trends available. Indians are great English speakers too, producing 2.3 million English-speaking graduates.

High-end Technology. While data entry is still strong among outsourcing jobs in India, numerous offshore jobs going to India are consistently increasing in complexity and scope. The networking infrastructure in the country — telecom, ISP, and networking sectors — are intertwined to assist the growth of BPO-related jobs.

Pro-Outsourcing Government Stance. India’s government so far has favored the enormous growth of the I.T. sector. Landmark laws have been passed in order to facilitate the entry of foreign investment, international job offerings and outsourcing opportunities. A few of these measures include:

• Creating a separate governmental department — The Ministry of Information Technology — to handle all national I.T. projects and to simplify regulation.

• Passing the Information Technology Act of 2000, a body of law that seeks to regulate all e-Commerce and I.T.-related activities in the country. The issuance of cyberlaws makes India one of the select nations to consider on I.T. security.

Philippines

Cultural Affinity/Better Adaptability. It is no secret that Filipinos are better equipped in dealing with Westerners. Their English skills are comparatively better than other Asian neighbors, being influenced by several decades of American rule. Filipinos boast about their countrymen having a 95% literacy rate, and almost 80% of these are fluent in English.

As a result, Philippine English is more accent-muted; meaning there is a small of amount of discernable intonation and unfamiliar diction in their speech. Western culture is also ubiquitous in the country and widely-accepted. This makes it easier for Westerners to understand communication with the Filipinos, and lessens culture shock for them.

Service-oriented Workforce. In addition, both locals and foreigners admit that Filipinos are quite adept at dealing with people relationally. Decades of Malay, Chinese, and Spanish influences have developed the Filipino with a commendable gift of better relational skills. Consequently, they are more proficient in areas of customer service. No wonder many international firms choose to outsource their customer service departments to the Philippines, and that BPO industries are booming in this nation.

Active Government Support. Although the Philippines is relatively a newcomer in the outsourcing industry, it also has responded quickly to the emerging IT trend, setting up an atmosphere for job growth and foreign investment during the dot com boom.

• Creation of the Information Technology and E-Commerce Council (ITECC) and the E-Commerce Act of 2000 in order to handle and encourage the growth of the IT industry in the country. The cyber law also mandates the businesses to extend their services online, making local Philippine businesses available on the Web.

• Creation of the nation’s first Cyber Corridor, a network of cities having the most vigorous and productive IT and BPO hubs in the country. This national project aims to generate at least $13 billion in revenue this 2010, and employ more than a million Filipinos.

In today’s IT-run world, a lot of companies are posting jobs that deal with web design and development. In addition, content writing is also in demand since this is also a vital aspect for website optimization. Apparently, by outsourcing their web development, content writing and other IT-related needs, they can increase their capacity and productivity. As a result, they are able to serve their customers and clients better.

The best thing there is about outsourcing is that it frees one’s hands from dabbling with the particular outsourced job. In addition, it frees up company resources by allowing it to minimize IT expenditures. Accordingly, there is no need to spend for equipment since one does not need to set up an in-house personnel or department for that matter.

By simply letting others do the job, one can redirect its resources into the core business of the company. It relieves the executive and administrative team from dealing with human-resource problems as well as issues that deal with manpower.

Among the best things about outsourcing is that one can save on expenses relating to training. In addition, outsourcing also allows companies to gain access to an unlimited pool of talented individuals that possess specialized IT skills.

Outsourcing is the intelligent choice for companies who seek to save on operating expenses, and focus on its core business. Through this medium, one can significantly improve the business by being able to focus on providing the best quality products and services.

Why drain your resources when you can use it on matters that really count? Relieve yourself from the burden of costly operational expenses by simply outsourcing your IT needs. Visit Outsourcing Truths for more information.

For employees in the Philippines, the 13th month pay typically received at the end of the year is indeed something to celebrate. After all, the stated purpose for the 13th Month Pay Law issued by President Ferdinand Marcos in 1975 was “so that they may properly celebrate Christmas and New Year.” That is why employees from different industries, be it food services or outsourcing, look forward to the coming of December.

Presidential Decree No. 851, or the 13th Month Pay Law, mandates all employers to pay all rank and file employees a 13th month pay on or before December 24 of each year. How is the 13th month pay in the Philippines computed? The 13th month pay is equivalent to one twelfth (1/12) of the basic salary within a calendar year. To be eligible for it, an employee must have worked for the employer for at least one month in that calendar year.

In the computation of the 13th month pay, the “basic salary” excludes overtime pay, earnings, sick leaves, vacation leaves, maternity leaves and other remunerations.

In cases where an employer withholds the 13th month pay, covered employees can direct their complaints to the Department of Labor and Employment (DOLE) or the National Labor Relations Commission (NLRC).

The 13th month pay is different from the Christmas bonus. The 13th month pay is mandated by law, whereas the Christmas bonus is paid at the sole discretion of the employer. The 13th month pay is taxable only for amounts that exceed Php 30,000.00 (Philippine pesos).

There are employers who are exempted from paying the 13th month pay, among which are government and government-owned corporations, employers of household helpers, and employers of those paid on commission or task basis. An outsourcer outside the Philippines can only be subject to the 13th month pay rule if the company has its own business units on Philippine grounds, duly registered with the appropriate government establishments. When the outsourcing arrangement is purely on a contractual freelance basis, the employer is not required to dole out the mandated bonus.

Indeed, the 13th month pay serves its purpose to lend extra financial aid to employees during the Christmas season, and at the same time boost employee morale.

Interested about outsourcing in the Philippines? Don’t fret about finding the right information. Visit Outsourcing Truths.