Outsourcing: Philippines Vs. India

Summary

Ike Stratton, CEO of Staff Virtual, discusses why businesses are increasingly choosing the Philippines over India for outsourcing. He highlights the Philippines' strong English proficiency, Western cultural alignment, and better soft skills as key advantages. The video also points out the Philippines' booming BPO industry, supported by government initiatives, and its superior IT infrastructure, making it an ideal destination for call centers and customer-centric tasks.

Takeaways

• 🌏 The Philippines is increasingly chosen over India for outsourcing due to cultural and language advantages.
• 🗣️ Filipinos are generally better at soft skills and English proficiency compared to Indians, making them more suitable for customer-facing roles.
• 🏢 India had an early advantage in the outsourcing industry, but the accent of Indian professionals can be a barrier for non-Indians.
• 🎓 The Philippines has a strong educational system that prepares graduates for the business process outsourcing industry.
• 💼 Filipinos are known for their work ethic and are often employed in roles requiring empathy and customer service, such as healthcare and hospitality.
• 🌟 The Philippine government strongly supports the business process outsourcing industry, making it a significant contributor to the economy.
• 📈 The Philippines is graduating a large number of applicants annually who are well-prepared for jobs in the outsourcing sector.
• 📞 Call centers are shifting from India to the Philippines, even Indian companies like Tata are relocating, due to better communication skills.
• 💡 The Philippines' westernized culture and neutral English accent provide a better cultural fit for Western businesses.
• 💼 Filipinos offer versatility in the workplace, capable of handling multiple roles and tasks, unlike Indians who may specialize in one area.
• 🔌 The Philippines has superior IT infrastructure, ensuring reliability and uptime for offshore operations.

Q & A

Why is the Philippines becoming an increasingly popular outsourcing destination compared to India?

The Philippines is favored due to its strong soft skills, better English proficiency, and a more neutral accent that is easier for non-Indians to understand.

What cultural differences does Ike Stratton highlight between India and the Philippines?

Ike Stratton points out that Indians are generally more technical, while Filipinos have superior soft skills and English language proficiency.

What is the historical context that has contributed to the Philippines having better English skills?

The Philippines was a U.S. colony for over 50 years, which has greatly influenced the culture and the people's English language abilities.

How does the level of westernization in the Philippines impact its attractiveness as an outsourcing destination?

The westernized culture in the Philippines, including familiarity with Hollywood movies and American slang, makes it a better cultural fit for Western businesses.

What is the term used to describe the Filipino's empathetic and caring nature in customer service?

The term used is 'Pusan binoy,' which signifies the Filipino heart that makes them exceptional in customer service roles.

Why is the work ethic of Filipino people considered advantageous in the outsourcing industry?

Filipinos are known for their strong work ethic, with a 'heart of gold,' making them excellent in roles requiring empathy, listening skills, and care.

How does the government support the business process outsourcing (BPO) industry in the Philippines?

The government in the Philippines strongly supports the BPO industry, recognizing it as a sunrise industry and the largest employer in the country, contributing significantly to the GDP.

What is the significance of the Philippines being the third largest English-speaking country in the world?

This status indicates the widespread English proficiency in the Philippines, which is crucial for effective communication in the global outsourcing market.

How does the Philippines' IT infrastructure compare to India's, and why is this important for outsourcing?

The Philippines has a more reliable IT infrastructure with less downtime, which is essential for maintaining uptime in offshore call centers and other IT-dependent services.

What is the term 'versatility' in the context of outsourcing, and why is it beneficial for businesses?

Versatility refers to the ability of Filipino workers to perform a variety of tasks and 'wear many hats,' making them valuable as generalists in roles such as virtual assistants.

Why are wages in India increasing at a faster rate than in the Philippines, and what does this mean for businesses?

Wages in India are rising quickly due to high demand and frequent salary raises, which can diminish the return on investment for businesses more rapidly than in the Philippines.

Outlines

00:00

🌏 Outsourcing Shift: Philippines vs. India

Ike Stratton, CEO of Staff Virtual, discusses the trend of businesses choosing the Philippines over India for outsourcing. He emphasizes the cultural and language advantages of the Philippines, highlighting Filipinos' superior soft skills and English proficiency. Despite India's first-mover advantage in the 1990s, the difficulty of understanding Indian accents has led to a backlash. The Philippines, being a former U.S. colony, has a more neutral and legible accent, making it an attractive outsourcing destination. Additionally, Filipinos' westernized culture and familiarity with American slang make them a better cultural fit for businesses.

05:02

📈 Philippines' Outsourcing Boom: Education & Infrastructure

The script outlines the reasons behind the Philippines' booming business process outsourcing (BPO) industry. The country's educational system is tailored to produce graduates ready for the BPO sector, with half a million potential employees graduating annually. A significant shift from India to the Philippines for call center services is noted, with even Indian companies like Tata moving their operations. The Filipinos' excellent English and lack of a strong accent are emphasized, as is the government's strong support for the BPO industry, which has become a major economic contributor. The Philippines is also described as more westernized than other Asian countries, with a preference for American culture and lifestyle, and is strategically located between North America and Asia.

10:04

💼 Philippines' Advantages in Versatility and IT Infrastructure

The final paragraph focuses on the versatility of Filipino workers and the superior IT infrastructure in the Philippines compared to India. Filipinos are praised for their ability to take on multiple roles within a company, making them ideal for positions like virtual assistants. The country's IT infrastructure is described as reliable and on par with Western standards, ensuring minimal downtime for offshore operations. The video concludes by emphasizing the Philippines' attractiveness as an outsourcing destination, especially for customer-centric tasks, due to its combination of cultural alignment, language proficiency, and robust infrastructure.

Keywords

💡Outsourcing

Outsourcing refers to the practice of contracting work to an external company or individual rather than performing it in-house. In the context of the video, it is the process of businesses choosing to have services provided by workers in a different country, often to save costs or access specialized skills. The video discusses why the Philippines is becoming a preferred destination for outsourcing over India.

💡Soft Skills

Soft skills are personal attributes that enable someone to interact effectively and harmoniously with other people. The video emphasizes that Filipinos are said to have better soft skills compared to Indians, which is advantageous in customer service roles within the outsourcing industry.

💡Accent

An accent refers to a distinctive way of pronouncing a language, typically associated with a particular country, region, or social class. The video mentions that the Filipino accent is more neutral and easier to understand for non-native English speakers, which is a key factor in the preference for outsourcing to the Philippines.

💡Cultural Fit

Cultural fit describes how well an individual's or organization's values and norms align with those of another entity. The video suggests that Filipinos have a better cultural fit for Western businesses due to their westernized culture and familiarity with Western media and slang.

💡Work Ethic

Work ethic is a belief in the importance of hard work and diligence. The video attributes a strong work ethic to Filipinos, which is seen as a reason why the outsourcing industry in the Philippines is thriving and surpassing that of India.

💡Business Process Outsourcing (BPO)

BPO is a subset of outsourcing that involves contracting a service provider to manage one or more business processes. The video discusses the BPO industry in the Philippines as a major employer and significant contributor to the country's GDP.

💡Westernized

To be westernized means to adopt the culture, values, and practices of Western societies, particularly those of Europe and North America. The video highlights that the Philippines is highly westernized, which makes it a more attractive outsourcing destination due to the ease of cultural integration.

💡Government Support

Government support refers to the assistance or endorsement provided by the government to a particular industry or sector. The video mentions that the Philippine government strongly supports the BPO industry, which has helped it to become a leading outsourcing destination.

💡Curriculum

Curriculum refers to the courses and subjects contained in an educational program. The video notes that the Philippines has developed a strong curriculum at the college and university level to prepare graduates for jobs in the BPO industry.

💡Call Center

A call center is a centralized office used for conducting business over the telephone. The video discusses the Philippines as the 'call center capital of the world,' with a large number of Filipinos employed in customer support roles, often involving phone communication.

💡IT Infrastructure

IT infrastructure refers to the set of hardware, software, networks, and facilities that run an organization's information systems. The video points out that the Philippines has superior IT infrastructure, which is crucial for maintaining the uptime and efficiency of offshore call centers.

Highlights

Businesses are increasingly choosing the Philippines over India for outsourcing due to better soft skills and English proficiency among Filipinos.

Indians are generally more technical, but Filipinos excel in soft skills and have a more neutral and legible accent.

The Philippines, being a former U.S. colony, has a strong English-speaking culture, ranking as the third largest English-speaking country.

Cultural fit is crucial for business outsourcing, with Filipinos being more westernized and familiar with Western media and slang.

Filipinos are recognized for their work ethic, often taking on roles in healthcare, customer service, and hospitality.

The Philippine government strongly supports the BPO industry, making it a significant contributor to the country's GDP.

The Philippines has a large pool of BPO-ready graduates due to tailored education curriculums in colleges and universities.

There is a noticeable shift from India to the Philippines for call center services, including Indian companies moving their operations.

Accent clarity is critical for call centers, where the Filipino accent is more easily understood by a global audience.

The Philippines is described as not being 'as Asian' due to its Westernized culture and history of colonization.

Wage increases in India are outpacing those in the Philippines, affecting the return on investment for businesses.

Filipinos are versatile, capable of handling multiple roles within a company, unlike Indians who often specialize in one area.

The Philippines boasts superior IT infrastructure, ensuring reliability and uptime for offshore operations.

The geographical location of the Philippines is strategic, situated between North America and Asia for ease of communication.

The video aims to educate viewers on the benefits of building offshore teams in the Philippines for business growth.

Transcripts

[Music]

hi my name is Ike Stratton and I'm the

CEO of staff virtual a business process

outsourcing company here in the

Philippines and in this video I would

like to discuss why businesses are

increasingly choosing Philippines over

India as the outsourcing destination of

choice so when comparing two cultures

it's difficult I'm gonna have to

generalize a little bit I'm not putting

down India at all I love India I have

many Indian friends never been there but

I know a lot about the differences

between India and the Philippines and I

would say if there's one difference

between India and Philippines I would

say that Indians are more technical in

general but Filipinos have better soft

skills and much much better English so

when it comes to outsourcing there's

really two big players in Asia India and

the Philippines and India really had

first mover advantage if you remember

back in the early 90s you started

getting calls and telemarketing by

Indians oftentimes during dinner asking

you to buy a particular product or

service and there was really sort of a

backlash to all of that a big reason why

is because the Indian accent is simply

very hard to understand for non-indians

the Filipinos have a more legible accent

it's more neutral it's more easy on the

ears and it's easier to understand

I have staff that have no accent at all

in fact a lot of people don't realize

that the Philippines is a third largest

english-speaking country in the world

behind the UK in the USA so the

Philippines was a colony of the United

States for over 50 years and it really

imbued the culture and the people with

great English and they're very

westernized that's another big reason I

think that the Filipinos are much more

westernized than Indians Filipinos love

basketball when they watch movies it's

Hollywood movies not volley with movies

they know

our little stains and Maxim's they know

all of our slang turns so it's really

not just about the English it's about a

better cultural fit for your business

which means they're gonna be able to

plug in to your company you're not gonna

have those language barriers or cultural

barriers another reason why Philippines

I think is winning in the battle of

outsourcing and offshoring is the work

ethic of the Filipino people Indian

companies really enjoyed first mover

advantage in the outsourcing industry if

you remember back in the 90s we started

getting telemarketing in America by

Indian companies and Indian companies

are really the first two to go to market

with offshore services and this happened

around 25 years ago to this day India

remains the dominant player in IT

outsourcing there's millions of Indians

that are incredible programmers that are

working for some of the largest

companies in the world like emphasis the

Tata Group Google there's no doubt that

Indians are definitely some of the most

brilliant incredible programmers in the

entire world but if you're looking for

soft skills you cannot beat Filipinos

Filipinos have a heart of gold they call

it the Pusan binoy the Filipino heart

their heart is what makes them so

incredible a customer service and

they're so empathic and they listen and

they care Filipinos are doctors they're

nurses they're nannies or caregivers

they're receptionist at hotels I just

got back from Dubai and every single

hotel in the Middle East it seems like

as a Filipino working as a receptionist

or concierge if you want soft skills you

cannot be Filipinos another big reason

why the Philippines outsourcing industry

is booming and surpassing India

especially when it comes to call center

services and those things requiring soft

skills is the strong government support

that the government here in the

Philippines provides the business

process outsourcing industry so the

business process outsourcing industry is

really a sunrise industry in the

Philippines it's the largest employer in

the Philippines and the billions of

dollars it generates towards the

Philippines GDP recently just surpassed

the money that they make from offshore

remittances from overseas Filipino

workers or OFWs so it's really the crown

jewel of the Filipino economy and it's

rapidly growing there's about 1.8

million Filipinos working in the

business process outsourcing industry

which is just a phenomenal number and

it's generating tens of billions of

dollars for the economy another reason

why the Philippines outsourcing industry

is surpassing India at this time is that

the Filipinos have really developed

incredible curriculum at the college and

university level to prepare graduates

for jobs in the highly lucrative

business process outsourcing industry so

every year the Philippines is graduating

about a half a million applicants and

many of those applicants want to work in

the business process outsourcing

industry so the the country has really

encouraged the schools to prepare their

students for these lucrative jobs that

could await them in the business process

outsourcing industry we're also seeing a

massive shift from India to Philippines

for all that call center type of work

now my company is in a call center per

se most of the people working for me are

doing non-voice paths but the

Philippines is really the call center

capital of the world there's about 1.8

million Filipinos working in the

business process outsourcing industry

and about half of those are doing

customer support related tasks a lot of

them are on the phone it's funny to see

even Indian companies like the Tata

group are moving their call centers from

India to the Philippines so if the

Indians are outsourcing their call

centers to the Philippines you know it's

the ideal outsourcing destination for

all of your customer centric tasks at

the end of the day it all boils down to

accent if you're on the phone with

somebody that you can't understand that

is a deal breaker especially if you're

trying to sell something and doing

telemarketing to sell anything you have

to do two things right you have to

establish trust first and then you have

to show value and if you're getting

telemarketing by somebody who doesn't

speak proper English

forget about it so the Filipino speak

incredible English

I have Filipino employees my life

partner and business partner speaks

impeccable English she has American

quality English without an accent

those people are virtually impossible to

find in India so Filipinos are better at

English

by and large and you're not gonna have

any of those cultural barriers or

breakdowns that you would have by

outsourcing to India when you go to Asia

when you go to places like India or

Thailand or China you really know you're

in Asia the signs are different it's at

a different language that the writing

oftentimes is vertical instead of

horizontal that's the real Asia right

the Philippines is not that Asian it's

not as Eastern it's highly westernized

my friend says it best he's a Filipino

friend from my Rotary Club since the

Philippines was colonized for 300 years

by Spain and then about six years by

American he jokes that the Filipinos he

says we Filipinos were like Mexicans

that live in Asia that want to be

Americans and I think that's really

funny but there's some truth to that the

Filipinos are by far the most Western

eyes of all Asians and you can really

feel it when you're here it's not like

the rest of Asia it's very different

it's really at the intersection of east

and west and it's strategically located

right in the middle between North

America and Asia another reason why

people are choosing the Philippines over

India is that wages are increasing much

faster in India than they are in the

Philippines my Indian friends that have

companies there it's nothing for for

their staff that asks for 10 to 20

percent increases raises in salary every

year so any return on investment is

gonna be much diminished quickly and

much more quickly in India than it would

be in the Philippines I would say

another advantage for the Pinot's have

over Indians is the versatility so

Indians are often just doing one thing

for your company like programming but a

lot of people need more of a generalists

somebody that can wear a lot of hats

with

is especially from trying to hire a

virtual assistant or executive virtual

assistant you need somebody that can go

from task the task and wear a lot of

hats and have a very versatile skillset

I think the Philippines offers an

incredibly versatile skillset my staff

can do a lot of different things not

just one thing over and over but they

can wear a lot of different hats and

that is super important if you're hiring

a team of generalists doing things like

virtual assistants another huge reason

why companies are choosing Philippines

over India is better IT infrastructure

if you have an offshore call center you

better make sure you have uptime yep you

better make sure that thing's not going

down all the time in in India

unfortunately there's more problems with

the power grid you have more brownouts

you have more downtime unless you're

located in a major city like Mumbai all

bets are off

so if you're really looking for

something to be done with military-grade

precision where you can't have downtime

or very little you need to choose the

Philippines they simply have better IT

infrastructure better telecommunications

it's on par with what you're gonna see

in America or Europe I hope that helps

if you like this video and want more

please subscribe to my youtube channel

we're gonna be putting out many more of

these videos and I want to pass on this

information help people build incredible

offshore growth teams in the Philippines

to fuel their business thank you

[Music]