Business Process Outsourcing: Now A Must For Singaporean Companies
Singapore’s cost of living is known to be one of the highest in the world. Naturally, the cost to operate a business here is very steep as well. And unlike other countries, we do not have a minimum wage set primarily due to the fact that the government owned 54% of Singaporean companies.
While it’s relatively easy to put up a business here because of our safe economy and government and enforceable legal system, our restrictive labor pool is one of the major constrictions that needs to be considered.
The government is coxing the labor workforce towards careers with higher value such as finance, biochemistry, and industrial engineering creating a huge gap in the hospitality, F&B, tourism, and retail industry because fewer locals are willing to take these “low-tier” positions.
And the only way to fill the void is by hiring immigrants who are willing to accept such positions. Here lies the problem since the government is now imposing stricter rules when it comes to hiring foreign workers by increasing the cost of labor for small businesses by at least 15% in order to protect the locals, who do not want to take the above-mentioned jobs in the first place.
Aside from high labor cost, land cost here in Singapore is also sky high due to the very limited land availability and strategic port location. Thus, buying or even renting office space will shoot up your overhead cost.
The only better option for Singaporean companies is to embrace the globalization of workforce and outsource its businesses to countries like the Philippines.
The Philippines is home to more than 800 call centers and BPO service providers that have been in the country for more or less a decade. Some of the world’s biggest multinational companies like Accenture, Convergys, and JP Morgan Chase have successfully set up their BPO presence in the country. The country is one of the pioneers in the industry giving assurance that they have the proper know-how in the industry.
Metro Manila, the country’s central business district, is rank second in the world next to Bangalore, India as one of the top BPO destinations in the world according to Tholon (strategic offshoring advisory firm).
What sets Philippines apart from other countries that offer business process outsourcing is its close cultural affinity to the West (US & UK), which is an important factor to consider when setting up business abroad. There’s also a large availability of highly educated and skilled professionals who have experiences working in a BPO set up.
And with the total outlay of around $1700 per employee inclusive of salary, rent of office space and furnishing, it’s a great bargain considering the quality of professionals available in the Philippines.
BPOs are now scattered all over the archipelago, not just their capital city. Cost is even cheaper in provinces like Cebu, Davao and Clark.
Philippines is among the top 10 economies making the biggest improvement in business regulation in the past year. Their government implemented regulatory reforms in three areas – simplified occupancy clearances easing construction permitting, new regulations that guarantee borrowers’ right to access their data in the country’s largest credit bureau, and the introduction of a fully operational online filing and payment system making tax compliance easier for companies.
BPO nowadays not only focus on call center solutions. Other processes like finance, marketing, recruitment, IT and sales among others can be done offshore.
Outsourcing activities lead to a decrease in administrative responsibility. The obligation to maintain a skilled set of employees is directly transferred to the service providers in countries like the Philippines giving business owners the opportunity to focus on their core business.