Outsourcing Philippines: The Bigger Picture

Outsourcing Philippines

Millions of people around the world celebrated Barrack Obama’s victory in taking the Presidential office for a consecutive time.  On the other hand, the BPO industry is having some worries after speculations of President Obama’s intent of resurrecting talks about the ban on outsourcing spread.  His firm stand on bringing jobs back to the American people was received with mixed reactions from US companies and BPO firms alike.

In summary, The “Bring Jobs Home Act” is an effort to reduce the unemployment rate in the country by putting an end to the outsourcing activities of US-based companies and keep employment within US soil.  It accomplishes this by removing tax incentives for businesses that allow BPO firms handle their operations off-shore and granting a 20% tax cut on costs for those who would transfer theirs back in the country.

However, recent studies concluded that outsourcing had very little negative effect on the US economy and shouldn’t be blamed for “rubbing salt in the wound” regarding the unemployment rate.  In fact, it is found that every outsourced job is replaced by almost two new jobs in the States.  Outsourcing Philippines is an integral part of most US-based companies’ survival in these trying times.  If not for the Philippine BPO industry, some of these companies would have thrown in the towel and close its operation altogether.  Logic will dictate that the banning of outsourcing would actually do more harm than good to the US economy.

Big companies turn to outsourcing Philippines for one simple reason, keeping costs low while maintaining a high level of productivity.  One American employee is already the equivalent of three Filipinos having similar credentials allowing clients to get more for what they pay for.  This helps them to stay competitive and actually grow amidst a very fragile and unstable economy.  In turn, these companies will have the means to create more jobs at home as not all business processes can be outsourced off-shore.

It is safe to say that BPOs shouldn’t be treated as a problem but rather a solution to the US economic problem.  Companies suffered great losses from the recent economic crises and it may take some time for them to recover.  However, with the BPO industry’s help, they have a better chance of recovering much sooner which in turn, would also allow them to help the economy as well.