The Philippines is one of the fastest growing countries in the APAC region (well on its way to becoming Asia’s Fifth Tiger). The country offers an eclectic mix of culture, history and tradition infused with a Western influence. This is complemented by a friendly, welcoming population, unbelievable tourism and a stable, thriving economy.
Business Opportunities in Manila
Metro Manila is considered the home of opportunity in the Philippines. Both local and international companies have established themselves in Manila because of its superior infrastructure, availability of resources and access to skilled staff members. It has a reputation of being a thriving business hub. Many Filipinos know that working in Metro Manila provides them with the widest professional opportunities. It is also why many of those living in provinces travel to Manila to find better career opportunities.
The Thriving Expat Community
If you decide to visit the Philippines, don’t be surprised to see plenty of expats during your stay and enjoying themselves. Whether they are there for business or on vacation, many expats in the Philippines often never want to leave. Some even call it their second home! The Philippines it provides them a unique experience amidst the challenges that come with moving to a new country.
Diversify CEO Angela Vidler spent two months living in the Philippines and even though there were usual problems like traffic congestion and being out of a familiar comfort zone, it was an overall fulfilling experience where she was able to tackle challenges head on and learn much about herself.
Our Marketing Manager Mark Evans also recently stayed with us when he first commenced with the business. Over a one week period, he was able to experience day to day life within Metro Manila. He was amazed at how busy and vibrant the CBD was and found it incredibly safe. He regularly walked around at night looking for a new place to have dinner.
Recently, we held a launch party for our brand new office in Bonifacio Global City. Many of our clients, business partners and directors of Diversify were invited to open our new facility. They were also taken on a tour of the city and experienced the Philippines first hand. Metro Manila is currently experiencing a development boom and is now considered a safe and strategically viable place to do business!
I invite you to check out our new corporate video which showcases both Bonifacio Global City and our exciting new office. It also focuses on our employees’ day at the office and what it’s like working in Metro Manila.
In recent years, there has been a push from the Government to promote tourism in the Philippines. The aim is to get both locals and visitors to visit other locations in the country. The tourism department’s slogan of “It’s more fun in the Philippines” certainly encourages a sense of exploration for anyone in the country. Whether for business or recreational purposes, there will always be something to discover and admire wherever you are in the Philippines.
Working in the Philippines
I am lucky enough to work at our new office in Bonifacio Global City. It’s a great place to come in to each day because of the new and innovative workspace. Most of all, I get to work with some awesome people on a day-to-day basis. Our location gives us access to great restaurants, cafes and entertainment precincts which are important in my work/life balance.
We’re also well serviced by a seamless public transport system. Although the traffic can be a bit troublesome, I get home to my family safe and sound every night! The Philippines is a great place to work in and I’m proud to call it home. Many clients that have visited our new facility have been amazed at the bustling city it is located within. Many have even said it reminds them of some of the larger Australian cities. With the huge level of development underway, BGC will only get better as my work destination.
Safety Comes First
All visitors to the country must be mindful that the Philippines is a developing country. As such, being vigilant and taking safety measures is always important. As with any country, there are areas that visitors should not visit – those most commonly impacted by crime mainly in regional and provincial locations that are affected by crime.
You may see much in the press about the Philippines and security. But I can assure you, as a Filipino, the country is incredibly safe and accessible. Areas like Metro Manila are as safe as any first world city. It has all of the infrastructure and technology required to take your business to new heights. Although it is on a rapid path to being a more prosperous country, it is still developing.
Overall, the Philippines is an wonderful country that is as rich and diverse as its culture. Filipino hospitality and kindness are second to none, and you will feel immediately welcome even as a first time visitor. By knowing particular aspects of the country and certain cultural intricacies that are distinctly Filipino, you will gain a better understanding of who we are and what make us great to engage with!
If you’re ready to begin your offshoring strategy with a high performing team in the Philippines, Diversify can help you get started. Drop us a line today to see if you are ready to take on this new challenge.
With clients demanding ever more for less, it can often be uneconomical to have your accountants performing lower-level data entry work such as posting entries and record keeping. It can, however, be a bit tricky performing these tasks without an Accounting background and with the required qualifications.
So what is the solution?
One answer lies in the use of offshore Filipino accountants.
Tell me about Filipino Accountants
There are a large number of Universities and Colleges across the Philippines that offer accounting degrees. Of course, the quality of both the courses and consequentially the graduates varies dramatically between universities/colleges. Collectively, more than 16,000 students graduate each year from accountancy degrees within the Philippines.
Accountancy in the Philippines
The Bachelor of Science in Accountancy (BSA) program is composed of subjects in accounting, audit, administration, business laws, and taxation. Its primary focus is not limited to business subjects, but also includes banking and finance, government, social services, education, and more. The program also teaches students to integrate information technology concepts into business systems in order to create a more systematic and organized way of storing business-related data.
In the Philippines, a graduate of Accountancy who passed the board exam is called a CPA (Certified Public Accountant) or in short an accountant. An accountant’s job includes the performance of financial functions related to the collection, accuracy, recording, analysis and presentation of an organization’s financial operations. The accountant also usually has a variety of other administrative functions in the company.
The standards of admission to the BSA program are rigorous and demanding, including selective admission policy requirements such as:
- Must be a high school graduate
- Must have a college entrance examination of above average or depending on the specified rating set by the university
- Must pass a separate aptitude test specific for Accountancy
- Must pass the interview conducted by the college admission officer
- Some schools require a high school GPA of 85% and above with no grade less than 80% in all subjects
- Must have at least an 85% or higher average rating in the National Secondary Assessment Test (NSAT)
- Must pass the required English Proficiency examination during the entrance exam
The Board Exam
An accountancy graduate needs to take the Certified Public Accountant’s Licensure Examination before they can practice as an Accountant. The examination is conducted by the Board of Accountancy under the supervision of the Professional Regulation Commission (PRC). It is scheduled twice a year in the months of May and October.
All board subjects are given 2 units with a minimum of 3 exam hours per subject. Since there are 7 board exam subjects, there is a total of 14 units and 21 hours. A candidate for the examination should obtain a general weighted average of 75% with no rating belong 60% in all 7 subjects.
English communication skills and quality of work
English is taught as a second language in the Philippines and in some areas, it is the primary language. Across the whole of the Philippines, more than 94% of the population overall speak English. It is not difficult to find accounting graduates who have a high level of both spoken and written English proficiency.
As is the case anywhere, the quality of the work performed by a particular person will depend upon their level of training, experience, and ability. With the right education, attitude, and training, Filipino accountants are of course quite capable of performing high-quality work.
How much do they cost?
A new graduate who not passed/sat the board exam is likely to earn in the range of $500 to $750 per month.
A Certified Public Accountant will typically be paid between $850 and $1,300 per month, with the final figure depending on their actual skill set and previous work experience in the industry. More senior Accountants with five or more years’ experience typically are paid between $2,000 and $2,750 per month.
In order to get the best results from an offshore workforce, it is important to first understand the things that make them unique, their personal beliefs and most importantly, the cultural differences. Before I dive into discussing the most important things that you need to consider when you are engaging with your offshore workforce, it is important to understand that they are different! Different in how they behave, how they communicate and how they disseminate and understand the information they receive from you. If you enter the offshoring game with an open, understanding and flexible mindset, you will find dealing with your offshore workforce extremely rewarding.
Regardless of where you are based, family is always important. In the Philippines, the concept of family surpasses what many western countries may consider normal. Filipinos are a very family orientated people with large and very closely-knit extended families. The role of parents extends a lot further than in most western countries, with children continuing to strictly follow their parents’ advice and directions well into adulthood. As a rather funny example, one of Diversify’s offshore staff members, who is in her early 30s and has her own children, still has her mother buy all her clothes for her and lets her decide which clothes she will wear to work each day!
A side effect of this can be a reluctance to think independently or question instruction. This is very useful if you are looking for offshore staff that will strictly follow a predetermined process, however, it can actually be a hindrance if you are looking for staff who will be independent thinkers and who will question the status quo when required.
Saving face – knowing when ‘yes’ means ‘no’
We all try our best to ensure the delivery of the best outcome when undertaking a project or task for our employers. The key thing to understand is whereas a locally based resource may question and provide objective feedback if they do not understand the instructions or if they believe it can be done in a more efficient manner, an offshore Filipino resource may not actually understand the instruction but still dive into the task! This is attributed to an overwhelming desire not to disappoint and then subsequently lose face.
The saving of face is a big issue with the Filipinos, as it is with most Asian countries. It is important to understand the potential impact that this unique cultural element can have on the success of an offshoring project. The most obvious issue being their propensity to receive instructions for a task and then confirm their ability to complete the task, even if they do not actually understand or even worse, if they can’t even complete it! The actual reality may be that the staff member has neither the time nor experience to do what you ask but does not want to lose face by admitting as much.
Provide feedback in a reasonable way – the cotton wool approach always helps!
As you can tell by now, Filipinos are different. They have a different value and belief system in regards to family and friends, are always looking to complete the task or project at hand (even if they do not have the capability to do so), are quite sensitive and do not take criticism as a locally based worker may. It becomes quite important to understand that you can rapidly destroy relationships with your offshore staff if you do opt to reprimand them or vocalise your dissatisfaction in front of their peers. The loss of face that is associated with that can sometimes be irretrievable and result in them moving to another job at the first opportunity.
Work is family
At the start of this article, I discussed the important of family for Filipino employees. This belief in family transcends their flesh and blood and can actually include where they work. Relationships are a critical component of Filipino life and they will strive to form close, collaborative and energetic bonds with their fellow employees. This is an area that I have focused on building and one that Diversify does differently than most offshoring providers. Our goal in regards to work/life balance and office environment reflects that. Staff engagement is all geared to creating one big family and as a result of this, our clients enjoy happy, productive, engaged and loyal employees who will stay!
Every workplace has challenges – it is how you deal with them that matters
I have run through a few cultural peculiarities that I believe must be acknowledged and understood when dealing with an offshore workforce. In the implementation of an offshore workforce that successfully works, knowledge is power. If you understand and accept what makes an offshore workforce different then you are more likely to achieve success. It will help you deal with the inevitable roadblocks and struggles that you will face (no different to any other major business transformation strategy).
In my experience in this industry, I have found that if you pay peanuts you will get monkeys. There is no substitute for practical experience and intimate industry knowledge, especially as you are considering a major transformational project that will have a notable impact on your organisation. The impact could be positive or negative depending on the provider you partner with.
An experienced offshore provider will work with you collaboratively and step you through the process. A few of the critical components that an experienced provider would advise you on includes a change in management, achieving organisational buy-in, strategy development, and overall execution.
They say that using experts is expensive but just wait until you use an amateur…
If you are ready to talk about how offshoring can work for your organisation contact us.
- Invest time in developing an understanding of the key differences between your offshore workforce in comparison to your local workforce.
- Your offshore workforce is different – accept it, buy into it and celebrate it.
- Education is important. Investing time in developing knowledge about the cultural, psychological and personal traits that make your offshore workforce different may be the difference between success and failure.
- Undertake a reasonable and soft approach when dealing with the provision of feedback or criticism if you are unhappy with an outcome.
- NEVER publicly reprimand or shame an employee – it could have a drastic effect on culture as well as possibly driving that employee somewhere else.
- Work is considered family – your offshore provider should make this a big focus of their strategy. A happy, engaged employee is a productive and loyal one.
- Be prepared to deal with issues, roadblocks and challenges.
- Always use an expert!
If you are looking to successfully offshore, then it should be of paramount importance to find the right calibre of staff. This sounds simple but can be one of the hardest things to achieve. If you want to access the top Filipino talent, there are a number of things you will need to get right.
As with most countries, the closer you are to the centre of a major metropolis, the deeper and more experienced the talent pool. This is even more so the case in the Philippines, with the greater Manila area being home to approximately 14 million people. The depth of the talent pool available here will far surpass that in any other area of the Philippines.
Once you are in the right location, you then need the right quality facility to both attract the staff and then also ensure they stay happy. Unfortunately, there are still many offices which operate in a “battery hen” style – while this might save you money in the short term, it also a surefire way to scare off any serious talent. Things to look out for with your facility include good access to public transport, high-speed lifts, comfortable maximum staff densities, backup power generators, high-quality staff amenities, facilities not subject to flooding and 24/7 building security.
The Filipinos are prolific users of social media and are quick to share their experiences working with employers. For this reason, employers quickly develop reputations as good or bad places to work. If you (or your offshoring service provider) doesn’t have the right reputation in the marketplace, you simply won’t even get to meet with the good quality candidates. Developing and maintaining that reputation is certainly no simple thing but it starts with honestly valuing and respecting your offshore staff and treating them accordingly.
There are a range of different ways to find the staff you need. Which is most suitable will depend on the type of role you are looking to fulfill. Most good facilities will guide you along this path (or completely take the headache away from you) and chose the channels most suitable to find your prospective staff. The channels which can be used include advertising in industry-specific publications, LinkedIn Premium, job boards and industry/university partnerships. In addition, high-quality offshoring facilities usually maintain a pool of pre-screened and available candidates for common roles.
Due Diligence checks
Once you think you have found your future staff member it is essential to do thorough DD on them which should include as a bare minimum:
- An English language test (supervised)
- Workplace specific test (supervised)
- Reference checking from previous employers
- Full medical
- Basic police checks
In addition, with more senior roles or ones that involve access to financial information, you should also consider:
- Interpol checks
- Full police checks
- Civil litigation checks
- Identity verification
- Qualification verification
Getting the right staff to begin with is the foundation for a successful offshoring experience.
Too often I am approached by people telling me they can get a Filipino staff member who has the skills and experience they need for AUD$8,000 per year. In most cases, they have been told by a ‘friend’ or have seen one of the many websites that offer cheap offshoring or outsourcing solutions. So how much weight can you place on such statements? Is obtaining a full-time offshore resource that knows your business realistically going to cost AUD$8,000 a year? In my opinion, it is highly unlikely …
Such statements are the bane of the industry driving a ‘cheapest possible’ mentality. Businesses shouldn’t focus on sourcing the cheapest price but rather should invest time to understand the options that are most likely to meet their goals and objectives. This will rarely be the cheapest offering.
What are costs like in the Philippines?
Manila is the capital of the Philippines and home to 14 million people. Similar to most capital cities, it is also the centre of the available potential employee talent pool. Minimum wage in Manila for a white collar job is about $500 AUD per month excluding government benefits. Include benefits and this will take you to about $600 per month. So the minimum cost of an offshore resource (with no allowance for things like rent, electricity, internet connection etc.) is about $7,200 per year. Unfortunately, you won’t get much for this amount.
Salaries in the Philippines are usually less than 1/3 the cost of an equivalent Australian employee. In addition to salary, you also need to consider other on costs. By far the cheapest option will be to have your staff member work from home but there are countless issues that will arise from this including:
- Who else is at home during the day (Filipinos typically have large households with many people at home at any given time)
- What is the quality of the internet?;
- How will IT support be provided?
- Is there emergency back-up power? (brownouts are common in many parts of The Philippines);
- Do they have all the tools and support necessary to perform their role?;
- How will you maintain staff morale?
- How will you supervise and train?
- So to do things properly you will need to house your staff in a facility which provides this support or travel to Manila and set up your own facility.
If you are seriously considering hiring offshore or outsourced Filipino employees, you need to be reasonable, realistic and considered. Cost savings should not be the end game for any potential offshore or outsourced implementation. Cost wise, there are significant savings to be had but as with everything, you will get what you pay for. You need to consider other factors, including:
- Your businesses actual organisational objectives excluding the obvious cost savings that can be obtained.
- Offshore staff engagement.
- Staff satisfaction and turnover – a long-term offshore/outsourced staff member is a valuable one.
- Change management – Making sure that your local workforce is aware of and has bought into any offshore or outsourced solution.
- Your long-term business objectives. An offshore or outsourced workforce is only part of the equation.
The above is a not an exhaustive list of things that you must consider but need to be acknowledged as a key part of any explorative research you may undertake. A high quality offshore or outsourced staff provider will ask you these questions, avoid those who don’t.
The reality is that you can get cheap labour in the Philippines and the savings are considerable. However, if you focus only on the cheapest solution, it is highly likely you won’t get the experience you bargained for.