Outsourcing Insider

Q1 Results Reveal Profitability Strategies for Bulls and Bears

@Hankat. Make sense. No wonder smaller companies who are willing to take on small profits seem to be doing better than huge ones. You are right in saying that outsourcing “cuts labor costs and generates products in greater number if not better”.

Q1 Results Reveal Profitability Strategies for Bulls and Bears

@Alchemist118. I agree. The companies need to understand how they can change to survive or better yet to be profitable. If the current fiscal policies in their country is making their business less competitive then they have options of relocating them. If they think that demand for their products are not sufficient to sustain the business they can find another product offering or lower its cost to increase demand. There are so many options; it’s just a matter of courageously trying these alternatives.

Q1 Results Reveal Profitability Strategies for Bulls and Bears

@Freya. I agree with you. It’s not just about cheap labor but quality cost efficient labor. Clients naturally want value for their money. Richard Mills, president of Canadian Chamber of Commerce, reiterated that “the Philippines is a good place to do business for companies that are reducing cost and IMPROVING QUALITY. There are talented people with good English skills and lifestyle opportunities here are huge.” Another sign that they value and recognize quality at a good price is their continuous expansion here in the country. Convergys is planning to hire 1,000 more workers in Cebu this year for instance. If the quality of this cheap labor is below expectation then firms would naturally not push for expansion.

Philippines Outsourcing Targets Europe

@chsagala. Currently, 90 percent of the outsourcing contracts of the Philippines are coming from the US which brings thousands of jobs to Filipinos. Europe signed outsourcing deals which amounted to $40.9 billion which was even higher than Americas $26.6 billion so imagine if the Philippine outsourcing can take just a slice of that $40.9 billion. Although, I doubt that it can alleviate poverty. These European firms would naturally expect high quality employees which are quite rare for the poor. The challenge really is for the Philippine government to invest in human resource development by creating well researched programs for students and working professionals that will equip them in taking a post in a competitive outsourcing company. The TESDA programs are a good start. However, they only provide short courses and basic levels.