Knowledge Process Outsourcing, a part of the outsourcing industry, is when a company hires an external vendor to manage its core and information-related business tasks.
One of the major outsourcing destinations for knowledge process services is the Philippines because of its talented workforce and cost-effective services.
However, before you decide to engage with a knowledge process outsourcing in the Philippines, study the risks and opportunities associated with it.
In this article, we’ll cover the six key benefits of KPO Philippines and the top KPO services in the country. We’ll also introduce six popular KPO service providers in the country.
Table of Contents
- 6 key benefits of outsourcing knowledge processes to the Philippines
- 6 top KPO companies in the Philippines
- 6 best KPO service providers in the Philippines
Let’s get started.
6 key benefits of outsourcing knowledge processes to the Philippines
The Philippines’ outsourcing sector is known for its thriving BPO industry. The IT and Business Process Association of the Philippines (IBPAP) reported that the market’s revenue grew by 10.3% to $32.5 billion in 2022. IBPAP cited growth drivers in finance, healthcare, retail, tech, and telecommunications.
The KPO industry, an offshoot of business process outsourcing (BPO), is drawing on the robust Philippine outsourcing ecosystem and showing tremendous potential.
But what is the difference between KPO and BPO?
The KPO sector requires employees with specialized knowledge in a particular field and typically involves research-oriented and core tasks. On the other hand, BPO services demand administrative skills for simple non-core tasks.
Here are the six benefits of partnering with KPO services companies from the Philippines:
1. Offers cost-effective services
The expenditure of running a business in the Philippines is significantly lower than in other countries like the USA and Switzerland. The low real estate, telecommunications, transportation, and labor cost reduce the overall operations budget.
For example, the average salary in the Philippines is PHP 161,847.60 per year (USD 3,218) for legal professionals, whereas the same is USD 95,100 in the USA.
Likewise, the rental cost in a highly sought-after region in New York is USD 82.56 per square foot. But the same in Metro Manila is only 1,045 Philippine pesos per square meter or around USD 1.8 per square foot.
This means that KPO vendors in the Philippines can offer services at lower costs, helping their clients save money.
2. Access to skilled labor force
Since KPO services are knowledge-specific, employees need to be highly skilled and experts in their domain.
Luckily, the Philippines has a strong education system that nurtures a skilled workforce. According to the 2022 Times Higher Education (THE) Impact Rankings, fifteen Philippine universities are among the world’s best higher education institutions (HEIs).
The country also has 1,949 higher education institutions and, as a result, a large number of skilled college graduates.
In the Global Skill Index report 2022, the Philippines ranked 70th, above leading Latin American outsourcing hubs like Mexico (89th) and Chile (72nd).
Moreover, the Philippines ranked 51st on the 2021 Global Innovation Index (GII) among 132 countries. According to the report, the country’s strong areas include knowledge and technology outputs, business sophistication, and innovation.
The Philippines also ranked 58th out of 125 countries on the 2019 Global Talent Competitiveness Index (GTCI) by the French business school INSEAD.
As a result, it’s easier to find talented knowledge process outsourcing professionals at competitive rates in the Philippines.
3. Supportive government policies
The PEZA (Philippine Economic Zone Authority) has built special economic zones in Cebu City, Laguna, Baguio, and other cities to attract and encourage foreign investors.
Additionally, businesses registered under the Special Economic Zone Act of 1995 and the Corporate Recovery and Tax Incentives for Enterprises Act enjoy fiscal incentives.
Here are a few incentives offered by the Philippine government:
- Four to seven years of Income Tax Holiday depending on the location and industry.
- Export companies have only 5% Special Corporate Income Tax or enhanced deductions for 10 years.
- Lets foreign companies import equipment, raw materials, spare parts, and accessories tax and duty-free.
- Offers domestic sales allowance of up to 30% of total sales.
- Provides an exemption from payment of local government taxes.
Additionally, the country’s Bureau of Investment (BOI) gives the foreign company 100% ownership of their businesses – further boosting the attraction of foreign investments.
The above schemes aim to develop these regions into industrial hubs for different sectors like banking, ICT, etc. The growing domain expertise of the local businesses in these sectors then paves the way for corresponding KPO services.
4. Robust infrastructure
The Philippines has financially attractive real estate prospects in both urban and rural areas. This contributed to its ranking 9th on the 2021 Global Services Location Index (GSLI), above developed countries like Germany, Japan, Canada, and others.
Additionally, the Philippines has been upgrading its infrastructure in the past few years. The country is investing in roads, bridges, and other large-scale projects. The Philippine government also has better budgets for public information technology infrastructures, such as e-invoicing and digital national identification cards.
By 2025, the number of mobile subscribers in the Philippines will reach 159 million, and broadband subscribers will be around 10.8 million. This implies that the country’s advancement in digital infrastructure has triggered rapid progress in its digital economy.
As a result, Philippine super cities like Quezon City, Davao City, etc., are witnessing an increase in KPO firms. These firms effectively leverage the country’s booming infrastructure to offer top-notch knowledge and business process services.
5. Friendly culture
Filipinos are generally hospitable and friendly and have a strong familiarity with western culture. So they accept foreign colleagues and outsourcing partners without any prior perception.
Besides, English is widely spoken in the country, minimizing language barriers. This also makes it easy for global clients to avail themselves of the Philippine KPO expertise for their knowledge-intensive tasks.
6. Economic stability
The Philippines has a strong economy with an annual GDP (Gross Domestic Product) growth rate of 8.3% in the first quarter of 2022. This value is higher than that observed in other popular outsourcing destinations like South Africa (3%) and India (4.1%).
Additionally, Trading Economics predicts the country’s annual GDP growth rate to be 6.8% in 2023 and 6.5% in 2024.
This economic stability helps strengthen the local business climate and attracts more foreign investments, boosting the overall outsourcing sector.
As a result, both foreign companies and local clients can rest assured that their partnership with a Philippine KPO provider will be stable and fruitful.
Check out our article for more information on outsourcing to the Philippines.
Now, let’s look at the KPO tasks that are mostly outsourced to the Philippines.
6 top KPO companies in the Philippines
Some knowledge-intensive business process tasks can be time-consuming, and outsourcing them can give your in-house team more time to concentrate on other important tasks.
Here are six common KPO services in the Philippines:
1. Banking and finance
Banking and finance services are the leading knowledge process outsourcing tasks in the Philippines.
Knowledge process outsourcing companies provide underwriting, training and consulting, profit and loss, risk mitigation, and other BFSI (Banking, Financial Services, and Insurance sector) related services.
They also offer industry-oriented finance services like strategic research, market research, analytics, and competitive intelligence monitoring.
2. Healthcare and medical services
According to Statista, in 2021, there will be over 88.5 thousand nursing graduates and 28.8 thousand physicians across the Philippines.
Due to the abundance of skilled employees in the sector, global healthcare companies outsource their KPO services to the Philippines.
Some common knowledge process outsourcing services in the country include health and wellness analysis, research and development of healthcare services, genetic profiling, diagnostics, and more.
3. Pharmaceutical research and development
Many Chinese pharmaceutical firms have set up their R&D in the Philippines due to low rental and operational costs and adept scientists.
Pharma KPO firms provide tasks like genetic profiling, diagnostics, oncology tests, HIV tests, and allergy tests.
4. Animation and design
The Philippines also attracts global clients seeking low-cost animation and design services as its animators and designers are known to provide incredible value. The main markets for Philippine KPOs in this sector include the United States, Western Europe, Japan, and Australia.
Animation companies in the Philippines mainly focus on flash animation, web design, graphic and art design, mobile application design, and more.
5. Content writing and development
Two-thirds of the population in the Philippines is fluent in English, and it ranks 18th in English Proficiency. As a result, it’s a great outsourcing solution for foreign companies looking for help with their content writing and development work.
The most commonly outsourced services include content production, digitization, editing, proofreading, and publishing.
6. Legal services
The Philippines has many KPO firms in the legal domain. Specialized knowledge processes outsourcing companies in this domain commonly offer legal and paralegal services like e-discovery, contract management, compliance, legal research, intellectual property, and due diligence.
Now, let’s look at the best knowledge process outsourcing companies in the Philippines.
6 best KPO service providers in the Philippines
Here are the six popular KPO service providers in the country:
1. SourceFit
SourceFit, headquartered in Metro Manila, is a KPO company specializing in legal, finance, and IT sectors. The company lets you hire services on a monthly and hourly basis.
Key services
- Offers data collection and searching, organization, mining, and end-to-end management.
- Conducts insurance and risk analytics, fixed income research, equities research, and more for the BFSI industry.
- Guides you to form your own corporate company in the Philippines and manages that entity according to your specifications.
- Manages documents and legal transcription, coding, tagging, document discovery, etc., for legal firms.
2. FilWeb Asia Inc.
FilWeb Asia Incorporated, headquartered in Laguna, offers virtual process and IT (Information Technology) outsourcing services. The BPO company focuses on providing high-quality KPO or BPO services and great customer service.
Key services
- Offers highly skilled and talented virtual assistants to help with back door services.
- Provides low cost writing and research services that ensure traffic growth.
- Offers a multi-talented and highly qualified team that serves in full compliance with standards.
- Offers flexible working hours and 24/7 customer support.
3. Outsourced
Outsourced, located in Quezon City, offers full-time remote staff offshoring and offshore staffing solutions to companies across the world. It’s an ISO (International Organization for Standardization) certified company that provides high standards for remote outsourcing services.
Key services
- Offers data entry, report management, business analytics, and other services.
- Prepares and proofreads legal documents.
- Recognizes and corrects any issues in software before deployment.
- Offers quality offshore payroll staffing services such as a dedicated payroll officer or payroll administrator.
4. Visaya Knowledge Process Outsourcing Corporation
Visaya KPO Corp., located in Makati, is an outsourcing company specializing in contact center delivery, healthcare information management, and IT outsourcing. The KPO firm aims to be an extension of your company for smoother collaboration.
Key services
- Helps with general ledger and asset management.
- Offers care coordination, better patient navigation, and improved access to care.
- Provides you with outsourced coding through secure web-based processes.
- Offers claim management, HEDIS (Healthcare Effectiveness Data and Information Set) abstraction, medical coding, and billing.
5. Magellan Solutions
Magellan Solutions specializes in customer service outsourcing for small, medium, and large enterprises. This BPO firm is located in Metro Manila and also offers LPO (Legal Process Outsourcing), KPO, and business process outsourcing services.
Key services
- Assists you in back-office services involving human resources, digital marketing, payroll and accounting, and more.
- Gathers, stores, organizes, and maintains relevant information for your business with data entry, mining, and more.
- Captures information faster and turns it into actionable data, certificates, or documents.
- Helps call centers with services such as customer support, answering services, technical support, etc.
6. EnterPH
EnterPH is an outsourcing solution headquartered in Makati, providing all the help a company will need to set up in the country. They offer business registration, bookkeeping, payroll, and other services.
Key services
- Ensures adherence to Philippine laws, like Corporate Code, the Labor Code, and the Consumer Act.
- Offers payroll services to ensure employees receive proper salaries and mandatory benefits.
- Prepares and files tax returns and computes withholdings, VAT (Value Added Tax), and income tax liabilities.
- Guides companies during equity restructuring, declaring dividends, or converting debt to equity.
No matter which KPO company you partner with, you may not know whether its employees are working as productively as you’d expect with your in-house team.
For more transparency, you can use advanced time tracking tools like Time Doctor, which can track the time a knowledge process outsourcing employee spends on a particular task with a manual or silent time tracker.
The tool also tracks an employee’s idle time and, upon crossing a preset limit, shows an idle time popup – nudging them to resume working. You can use this time data to generate accurate invoices and avoid being charged for unproductive hours.
Additionally, Time Doctor generates insightful productivity reports, helping you gauge your outsourcing partner’s performance.
Know more about Time Doctor’s powerful features from here.
Wrapping up
Outsourcing KPO services to the Philippines can help you save money, provide access to a skilled workforce, and help you scale faster.
However, you need to find the right KPO solutions for successful and profitable outsourcing. In this article, we have listed a few popular outsourcing firms offering high-quality KPO services.
Go through their services, and choose one suitable KPO service provider for your business. For transparency, you can use Time Doctor to ensure your outsourcing partner is working productively.
Request a demo today and track your KPO firm’s activities from your company!
Liam Martin is a co-founder of Time Doctor which is software to improve productivity and help keep track and know what your team is working on, even when working from home.