March 6, 2025

• Businesses can save up to 60% on labor costs by hiring offshore staff in the Philippines compared to local hiring.¹  

• Sectors such as human resources, content production, data management, IT development, and financial technology services gain most from offshore staffing. ² 

• Companies like American Express, Google, and UnitedHealth Group have successfully reduced operational costs through strategic offshoring to the Philippines. ³ 

Companies are continually seeking strategies to reduce operational expenses while maintaining high-quality services. Offshore staffing has emerged as a viable solution, with the Philippines standing out as a premier destination due to its skilled workforce, cultural compatibility, and significant cost advantages. 

In the recent Global Shared Services and Outsourcing Survey⁴, Deloitte reported that 60% of organizations have increased the scope of their existing service centers to the extent of outsourcing. The Philippines is included in the list of Top 10 most preferred locations for workforce outsourcing, together with India, Poland, and Mexico.   

Let’s take a glimpse of the cost comparison between offshore and local hiring, the industries with the highest potential for savings, and examples of companies that have successfully implemented cost reduction strategies through offshoring to the Philippines. 

Cost Breakdown of Offshore vs. Local Hiring 

The financial benefits of offshore staffing in the Philippines are substantial. Based on a sample computation of outsourcing solutions provider SuperStaff, the stark difference in labor costs between the Philippines and the U.S. makes a compelling argument for offshoring. Here is a labor cost comparison. 

Philippines 
Median Salary (Outsourcing/Offshoring roles): PHP35,000 (approx. $620/month) 
Annual Cost (including benefits): $10,000 – $12,000 per employee 

United States 
Median Salary (Customer Service Reps): $3,000 / month depending on region 
Annual Cost (including benefits): $50,000 – $70,000 per employee 

Savings: 76% to 86% 

In this scenario, the savings when hiring in the Philippines compared to the USA can range from approximately 76% to 86% in labor costs alone. Imagine cutting your expenses starting by 60% up to 80% from salaries, operations, and infrastructure.  Outsourcing to the Philippines can make this a reality as we assist you in tapping the huge potential of the skilled Filipino workforce. 

In a similar analysis of offshore staffing company KDCI Outsourcing⁵, the Philippines presents a compelling opportunity for businesses seeking to reduce labor costs.  With a lower cost of living and correspondingly lower salaries and wages, companies can realize savings of 60% to 80% compared to onshore operations in developed countries.  Consider the difference in hourly rates: $20 to $80 for US-based offshore companies versus just $5 to $15 for skilled Filipino offshore staff.  

Philippines 
Hourly Rates: $5 – $15 

United States 
Hourly Rates: $20 – $80 

Savings: 25% to 94% 

With potential savings of $5 to $75 per hour compared to US-based hiring, offshore staffing from the Philippines offers significant labor cost advantages. Furthermore, Philippine government incentives, including tax holidays and exemptions, can further reduce operational costs. While precise savings vary, offshoring to the Philippines is widely recognized as a cost-effective strategy for businesses seeking to lower labor expenses without sacrificing quality. 

Industries with the Highest Cost-Saving Potential 

The top 10 functions, spanning various business areas, that offshore talents perform based on Deloitte’s global analysis are:  

1. Finance

2. Human Resources 

3. Information Technology 

4. Procurement 

5. Tax 

6. Customer Service 

7. Supply Chain / Manufacturing Support 

8. Legal 

9. Real Estate / Facilities Management 

10. Sales & Marketing 

Deloitte reported that offshore workers commonly handle these 10 business tasks: finance, HR, IT, procurement, tax, customer service, supply chain, legal, real estate, and sales/marketing. (2023 Global Shared Services and Outsourcing Survey – Deloitte) 

Key finance processes like accounts payable, accounts receivable, and fixed asset accounting remain highly prevalent. Similarly, payroll processing and recruiting/staffing administration are increasingly handled through offshoring human resources.  In the IT realm, the service desk continues to be a primary function, while supplier master data management is also gaining traction as a common offshore responsibility. 

In terms of industries with great cost-saving potential in the Philippines, customer service, IT and healthcare are among the fields with the best performance.  

Its strong customer service reputation allows companies to maintain high-quality support while reducing labor expenses. In IT, offshoring can lead to savings of up to 60% on employee costs, encompassing payroll, benefits, healthcare, and management.  Similarly, the healthcare sector can also achieve up to 60% savings on operational costs by offshoring to the Philippines. 

Successful Companies That Adopt Philippine Offshoring 

Several multinational companies have successfully leveraged offshore staffing in the Philippines to reduce operational expenses. Here are five different, successful companies that have built their teams in the Philippines as indexed by business process outsourcing firm Unity Communications⁶. 

1. American Express  

The globally integrated payments company has leveraged Philippine offshoring to focus on its core competencies. By outsourcing non-primary functions, such as customer support and collections, to Filipino offshoring companies, they minimize delinquencies, improve cash flow, and, most importantly, free up resources to concentrate on expanding international trade and maintaining competitiveness in the global market. 

2. UnitedHealth Group 

To reduce operational costs, UnitedHealth Group, an American multinational for-profit company specializing in health insurance and health care services, outsources a variety of non-clinical functions to talent providers in the Philippines. These outsourced services include project management, analytics, customer service, and engineering, enabling the healthcare company to enhance scalability and advance its technical capabilities. 

3. Facebook 

Social media giant Facebook employs Filipino professionals to handle immense volume of user-generated content and to expedite the content moderation process. This cost-effective approach, compared to expanding its in-house team, allows Facebook to efficiently manage the flow of posts, videos, and images while also taking advantage of favorable tax and regulatory incentives offered by the Philippine government. 

4. Google 
American tech multinational Google utilizes Philippine offshoring to access specialized expertise and augment its workforce. By hiring Filipino contract workers, the tech giant cost-effectively fills skill gaps in areas like IT support and data analytics. These contractors provide support during staff leave, increased workloads, and special projects, forming a significant part of Google’s extended workforce, which includes 3% temporary workers and 0.5% independent contractors. 

5. Wells Fargo 

Wells Fargo, an American financial services company, partners with Philippine talent providers to gain access to skilled, English-proficient professionals. This collaboration allows the financial institution to streamline critical functions such as fraud management, financial accounting, payroll support, and customer service. Leveraging the time zone difference, Wells Fargo utilizes Filipino agents to provide round-the-clock customer support, ensuring prompt responses to customer inquiries even outside of traditional banking hours. 

Are you ready to unlock the same potential? 

The Philippines has become a leading destination for companies seeking to optimize costs through offshore staffing. Deloitte’s research highlights the growing trend of expanding service centers and outsourcing, with the Philippines consistently ranking among the top choices. The substantial cost difference between hiring in the Philippines and developed countries is a key driver, with potential savings ranging from 60% to 86% on salaries and 25% to 94% on hourly rates.  This advantage stems from lower living costs and competitive salary structures in the Philippines.  Industries like finance, human resources, IT, customer service, and healthcare have found significant success with this model, leveraging Filipino talent for various functions, from customer support and IT services to complex financial processes. 

Xelure Technologies eliminates the risk of finding the right talent by handling the entire process for you. We don’t send you freelancers; we build dedicated teams tailored to your specific needs.  Our rigorous screening process ensures that every hire is not only skills-fit but also culturally compatible with your company. You get full-time, direct employees committed to your success, without the headaches and uncertainties of traditional hiring. 

Partner with Xelure Technologies and establish a cost-effective center of excellence in the Philippines. We’re more than just an offshore team; we’re your strategic partner, dedicated to fueling your business growth. From talent acquisition to ongoing support, we provide the expertise and infrastructure you need to scale efficiently and confidently. Unlock new levels of productivity and profitability with a dedicated team of top-tier talent, working exclusively for you. 

Are you ready to unlock the potential of your business? Contact us today to explore how we can help you find the perfect Filipino talent to meet your specific needs and drive your company’s success: https://xelure.com/ 
 
 
 
References:

1 How Up To 60% Savings Are Achieved by Outsourcing to the Philippines
https://www.superstaff.com/blog/philippine-bpo-cost-advantage

2 How Cost-Effective Is Offshoring Talent to The Philippines?
https://penbrothers.com/blog/cost-savings-offshoring-philippines

3 Real-World Examples of Philippine Offshoring and Its Benefits
https://unity-connect.com/our-resources/blog/examples-of-offshoring

4 2023 Global Shared Services and Outsourcing Survey
https://www2.deloitte.com/us/en/pages/operations/articles/shared-services-survey.html

5 How Much Can You Save By Offshoring Staff to the Philippines?
https://www.kdci.co/outsourcing-blog/post/how-much-do-companies-save-by-offshoring-to-the-philippines?

6 Real-World Examples of Philippine Offshoring and Its Benefits
https://unity-connect.com/our-resources/blog/examples-of-offshoring/