As outsourcing continues to grow as a tool to access new ways to cost save, have access to affordable resources, or just simply time for the small business owner to grow his company we see that in the Philippines is one of the first destinations that the outsourcing model favours.
Outsourcings number one function is inevitably cost savings mostly down to labour costs in one’s own country anyone with an ounce of economics would presume that wage pressures in the Philippines would soon make that a squeezed margin. So in the good old fashion of CKSD Solutions, we thought let us take a closer look and answer that question for you with no bias as we are an outsourcing company based in the Philippines
As a baseline lets have a look at some historical data. The job market and the average salaries in the Philippines have been on an upward trend over the years. In 2014, the United Nations Economic Commission for Europe statistics (UNECE) reported that the average monthly wage in the Philippines was $379 as against the world average of $1480. let’s just digest that that’s less than $100 a week. Projected to become the 16th largest economy in the world by the year 2050, the Philippines is currently the second largest economy among Asian countries as per the International Monetary Fund data.
The Trading Economics estimates that the gross domestic product (GDP) per capita is projected to reach $2648 by this year and $3000 by 2020. The services sector is the major contributor to the GDP, with some of the major industries being IT/BPO, food processing, travel and health care. With a low cost of living and 6.2 % projected growth in the economy, the emerging strong markets of the Philippines is a great place to look for business growth opportunities.
In 2016, the National Wages and Productivity Commission set down the minimum wage as $9 for both agriculture and non-agriculture workers. According to National Hourly Rate Data, the hourly rate in Manila for a graphic designer is $3, while a customer service representative would earn $2 per hour. Web developers, on an average, earn $8 per hour.
On an average, engineers who have 3 to 5 years of experience earn around $1,000, which is similar to what chemists and clinical operations manager in healthcare earns. Human Resource managers with 3 to 4 years of experience earn about $1,600 while payroll clerks earn between $240 to $360 per month.
BPO Employee Incomes and Salaries
The Department of Labour and Employment (DOLE) quoted a study done recently by the Bureau of Local Employment (BLE) to say that the BPO industry continues to offer the most number of jobs in the Philippines, the IT and BPO sector was reported to be the second largest source of income in the Philippines by the Information Technology and Business Process Association of the Philippines (IBPAP).
The Wills Towers Watson reported that the average salaries in the private sector increased by 5% in the Philippines. (The Philippines Salary Guide published by Business Trends quotes the latest salary figures in the Philippines at various levels in the IT/BPO sector).
Philippines was declared as the world’s BPO capital in 2014. The annual salary is $ 4000 a year for a call centre agent who is a fresher,
Entry-level salary for non-voice, technical staff in the BPO sector is approximately $ 200 per month, it can go up to a maximum of $ 280. A technical support representative would earn $ 280, as quoted in payscale.com. The top salary of $ 700 is in the IT sector, followed by $ 540 to $ 580 for legal professionals.
The IT industry is the highest payer for both fresh graduates and for those with more than 5 years of experience. The Annual Salary Report of Jobstreet reported that a salary of $ 480 was the average for fresh graduates in IT. The designations in the entry level in IT could be Net developers, Android developers and business security assistants. IT Helpdesk and technical assistants are some other designations in the entry level.
The junior designations in the IT sector include systems administrator web developer and software developers.
One of the top paying BPO call centre companies is reportedly CBPS (Citigroup Business Process Solutions) with a pay of $ 600 with added commissions. Convergys is another major BPO company that pays $ 400 for a fresher or those with one year experience. The bonuses and other benefits offered by these companies are also better than most other BPOs.
Experienced IT-BPO employees earn between $300 to $400, while team leads earn $600 on an average per month. A call centre customer service employee, who has between 1 to 4 years of experience, earns a minimum of $ 240 and a maximum of $ 350 per month.
In the IT sector, a systems analyst with 3 to 5 years of experience would earn $ 800 while a systems administrator earns $600 per month.
A Project Manager or Assistant Manager with 2 to 4 years of experience earns $1,800 while Senior Project or Program Directors with 12 plus years of experience earn $5,000. A call centre employee who is in a senior position with 5 years of experience earns $340 to $500per month. Chief Information Officer, Senior IT Manager, Senior Delivery Manager are some of the designations that are in the managerial positions.
The net monthly income for the more experienced is between $1,300 to $ 2,500 for executives. Professionals with 1 to 5 years of experience earn about half as much as the seniors with $700 being the average income in the IT sector.
Virtual Assistant Salary
Virtual assistants perform a range of tasks depending on their skill sets. General virtual assistants do not have highly specialized skill sets and perform routine administrative tasks. Article writers develop content for social media, blogs and video blogs. General virtual assistants are hired for tasks such as email filtering, blog management, transcription, data entry and flight booking. Other tasks they perform include managing social media, creating auto-responders for emails, manage blogs and shares on social media.
SEO specialists are virtual assistants who are skilled in keyword research and optimization, link building and market analysis. Web developers create and maintain business websites and WordPress blogs. Audio and video editing, graphic designing are other jobs that virtual assistants take up.
The VA salaries depend on the skill sets and can vary from $300 to $ 1,000 per month. Most virtual assistants with 2 or more years of experience earn an average of $6-$8 per hour. Virtual assistants with more than 7 years of experience charge $13 to $15 per hour. Graphic designers and SEO specialists earn between $360 to $400 per month. Software programmers are paid $ 700 onward, depending on their experience. Accountants earn between $200 to $500 while copywriters can earn $400 per month on an average.
Specialized Skill Salary
The 2017 Global Salary Survey conducted by Robert Waters showed a 40% increase in the salaries paid to specialized and highly skilled professionals in 2016. The figures may go up further in 2018 and there could be a 20 to 50% hike according to the survey report. The survey also predicts an increase in the demand for highly skilled professionals for mobile, cloud-based and analytics domains. Specialists in the IT industry including IT consultants earn $1,200 on an average while senior software engineers and programmers earn $2,000.
Project Based Output
The service provider or agency handles all the tasks involved in the project so that the desired outcome or output is achieved. Instead of hiring a full-time VA, many companies prefer to pay per project or output.
Single projects like web designing or animation are paid a flat fee that is based on the agreed specifications. The fee could be on an hourly basis or based on the outputs like the number of words entered in a data entry project or transcription. Projects that come under this category of outsourcing include the designing of websites or mobile apps, content marketing, transcription services, data entry, photo editing and graphic designing.
Content writers, on an average, are paid $5 per article for a fixed number of words, with the pay going up to $11 to $15 for more experienced writers. Mobile app development project can cost between $800 – $1,400 a month. A website creation project could cost on an average $ 600 depending on the complexity and skills involved.
Income and Salary Comparison to 1st world countries
The minimum wage in the Philippines is P 491 which translates to $9 per day [or about 1.12$ per hour]. In comparison, the minimum hourly wage in most states on an average in the US is between $7 and $10.
In the outsourcing industry, the average wage at entry level in the Philippines is $1.50 per hour, which is still way below what the workers in the 1st world countries are paid. In Australia and Canada as well, US$16 to US$20 is the minimum wage for workers.
Even experienced workers at the supervisory or managerial level in the Philippines earn between $3 to $7 per hour, which is still way below the minimum wages in most 1st world countries.
A call centre agent in the US would get paid between $9 to $16 per hour, while overtime compensation is between $11 and $25 per hour. In the Philippines, a call centre agent earns $1 to $3 per hour. Overtime pay is between 0.65 cents to $4.
The International Labour Organization (ILO) released the monthly average salaries of around 72 countries. The average monthly wage is around $3,000 in most 1st world countries, including UK, Norway, Sweden and Denmark. In the Philippines, as per the ILO figures, the average wage is $279.
Philippines accounts for 12 to 13 % of world’s BPO business currently. By 2020, that number is projected to reach 19%. Known as the sunshine industry, BPO is the major contributor to the fast-growing economy in the Philippines.
In the last decade, the BPO sector has witnessed a 10 % annual growth rate. The IT and BPO sector is the second-largest contributor of foreign exchange. Over $25 billion is earned in foreign exchange currently through the BPO industry. The BPO boom in the Philippines is fueling the growth of associated sectors including real estate and consumerism.
The Philippines government to has played a supportive role by bringing in Data Privacy and cybercrime prevention acts that protect disclosure of personal information and Internet frauds.
The Commission on Higher Education has created a specialized skill development program called Service Management Programme (SMP) to equip students with the necessary skills to enter the IT/BPO industry. Tax incentives and lower lease rates are other factors that have helped fuel the growth of the BPO sector. Legislation has also come in to ensure a minimum Internet speed of 20 Mbps for fixed broadband with a penalty, also fixed, for speeds lesser than this.
Wow so you have managed to read to here, I hope this has been educational, my last thought is this, would an extra $50 to $100 per month really make a huge dent in your bottom line if wages increased by that amount locally here, to most of you I guess not too much. So the end of the story is this on the ground in our company we do try to beat the national average as these are just maths at the end of the day, for us its about attracting good talent and keeping them, CKSD Solutions not only wants to help your company but we are passionate about helping our own community grow and prosper to.
If you are fascinated by the figures above and think ok let’s outsource then contact me on my email below or just have a look at our cool website. Speak soon.
www.cksdsolutions.com or firstname.lastname@example.org