For those that have been following my blog for a while know that I’m a huge fan of outsourcing as much of my work as possible. I’ve been outsourcing since I started out online when I was frustrated with trying to learn how to code, which eventually lead me visiting India when I was 19 to meet developers and designers over there.
One area of outsourcing that I’ve not really looked into until now, is hiring people in the Philippines. So today I thought I’d pick the brains of Dan who lives in Manila and employs locals to help build he’s web based businesses.
Dan runs a couple of excellent pod-cast’s that are worth subscribing too… one on lifestyle business and he’s newest venture, a podcast dedicated to outsourcing in the Philippines. You can also find Dan on Twitter.
Whether you already outsource your work or are considering taking the leap, hopefully Dan’s excellent advice below will help.
1. Tell us a little about yourself, your projects and how you got involved with working in the Philippines?
My name is Dan and I am an entrepreneur. I love traveling around and doing business. I’m also a big foodie so it’s pretty obvious why I’m a loyal reader of MyEggNoodles.com. My new hobby is telling everyone how awesome it is to outsource here to the Philippines. I’ve always been interested in outsourcing to scale companies faster. In the past, I’ve set up offices in China and Vietnam, and I’ve worked a lot with remote assistants/developers in India and North America. I’m currently based in Manila, the capital of the Philippines. The prospect of setting up shop in the Philippines’ didn’t show up on my radar until 8 months ago. Once I understood the opportunity that exists here, I got on the next plane and haven’t looked back. If you are interested in following me, here are the best places: LifestyleBusinessPodcast.com, or @TropicalMBA. If you are an entrepreneur and want to outsource to the Philippines, check out outsourcetothephilippines.com.
2. Why did you chose the Philippines over other countries such as India or Thailand?
I’ve met a handful of entrepreneurs here in the Philippines who have begged me to keep a lid on this stuff! 
The world is going to be hearing a lot more from the Philippines in the coming decade.
First, the Philippines is an English speaking country. Everyone speaks English in this country. All the street signs are in English. Television is in English. In the second largest outsourcing hub in the Philippines, Cebu City, they speak a language called Cebuano. Here in Manila, they speak the “official” language Tagalog. I asked my Tagalog teacher what she speaks when she travels to visit her friends in Cebu. You guessed it! ENGLISH. Being an English speaking country gives the average Filipino a huge advantage over non-English speaking countries, not only in communicating via phone or email, but also in understanding Western cultural nuances, copywriting in native tone, and keeping up to date on the latest tech trends and software documentation.
Second, the Philippines have a huge availability of young, well-educated employees. The educational infrastructure is very strong here. There are tons of university educated professionals with exceptional English skills and broad range of highly sough after technical skills, including software development, web marketing, writing, legal, medical training, you name it.
Third, the Philippines is a country with a western mindset and culture. They’ve been colonized by western forces since the 16th century. The Americans only officially stopped governing the Philippines in the 1940’s. In terms of mindset, the Philippines doesn’t feel close to any other Asian country, and a lot of the cultural challenges you face when outsourcing to places like China or India are non-existent here.
Finally, it’s not only the best value outsourcing destination I’ve come across yet, but its also the cheapest.
3. Tell us more about what’s it like to work with the locals over there
Working with my staff here in Manila isn’t too much different than working with folks back home. I don’t feel much of a cultural divide here. While the average Filipino obviously has a much different life experience than a Westerner would have, in terms of attitude, approach, and basic understandings we have a lot in common as cultures. I can relate very well to friends and colleagues. If you would have told me that 8 months ago I wouldn’t have believed it.
4. What’s it like to live in the Philippines?
Big question! In terms of logistics, the Philippines is hands down the easiest place for a westerner to navigate. Everything, including court documents, is in English. Every landlord, shopkeeper, and taxi driver speaks English. The visa situation is very friendly and operating a business is relatively easy. Logistically, this is the most welcoming country in Asia for entrepreneurs. If you are in to adventure sports– diving, boating, treasure hunting, island hoping, kayaking, kite boarding– you’ve found your place! The islands and beaches are largely untouched and they are gorgeous. Many SCUBA divers believe the Philippines is the best country in the world for the sport.
Culturally, the Philippines can be a bit of a letdown relative to the rest of South East Asia. As a result, it doesn’t see close to the volume of tourists as its neighbors, and the ones who do come here are generally after either women or SCUBA diving. You also won’t find large groups of relatively young educated professional/academic class expats like you will in other Asian hubs. On the surface, the cultural offerings of the Philippines can be difficult to appreciate. This isn’t a great touring spot if you are in to history, food, or urban centers. All of the best restaurants are located in malls (incredibly awesome malls, if you are in to that sort of thing), there isn’t the great street food that you get accustomed to in the rest of Asia, and the architecture, ambiance, and filth of most of urban areas is positively depressing.
Part of the reason I ran the Tropical MBA program out of Bangkok is that I thought Manila would be too difficult a transition and not enough fun for an inexperienced world traveler. What’s exciting about Manila, and the Philippines in general, is the people (Filipinos are super cool and fun people), and the sense of opportunity you feel here. Also, the live music is incredible.
5. Do you think someone needs to be based in the Philippines if they have employees there? Or could this be done remotely? In your opinion, what are the benefits of the 2?
Its definitely not necessary to be based here to have employees or even an office. I think all the traditional advantages of having or not having an office apply.
6. Do you need to set up a company to work in the Philippines?
You do not. You can hire freelancers that can work for you as independent contractors. Labor laws here in the Philippines are very flexible and business friendly. If you’d like to incorporate here in order to set up a higher profile operation– say a call center with lots of office space– there are many, very reasonable ways a foreigner can set up an entity, securely stay in the country indefinitely, and manage most of the cash that flows through organization. Take that Thailand!
7. In Thailand, someone without a work permit is not allowed to work (although it goes on everywhere, especially those that work online) – even without any Thai’s involved. Are you saying it’s completely legal to work from your home or is the situation similar to Thailand?
The Philippines is incredibly business friendly and is actively seeking out foreign investors. Just in passing I saw some deal in Cebu where you get a free lifetime visa if you employee over 10 people. I’m not sure if that anecdote is true, but the spirit of it is in line with my experience here. I know countless entrepreneurs who create and manage a lot of cash within the country. Disclaimer: please don’t take my advice on the technicalities of your own visa situation, its definitely worth your own due diligence. The situation is nothing like Thailand, where I’d much prefer to live (I love Bangkok) and might even have set up my business there if it wasn’t such a pain.
8. What are the associated costs with setting up a company/office in the Philippines?
There isn’t one way to do this. You’ll need to consult with folks who’ve been there before and can help you organize your entity in a way that will keep you secure. You don’t necessarily need to incorporate in order to operate out of an office, either. In terms of official licensing fees, its very cheap. Office space rent varies dramatically based on your location.
9. If someone doesn’t want to open up an office, where do you recommend setting employees up to work? From home?
I’ve been in the country working remotely with my team since September! I occasionally meet with them in person to have diner and socialize. I’m only now looking for office space. It’s totally doable, you just need to find ways to ensure you are being productive. We have daily Skype “office hours.” In general, I think its much more productive to have an office, so as my team gets larger the costs of space become smaller than the cost of lost productivity.
10. What can one expect to pay developers, copy writers or designers in the Philippines?
A decent starting salary for a college grad in computer engineering is $220USD monthly. PHP developers are more expensive starting generally at $350 and anywhere to $1000 depending on experience. There is really a broad range. Computer animators start at $220USD. Folks who are more connected to freelancing style internet work can have some inflated rates. You can get really talented people with SEO, Copyriting, HTML, CSS, Photoshop, etc. in the $250 to $600 dollar range. Internet and call center workers can tend to make more than traditional professional, for whom $200 bucks is a great payday. Salaries outside of Manila can be much more affordable.
11. I know you’ve gone over this is a podcast, but can you quickly give us some tips on finding talent in the Philippines?
I’ve been telling everyone this is a great business opportunity. There isn’t a good, cheap solution with a critical mass of users that I know of. The biggest site for jobs in PH far and away is Jobstreet.com. It is the end all be all. Its a relatively expensive subscription service but if you need results, its the place to go. Besides that, I suggest getting scrappy. Blogs, forums, online boards. Most of my talent comes from networking and I’ve received tons of referrals.
12. What are your top 3 tips you would give to someone who is considering outsourcing their web development work to the Philippines?
Do it. Do it. Do it. Okay, kidding.
1. If you can afford it, come here to the Philippines and meet your team. I believe there is a huge long term opportunity available to entrepreneurs interested in the Philippines. Advancements in digital communications are making it possible for most business processes to take place anywhere on the globe. The Philippines has the absolute highest availability of super affordable English speaking trained, westernized people on the Globe. If you are an entrepreneur, you are sure to find some value.
2. Outsource Higher Level Tasks Than You Feel Comfortable With – Forget just sending off a bunch of article writing tasks. Consider hiring someone to coordinate your entire content campaign for you. Filipinos are sharp, they know about the web, and they can communicate with you 100%. I treat my guys (and gals) just like I would a California employee, and they are just as talented. I am lucky enough to have a layout designer on staff who does better web layout work than any designer on my staff in California (that’s 6 highly trained California designers!).
3. If you are frustrated with outsourcing, give it another chance. I’ve tried to do this stuff in India and had some bad experiences with it. If you haven’t yet tried to find employees in the Philippines, its a totally different scene and I believe the chances of it working out are might higher. Focus on hiring employees, not task-specific robots, and you’ll soon find a group of very affordable people on your team working with you to grow your business.
Thanks Dan!
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