Weighing your IT and accounting outsourcing options: Philippines or India?
Among UK, USA, or Australian companies, the Philippines has become a preferred destination in need of high-quality, cost-effective outsourcing services. The country is known for its skilled workforce, a culture greatly influenced by the West, and strong data privacy laws, providing it a competitive edge in both IT and accounting sectors.
In this piece, we’ll discuss the advantages of choosing the Philippines as a source of offshore accounting and IT talent over another known outsourcing destination, India.
- Talent quality and costs of outsourcing
Philippines: Quality workforce, competitive rates
The Philippines boasts of a highly competent workforce with competitive labour costs, making it a leading choice for businesses looking for outsourcing solutions. Through IT outsourcing in the Philippines, companies can reduce expenses without compromising quality. Filipino accounting professionals, meanwhile, are also known for their deep familiarity with international standards, with education and training that cover US GAAP and IFRS. These provide them a robust understanding of financial practices around the world: a critical factor in offshore accounting in the Philippines.
India: Larger talent pool, inconsistent quality
While India produces a large number of engineering graduates – about 1.5 million each year – to fill its IT sector, the sheer volume can result in inconsistencies in quality. Labour costs for IT and accounting roles might be lower in the country, at around $9,000/year for entry-level workers, but companies will usually need to invest in training for them to meet the standards of their business.
Verdict: For companies looking for a balance between quality and cost-effectiveness, the Philippines offers more consistency, especially in IT and accounting roles which require precision and communication.
- English skills and cultural compatibility
Philippines: High English proficiency, Western influence
Owing to their history, Filipinos are some of the most English-proficient populations in the world, making them ideal for IT and accounting outsourcing. In fact, the country ranks 18th globally in English proficiency – one of the highest in Asia – and English is widely spoken and taught in schools at an early age. The Philippines also has a strong cultural affinity with Western countries, reducing possibilities for misunderstanding and helping align service expectations, especially in client-centric roles.
India: Good English, less cultural alignment
In India, English is a primary language of business, particularly in urban areas. But Indian workers may need additional training – more than their Filipino counterparts – to close some gaps in culture and communications.
Verdict: The Philippines’ cultural compatibility and high English proficiency provide a distinct advantage for businesses considering offshoring to the Philippines, particularly in client-facing tasks and communication-heavy roles.
- IT and accounting education and competencies
Philippines: Growing IT expertise, high standards in accounting
The Philippines produces highly skilled IT and accounting professionals who are deeply familiar with international standards. Indeed, Filipino professionals are known worldwide for their commitment to quality and reliability.
India: Known for IT skills, less specialised in accounting
India became a global leader in tech services because of its strong technical education system, especially in IT; the country offers a vast talent pool and expertise for large-scale software development. But for accounting, the Philippines offers offshoring partners an advantage, due to its alignment with international standards.
Verdict: The Philippines offers companies focused on accounting or customer-facing IT services, highly competent professionals ready for global standards.
- Data Security and Privacy Compliance
Philippines: Strong Data Privacy Law
In the Philippines, the Data Privacy Act of 2012 provides for comprehensive data protection. It gives businesses the confidence in the security of their sensitive information, as strict penalties are imposed for data breaches. Companies interested in outsourcing to the Philippines can then rest assured that personal as well as corporate data are treated with a high degree of care.
India: Developing Data Privacy Regulations
India’s also has a fairly recent Digital Personal Data Protection Act (2023), which has strengthened its data privacy landscape, but is still evolving. The Philippines, then, provides a more established framework for businesses looking for a secure data environment for IT or accounting outsourcing.
Verdict: Because of its more mature data privacy framework, the Philippines is better suited to respond to a strong demand for data security in industries like accounting and IT. This also boosts their appeal as an outsourcing destination.
- Time zone compatibility, working hours
Philippines: Adaptable to North America and Asia-Pacific, UK’s second shift
The Philippines’ time zone (UTC+8) bodes well for real-time collaboration with North American and Asia-Pacific businesses. Filipino outsourcing companies, especially those in offshore IT, can often offer 24/7 support; night shifts allow for service availability across different time zones. In the Philippines, UK time is the favoured ‘second shift’.
India: Better for Europe, but Less Overlap with US
India’s time zone (UTC+5:30) is ideal for European clients, but there is limited overlap with North American companies. Indian firms also offer 24/7 support, but some companies in North America find the time difference less convenient for real-time adjustments.
Verdict: With its time zone, the Philippines is a better choice for companies in North America and the Asia-Pacific seeking offshore accounting and IT outsourcing with real-time availability. UK companies can rely on Philippine teams to work the “second shift.”
Outsourcing to the Philippines: the additional benefits
Lower attrition rates
The Philippines has lower attrition rates in the outsourcing industry than India: Filipino workers are often cited for their loyalty, which means companies have reduced need to train and re-hire, and can expect stable and long-term service.
Adaptable, customer-oriented workforce
Filipino IT and accounting professionals are known for their customer-oriented mindset, which is valued especially in their industries. They are also regarded for their adaptability and responsiveness to the demands of business.
Conclusion: The Philippines is the stronger outsourcing destination
In summary, the Philippines can provide businesses high-quality talent, a strong regulatory environment, and cultural alignment with Western countries, making it the stronger choice for IT and accounting outsourcing:
- Global-standard accounting training: Filipino accountants are prepared to meet the requirements of Western businesses, due to a curriculum that aligns with international standards
- English proficiency and cultural compatibility: The country’s strong English skills and Western-influenced culture make for reduced challenges in communication, and smoother interactions with clients.
- Strong data security policies: The Philippines’ Data Privacy Act upholds secure management of data, which is important for industries dealing with sensitive information such as IT and accounting.
- Time zone advantage: The Philippines has a better overlap with North America and Asia-Pacific time zones, perfect for businesses in need of support 24/7. The second shift, meanwhile, aligns with the UK time zone.
Outsourcing to the Philippines is indeed a robust choice for companies looking to reduce costs, boost efficiency, and find quality talent, particularly in the fields of offshore IT and accounting outsourcing.
