India vs. Philippines – Which is a better destination for outsourcing?

Undoubtedly, both India and Philippines are big players in the outsourcing business and there is a lot of competition going around for the projects and over the future. Philippines has emerged as a threat to both India and China. However, this competition has also helped the overall quality of outsourcing industry to grow. Both these countries are working very hard to deliver quality wise and quantity wise. India is a world leader in outsourcing but is the trend changing? Which is a better destination to outsource? Let’s find out.

Workforce Availability
If you compare India and Philippines outsourcing market on the basis of workforce availability then India wins hands down. India is the seventh largest country in the world with over 1 billion population according to 2011 census, whereas, Philippines’s population is just 94 million according to a 2010 estimate. Additionally, in India over 50 percent people are below age of 25 which is a huge advantage. The education system of India produces thousands of graduates and post graduates every year looking for jobs.

English Accent
Although English accent is not essential in all the outsourcing jobs, it still plays an important role. There are several people who speak English but the accent is usually under suspicion. People criticize Indians for having a thick accent which however is improving in the younger generation. On the other hand, the Filipino accent is considered to be of a better quality which has contributed tremendously in its growth.

Labor Rates
The labor rates depend on a lot of variable but on an average the wages in India are much lower than in Philippines. Undeniably, costs are low in both countries but the salary is usually low in India. This is because of the availability of labor, currency rates, competition etc. Obviously, wages depend on the company and type of work.

Technology is another important factor that is going in India’s favor. The data entry jobs are still there in India, but it has been noticed that the outsourcing projects coming in India are growing in terms of complexities. The Indian technological institutes are world class and help in production good talent with technical expertise. Philippines too is catching up in this filed but it still needs to grow a lot to match the IT infrastructure of India. The ISP, networking and telecom brilliance make India strong in outsourcing business.

Government Support
The governments in India and Philippines are open to foreign investment and facilitate globalization. However, Philippines is relatively new in the outsourcing so it has to be seen how the government acts in future.

Looking at the current scenario, India seems a better option to outsource projects in terms quantity and quality. The infrastructure and technology in India is also better with costs. Moreover, the future of outsourcing also seems strong in India because of the population and the average age which is a huge advantage in its favor. In the coming years, Philippines market will grow but it cannot pose a serious threat to jobs in India.