PH BPO Industry Unaffected by US Policy

The outsourcing business has always relied on the cost advantage offered by offshore locations. There are plenty of developing countries where qualified human resources can be had for cheaper. Only the Philippines offers a pool of native English speakers.

Bringing back American jobs that were lost to outsourcing was one of Trump’s election promises. He also promised to do this within 100 days of assuming office.

Donald J. Trump was sworn in as the 45th President of the United States on January 20, 2017. One of his first moves was to impose a 20% tax on cars manufactured in Mexico. This would make imports more expensive and spur domestic production.

Outsourcing is not manufacturing. Business processes require a more skilled pool of talent. Even assuming a similar rate of taxation for the Business Process Outsourcing industry, it would still be cheaper.

According to the Bureau of Labor Statistics, it would cost $149 per day to hire an American worker. The same work can be done in the Philippines for just $9.84. Office space is also cheaper at $13.19 per square meter as opposed to $270 in the United States.

Assuming each worker needs 18.5 square meters (200 square feet), the only way Trump can do away with outsourcing is by introducing a 2700% tax.