Why Outsource Software Development To The Philippines

Last Updated on 2024-10-11

Why did we choose to outsource software development to the Philippines? Why do we feel the Philippines is the best offshore destination for our clients? We get these questions a lot.

Let’s take a step back first and ask a bigger question:

Why Hire Offshore Developers?

Let’s look at the realities of the current market:

• In 2021, US employers listed more than 3.5 million job postings for IT roles (source)
• US labor stats reported 1.4M unfilled computer science jobs in 2020
• 73% of CIOs report that recruiting technologists and filling open positions is among their top concerns (source)
• Nationally, web developer salaries increased by 21.3% from 2020 to 2021 (source), and with inflation and demand being what they are, 2022 isn’t looking better.
• IT industry employment demand through May of 2022 is up 69% over the same period last year (source)
• 72% of IT workers report that they plan to quit their job in the next 12 months (source)
• Recruiters are frequently offering 6-figure signing bonuses for in-demand roles (source). We’ve even heard stories about offers of luxury vacations just for accepting an interview.
• Amazon just more than doubled its base salary cap to $350,000 (source), and other tech giants are making similarly aggressive moves.

To summarize, in the current US job market, developers are extremely hard to find, increasingly expensive to employ, and virtually impossible to hold onto.

So, as a CTO or tech lead, if you need talented developers and you need them now, what do you do? If you can afford $150,000/yr+ salaries, a $100k signing bonus, and a 25% recruiter fee, you can likely poach some great software developers. Just be prepared for them to jump ship within 12 to 18 months.

Our founders at Full Scale faced this problem in 2018 with their tech companies, Stackify and Gigabook. They needed developers but would only get a trickle of applicants when they posted job openings.

When you’re VC-backed with a mandate to scale up and accelerate growth, you’ve got to cast a wider net to fill that talent pipeline. For many tech companies, offshoring is the best way to survive (much less thrive) in the current market.

Why Outsource Software Development To The Philippines?

We’ve done work with developers all over the world. There are talented, brilliant engineers everywhere. So why did we base our international outsourcing operations in the Philippines? Here are a few of the major factors:

The Philippines has been educating a large pool of software engineers

While the US is minting an estimated 54,000 Computer Science graduates each year, the Philippines reported 73,000 new IT grads in 2017. There were even concerns of oversaturating their local market with software developers a few years back. Cebu and Manila have a vast pool of talent to draw from.

Still not convinced? How many applications did you receive for your last developer position? For the open roles we had last month, we received approximately 1,000 applications. We have developed a reputation in the Philippines as a great employer and an exciting place to work, so we’re able to have our pick of the top talent.

Political and Economic Stability

Compared to other parts of the world, things are (relatively) stable in the Philippines. Eastern Europe and Russia have been completely devastated this year. China’s posture toward the United States is increasingly adversarial, and it is notoriously difficult to protect IP. Many parts of Central/South America and Africa are crippled by corruption and hyperinflation.

The Philippines, by contrast, has been very welcoming to American business investment and makes it comparatively easy to do business.

Cultural Compatibility

Historically, the Philippines was a Spanish colony for roughly 250 years. Names of places and people are ongoing reminders of those Spanish roots. It’s also a heavily Catholic country, another thing that the Spanish imported.

In 1898, the Philippines became an official US territory and began to absorb American culture and language. Even after becoming independent, they’ve remained closely aligned with the United States. American movies and music are popular there, and as a heavily Christian country, there’s much overlap with our holidays.

English Language Proficiency

Many schools in the Philippines teach exclusively in English, beginning in elementary school. A considerable part of their economy is built around business process outsourcing (BPO), so English language skills have been built into their educational system.

Our Own Past Experience

We have worked with developers in many countries with mixed results. There are brilliant developers worldwide, but it takes a lot more to build a successful team.

Our experience has been that, on average, our developers in the Philippines have great attitudes, they’re enjoyable to work with, and they are incredibly dedicated. We have clients who have experienced zero churns over their first 1-2 years with teams of up to 10 people. Retention rates like that are unheard of in the US.

If you’re looking for hard-working, talented developers with excellent English skills, the Philippines is a great place to start.

Ready To Hire Developers In The Philippines?

Full Scale can help you do it quickly and affordably if you’re looking to ramp up your development team. Our developers have delivered over 2 million coding hours for clients. We’re fast approaching 300 full-time developers on our team, all working full-time directly for clients.

Our talent portal allows you to browse available candidates based on tested, verified proficiency and schedule interviews in minutes!

To see who’s available to join your team, just take 2 minutes to answer a few questions!