Indians Or Filipinos:

Who is Better to Work With?

There is a lot of discussion throughout the world these days as to where to setup an outsourced operation.  In this part of the world, the two main choices for now seem to be primarily India and Philippines. There are quite a number of people currently living in Philippines who have had experience managing businesses in both countries.  In comparing working with Filipinos with Indians, knowledgeable business people have interesting remarks.

Some of the key observations stated are:

Filipinos are easier to get along with.

Among companies whose businesses involve a heavy customer service component, this is an important issue.  Filipinos are generally considered more accepting of their customer’s imperfections - they don’t yell at people or otherwise treat them unkindly no matter how nasty or dim-witted they might seem.

As one example, a fellow I spoke to headed an IT Outsourcing operation in India for a large American company.  Among the many difficulties he encountered was that every time something went wrong, there were 5 Indians all pointing their fingers at each other to assign blame.  Overall, he felt “It was like dealing with children.”  Keep in mind that these were university degreed professionals.  Such difficulties are much less prevalent in Philippines.

Another fellow who built a large call center operation in India before being posted to Philippines to do the same felt that “Living in India is the most difficult adjustment for anyone -- living in Manila is a great and wonderful life. The Philippine people don't need any excuses -- they are great!! They speak much better English, have little or no cultural gaps, the government is not nearly as difficult as others, the list goes on and on.”

Filipinos have better English communication skills

Different people I have spoken to get nervous when they hear someone is setting up a call center in India.  They feel that Indians have lower quality English communication skills and a much more aggressive manner of speaking that makes providing quality customer service over the telephone more challenging for them.  By contrast, Filipinos are said to have better English communication skills and a remarkable capacity to mimic the accents of the people they are speaking to.  They also feel Filipinos are much better adjusted to western culture.

Filipinos are more trustworthy

This is a bold statement, but one that experienced managers feel is accurate.

Business managers reported higher levels of dishonest conduct in India among the educated and experienced professionals they employed.  The problems cited were usual ones like inflated expense accounts, missing office supplies/equipment, and more serious fraud.  These problems are not absent in Philippines (or anywhere else), but they are said to be much less rampant.

One comment that was stronger than most, but not unusual for India, was that “they were a bunch of rascals.”

Another concern in India has to do with the difficulty of determining whether someone is who they say they are.  The profusion of fraudulent academic and identification documents available in India makes confirming someone’s education and work experience an exercise in frustration.

Filipinos have a broader educational background

This is an interesting observation since many people, including myself, assume India has a very good general education system.  While India does have an excellent technical education system by all reports, graduates of Philippine universities are said by experienced business leaders to acquire an education with more breadth in the liberal arts.

As an example of this, one fellow who develops software for the financial industry said he had great difficulty teaching university-degreed professionals in India about financial statements.  Most did not have a clue what they were for and why they might be important.  The young Filipinos he now employs are able to grasp the basics of financial accounting with relative ease and become productive within a shorter period of time.

Expatriates prefer living in Philippines

Manila is said to be a more pleasant and safe environment compared to India.

Filipinos lack a sense of urgency

On the negative side, Filipinos are said to be slower to move and talk too much to co-workers.  Indians are more intense at their work.  Their more individualistic mind-set makes motivating them through personal recognition easier.  Filipinos, on the other hand, are more group oriented and less stimulated by being seen as a superstar among co-workers.  Their overall performance is considered more average as a result.  This issue is especially important in fields like software development or semiconductor design.

Indians have better technical education

India has built a very strong IT Outsourcing industry.  Companies such as InfoSys, WiPro and Tata Consulting are worldwide leaders in the sector.  A large part of the reason for this is the quality and quantity of educated technical professionals the country creates through their excellent technical universities.

As an aside to this, in North America people in the various technology sectors have joked for years that all you needed to start a software firm or an IC design company was 4 Indian engineers and an American guy to sell.  A few years ago it was reported that close to 40% of Silicon Valley start-up companies were founded by Indians.  Clearly, there are very few groups in the world who have the technical education and the drive to enable them to become such a force in the worldwide technology industry.

The Conclusion:

It seems clear to most people with experience working in both countries that the  Philippines has a publicity problem, not a talent problem.  As one senior call center manager wrote me, “The Philippines is a victim of the India smoke screen. Now that the smoke has cleared and the world realizes that India is one of the most dangerous places to conduct business (rated by an independent agency), people are searching for something better.”

If the information above is true, then the Philippines stand a good chance of growing its Outsourcing industry to 10% of that in India at the very least (since Philippines has 10% of India’s population).  It was recently reported that Indian Software and Service exports grew by a fantastic 26% over the past year to $9.5 billion.  Given that the worldwide information technology services sector grew by only 4 percent in 2003, this is significant.

The bottom line to all of this is that we should all feel good that we are in the right industry in the right country at the right time.  The growth taking place in the Philippine Outsourcing industry seems to be real and not a fad.

Please note: The information reported above is not meant to be an exhaustive analysis based on rigorous statistical methods.  It is simply meant to report what has been heard from various knowledgeable industry sources.

Reprinted with Permission

Richard Mills, CFA

Chalre Associates Executive Search

Tel: (632) 892.6703