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The Philippines: An unlikely talent hotspot?

London’s strength as a technology hub is not in doubt, with Tech London Advocates highlighting the retail tech and fintech sectors in their most recent report, but there are still areas where the capital could do with some help.

As the cost of living in London rises, and the government’s unfriendly immigration policies for non-EU citizens persist, the shortage of tech talent becomes ever more acute. Even when companies can find people with suitable skills, the salaries they command often put them out of reach of the average tech startups.

However, there is a way that tech startups can get access to high quality developers without having to pay top dollar. The tech scene in the Philippines is very much on the rise, large tech firms like BlackBerry and Google have already moved in, and there is also a vibrant startup community, with SMEs comprising 99.6% of all registered firms and employing 70% of the country’s work force.

But for London tech firms who don’t want to relocate, the Philippines is also becoming a hotbed for outsourcing. Manila and Cebu have become massive outsourcing hubs in recent years with the industry in the country growing by 30% every year – much faster than India, the country many people would primarily associate with outsourcing.

There are a number of reasons for this. Firstly, there is no shortage of talent – universities in the Philippines are producing 130,000 IT And engineering graduates each year – and IT is one of the best paid sectors in the country. But given the differences between the Philippines and London in terms of cost of living, it is still significantly cheaper for a UK startup to outsource some operations to Manila or Cebu.

Culturally, the Philippines is a place that would feel very familiar to Westerners, largely because of 500 years of Spanish and American influence in the region. There is an emphasis on family values as well as loyalty, integrity and hard work, while more than 80% of the population speak English to a very high standard.

However, it’s also about the flexibility of the options on offer that is attractive to those looking to outsource. It’s a common misunderstanding about outsourcing to think that only large companies, requiring 50 or more roles to be filled, should be considering it. This is wrong – it’s certainly possible to fill a handful of positions, perhaps even just one, with highly-skilled, English-speaking staff working the same office hours as the UK.

Facilities exist where dedicated remote workers are able to communicate directly with the companies hiring them, even sitting in branded areas so they really look and feel like part of the team, while the supervision and HR-related parts of the job like salary, benefits and so on are handled centrally by UK managers on site.

There are many compelling reasons why London’s tech startups who feel like a lack of local talent is holding them back should look to the Philippines.

There is a lot of potential for the Philippines to play a part in the development of the next generation of unicorns to come out of London, as well supporting tech giants like Google, but do not be surprised if the country is able to develop its own formidable herd of billion-dollar tech companies too.

Nick Hargreaves is the founder and chief executive of Cloud Employee