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4 Favorite Countries for Singapore SMEs to Outsource

Jennifer Tjahyadi
September 13, 2022

“Too much to do, too little time, not enough resources”. Sounds relatable?

It is not unusual for SMEs to find themselves in this situation. As a matter of fact, it is actually a good sign — it means that you are being cautious and not overspending your time and money on hiring full-time staff or teams that might not be sustainable for the company’s future outlook. It is also one of the pro-tip that we made to help you reduce cost in the face of rising inflation.  

That is why outsourcing is no longer news, it has become an integral part of effective business operations. Outsourcing means hiring a third-party company or individual contributor to perform tasks or provide services for your company. Before the pandemic, it is estimated that around 54% of all companies outsource to a third-party support team to connect with customers.

Here are the 3 most common reasons why SMEs should consider delegating tasks through outsourcing:

1. Work with experts. 

Your in-house team might be great at a few things, but nobody is perfect at everything. By outsourcing specific tasks, teams are often able to improve performance by letting experts in certain fields contribute their niche skills to your work.

2. Reduce business costs. 

Most of the time, outsourcing work is going to be cheaper than hiring permanent full-time staff. In most cases, organizations in developed countries prefer outsourcing their business processes to developing countries where laborers are paid far less than workers in developed countries due to the lower cost of living.

3. Increase efficiency. 

Not only can it help your business save money, outsourcing can also help you save time on recruitment processes. The time and effort spent on hiring can be assigned to focus on what matters for your business growth.

This brings us to the most frequently asked questions by business owners, which country should I outsource from? Singapore is one of the top 10 most expensive cities to live in 2022, making it reasonable for manpower to be expensive. Outsourcing some of your business operations to other countries might make a significant difference to your business expenses.

Below are the 4 most favorite countries for Singapore SMEs to outsource their business operations: 

1. India

India is a top outsourcing destination not just for Singapore SMEs, but also for businesses across the world. This comes naturally due to its low cost of living, low average salary and over-supply of skilled labor. In 2021, India is rated as having the largest English-speaking population in the world and the higher education system focuses heavily on science and technology. This makes India a preferred outsourcing country for software development services. For instance, hiring a lead software developer in India would cost you an average of S$2,269 per month. In comparison, hiring a lead software developer in Singapore would cost you an average of S$8,374 per month.  

2. Philippines

Like India, the Philippines is one of the best countries for outsourcing in Asia. The country has favorable tax laws that attract businesses worldwide to purchase from its outsourcing industry. Known for its high English fluency, the country is ranked 18 among 100 countries worldwide in the English Proficiency Index for 2021. Located on the eastern rim of the Asiatic Mediterranean in Southeast Asia, the country has an impressive literacy rate of 98.18% as of 2021. That’s why the Philippines is preferred for outsourcing customer services support. For instance, the average salary for a customer service representative in Philippines is S$540 per month. In comparison, hiring a customer service representative in Singapore would cost you an average of S$2,508 per month.

3. Malaysia

Malaysia is a trending outsourcing market with a prospering IT sector. It is placed third in the 2021 Kearney Global Services Location Index for its increase in digital capacity. The country ranked 3rd on the English Proficiency Index for Asian countries in 2021 and 28th among 112 countries worldwide. The high proficiency enables Malaysian talent to perform any English-speaking outsourcing services efficiently. Cost of living in Malaysia is also lower than most USA and European cities, making it hard for companies to resist outsourcing from Malaysia. For instance, the average salary for an IT consultant in Malaysia is S$2,178 per month. In comparison, hiring an IT consultant in Singapore would cost you an average of S$4,825 per month.

4. Indonesia

Indonesia is considered an attractive global business outsourcing location for its digital presence and workforce availability. While Indonesia has low English proficiency, the country’s low labor costs do make it a desirable outsourcing destination for roles that require less communication like design work.  For instance, the average salary for a graphic designer in Indonesia is S$459 per month. In comparison, hiring a graphic designer in Singapore would cost you an average of S$2,561 per month.

If you prefer to work with talents who have good local context, yet hiring full-time staff is too costly, you might want to consider working with freelancers in Singapore instead. We recently compared the benefits of hiring full-time employees or freelancers that might be useful for you. In the end, it’s about whichever suits your company’s strategy best.

Leading digital loan marketplace Lendingpot connects SMEs to its network of 45 lenders comprising relationship managers from banks, financial institutions, and private and peer-to-peer lenders in Singapore. It aims to help SMEs overcome the information asymmetry problem and lack of transparency prevalent in the SME financing sector by offering SMEs financing options such as business term loans, property loans, revenue-based financing, credit lines, working capital loans, bridging loans, invoice financing, and more.

About the author

Jennifer loves helping SMEs in their business growth journey. She is also an epicurean and has perpetual wanderlust. During the weekend, she weaves poems out of thin air and buries herself in books.

Business Operation

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