Get Even More Visitors To Your Blog, Upgrade To A Business Listing >>

The Philippine Phenomenon in the Outsourcing Industry

the-philippine-phenomenon-in-the-outsourcing-industry

Over the years, the Business Process Outsourcing Industry had firmly established itself as a venue for economic growth, allowing plenty of opportunities not only for employees, but also for businesses that intend to utilize the well-received perks of such service. Indeed, the BPO industry is now basically an extended arm of almost every company out there, making it more efficient for a company to be doing their business and focus on the more integral tasks while leaving other ad hoc tasks to outsource services.

In the Philippines, BPO industry has completely taken over the reigns as the second largest source of income for the country. According to the Information Technology and Business Process Association of the Philippines (IBPAP), the Information Technology and Business Process Management (IT-BPM) generated about 1.2 million direct jobs and over US$22 billion in revenues as of 2015 alone. This goes to show that Philippines is steadily gaining leverage and a level of expertise in this field, becoming one of the preferred providers in outsourcing service as proof of the constant increase in the jobs and revenues it sends in.

Even as early as in the 90s, Philippines had always been a viable choice for outsourcing which was widely recognized. In 2012, the BPO sector surmised over US$13 billion in revenue with about 21.8% growth in the number of jobs created reaching up to 780,000 for the country. Further, experts estimate that the BPO industry will further generate up to US$25 billion in revenue by 2017, and would account to as much as 10% of the country’s GDP. With its continuous growth, its high contribution will soon overtake the OFW’s remittances as the top contributor in the country’s overall revenues.

This phenomenon of having Philippines as the preferred choice for outsource service is now shown as a trend that is to be expected in the next few years. But what makes the Philippines the better choice out of all other countries offering the service?

To begin with, English is the second language in the country. All citizens are taught how to speak the language as early as one could speak, practically making it second nature to everyone to speak so. Flatplanet reports that the Philippines has a 92.5% English proficiency rate, armed with flat neutrality and Western cultural influences throughout its rich history, making their services in voice-related projects the better option. The younger generation in the Philippines on the other hand find themselves deeply immersed with the Western influences, increasing their already proficient mastery of the language and further establishing their cultural affinity all the more.

Americans show strong preference in selecting Filipinos for outsourcing services compared to Indians or any other Asian countries offering BPO. This is strongly attributed to the country’s strong cultural affinity, and fluency in the language. Furthermore Filipinos pride itself to provide a very customer-centric performance, opting to not yell and instead maintain professionalism by being hospitable in responding rather than retaliating on irate callers.

Operational costs on the other hand are at par with what India offers. The low costs are offered up to 75% less than the usual American payroll, making it a cost effective option for companies. The young, educated and English speaking professionals that the country produces each year allows the BPO industry to produce the outsource workforce it needs, allowing the clients to pay for their professional services at a low cost.

In a survey presented at AT Kearney Global Services Location Index, India maintains the number one spot as the top outsource service provider, mainly due to the low cost it provides. Philippines on the other hand remains on the top 10 countries, placing as the 7th country as the second outsource provider.

And now, in 2016, outsourcing services takes another notch, as it now demands for services that would need specialized skills from professionals. The Knowledge Process Outsourcing or KPO continues to show potential, allowing clients to leverage offshore sourcing by hiring professionals like engineers and analysts to do business for them. It is expected that by 2019, the KPO market will grow up to 23%. In the country, experts stressed the need for developing workforce for the outsourcing industry that has a higher skill set and education to cater the expected further growth in the field in the next three years. Industry insiders and market experts further reiterate that professionals in the fields of business, engineering, science, cybersecurity and legal degrees would be among those that is most needed and must be developed immediately.

On the other hand, the BPO’s rapid increase in economic state pulls other industries with it, with the real estate industry directly behind its tail. As more and more BPO companies sprout in the country, the need for physical offices are realized, establishing the need for more office spaces to accommodate the sector. In the next few years, the two industries are expected to flourish side by side, with BPO steadily growing and the real estate industry comfortably riding on to the momentum.

As of 2016, huge foreign companies such as Morgan Stanley, Goldman Sachs and Mitsubishi UFG Financial Group are considering to commission outsourcing services in the Philippines as part of its back office support. These, on top of the other several foreign companies, are all seeking to invest in the BPO sector that will, in effect, provide up to at least 225,000 new jobs in the country. Emerging sectors especially the healthcare industry spearheads the need for the workforce, accounting for about 30% of the total revenue in the outsourcing industry.

Outsourcing in the Philippines has vastly expanded not only in terms of services but also in geographical locations. From being contained in the Metro Manila area, BPO companies have expanded even in provincial areas such as in the Visayas and Mindanao region, as a response to the fast increase in workforce and the need to set up physical structures for the service.

As a whole, Business Process Outsourcing Industry in the Philippines is a phenomenon in itself, pushing itself up in the economic strata, and in effect pulling everything within its reach for the benefit of the economy. True enough, more global opportunities for this Industry awaits the country, what with a clear roadmap prepared by Market experts that is set to support the BPO for the next few years.



This post first appeared on Outsourcing Insider | Outsourcing Articles | Outso, please read the originial post: here

Share the post

The Philippine Phenomenon in the Outsourcing Industry

×

Subscribe to Outsourcing Insider | Outsourcing Articles | Outso

Get updates delivered right to your inbox!

Thank you for your subscription

×