The Global BPO Sector: The impact of outsourcing to the Philippines

April 15, 2024

Outsourcing to the Philippines has emerged as a clever strategy for global businesses aiming to increase their efficiency, lower their costs, and keep a step ahead of the competition. While call centers in the Philippines are highly regarded for their exceptional call center services, the country is also diversifying its service offerings, further establishing itself as a key player in the wide spectrum of BPO services.

Philippines – The call center hub of the world

Known as the “call center capital of the world,” the Philippines has established itself as a preferred destination for businesses. The country’s dynamic growth in this field is stimulated by a union of influential factors. By banking on its large, English-fluent population and strategic advances in telecommunication, the Philippines has adeptly established itself as a foremost choice globally for BPO services. Add to this, its competitive labor pricing makes it a fiscally prudent choice for organizations striving to trim down costs without sacrificing quality standards. This thoughtful choice of outsourcing locale assures uninterrupted operations, propelling businesses to bolster productivity levels, uplift customer satisfaction, and focus on their central functions for enduring triumph. Moreover, the government’s encouraging policies and the solid infrastructure amplify the appeal of the Philippines as an outsourcing hotspot. It’s the confluence of an agreeable business atmosphere, proficient talent, and reasonable costing that has sculpted the Philippines into a vibrant axis for outsourcing operations. It’s worth mentioning that the call center corporations play a significant role in the country’s BPO sector while also contributing generously to the socio-economic complexion of the Philippines.

Driving the BPO revolution

The trend of delegating BPO services to the Philippines has solidified, given the country’s rise as a premier global hub for the Business Process Outsourcing (BPO) sector. The retail BPO services in the Philippines contribute healthily to their economy, generating over $30 billion per year by various means. As per Gartner report, the BPO market is expected to grow at a CAGR of 9.1%, expected to grow from $196 billion in 2022 to $303 billion in 2027.

The Philippines, which has a market share of 10-15% in the global BPO industry, serves mainly the USA, Europe, Japan, New Zealand, and Australia. English proficiency, a courteous culture, and a strong educational system are great advantages of outsourcing BPO services to the Philippines. The IT and Business Process Association of the Philippines (IBPAP) had predicted the BPO talent pool to grow at a rate of 9.1% annually each year. The success is hugely due to the country’s competitive prospects, which comprise a large-scale skilled workforce, including a considerable segment of those proficient in English with their knowledge in areas such as customer service, IT support, and healthcare.

Philippine BPO firms are uniquely positioned in the global market, providing exceptional benefits tailored to meet the varied and changing demands of worldwide customers.

Cost-competitive: The cost-saving aspect of partnering with Filipino BPO companies is significant. The economic setting of the Philippines supports lower operational expenses compared to many Western nations. Significantly, the competitive pay, a major component of operational spending, is much lower. This allows organizations to conserve financial resources that can be reinvested in fostering innovation or pursuing other activities that spur growth.
Upholding quality and operational excellence: Filipino professionals stand out for their strong English language skills, cultural alignment with Western standards, and innate customer service ethos. This harmonious blend of expertise and characteristics ensures that the services provided by the Philippines not only meet but frequently surpass the high standards expected by global clients.
Flexibility and scalability: In today’s rapidly evolving and often unpredictable business landscape, the capacity for swift adaptation and the scalability of operations are crucial. Philippine BPO services shine in this area, offering flexible and scalable outsourcing options customized to meet the unique requirements of each client, ensuring that businesses can grow and adjust in real time to the market demands.

The strong support system

The type of work performed by the BPO contact centers is varied and includes back-office operations (HR, Finance, IT), customer support, data mining, software development, etc. many roles of which can be done remotely. The pandemic was particularly harsh for BPO businesses as they had to swiftly adapt to the remote work mode. This turned out to be beneficial for the Philippines as they found the hybrid working model and the WFH model quite convenient and efficient.

The positive factors making Philippines attractive:

Several factors make outsourcing BPO services to the Philippines attractive, including supportive local laws like the DICT Act of 2015 for ICT excellence, the Data Privacy Act for international compliance standards, and economic incentives under the Special Economic Zone Act. Additionally, the Telecommuting Act and initiatives like the Next Wave Cities Program and BPO talent development efforts underline the government’s commitment to bolstering the industry. Despite potential global economic downturns, the Philippines’ BPO sector remains poised for growth, with 83% of providers expecting an uptick in the immediate future, indicating the country’s integral role in the global BPO landscape.

The Philippines accounts for 10-15% of the worldwide BPO industry, employing around 1.3 million people. This field contributes to roughly 9% of the nation’s GDP each year. Many notable BPO companies and IT service providers like Movate have made Philippines their home base for CX outsourcing services.

The BPO landscape in the Philippines is rich with a broad spectrum of services, which makes it an attractive destination for global businesses seeking outsourcing solutions. The country distinguishes itself in the international scene as a hotspot offering a vast array of superior quality BPO services. With a strong reputation in call center operations, the nation also excels in IT, attracting major companies for outsourcing, including Oracle and Microsoft. The ICT-BPO sector has matured into one of the fastest-growing and vibrant sectors in the Philippines, presently providing more than a million direct job openings. In essence, the Philippines caters to a broad range of outsourcing needs, further underlining its standing as a top choice for international businesses.

Philippines at the forefront

The Philippines stands proudly as a notable hub for outsourcing while also stepping up its game in the offshoring industry. The rising status as a favored destination for offshoring companies in the Philippines offshoring companies in the Philippines speaks volumes about the strategic advantages of channeling investments into the country. The Philippines excels in offshoring with skilled talent, modern governance, and infrastructure, standing alongside other hubs in India, Costa Rica, and Colombia.

In 2024, forecasts suggest the economy of the Philippines is set to experience a growth in its GDP, estimated to fall within the 5 to 6 percent range. As offshoring sails into the future, the Philippines expertly weaves innovation into its expanding service tapestry. The horizon holds promise for growth fueled by technological innovation and the expansion into varied services, such as digital marketing and customer support. Unlock the full potential of your business by embracing the future with Movate’s outsourcing expertise.

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FAQs

1. What makes the Philippines a leading destination for outsourcing BPO services?
The Philippines offers a unique combination of competitive remuneration, large pool of fresh graduates every year, a highly skilled English-speaking workforce, and a supportive government policy towards the BPO industry.

2. How does outsourcing to the Philippines benefit global companies?
Companies benefit through cost savings, access to a vast talent pool, and the ability to focus on their core business areas while outsourcing non-core activities.

3. What impact does Philippine outsourcing have on the global BPO sector?
The Philippines contributes to the growth and diversification of the global BPO sector, challenging traditional markets and setting new standards in service excellence.