Outsourcing services is a rising trend around the globe. It is defined as a contractual agreement between companies agreeing to hire another company’s services to perform certain jobs. Business Process Outsourcing, also known as BPO, is one of the subsets of outsourcing that emerged to become a huge industry in the global market. BPO is a business practice wherein a company outsources operations of a business process to another company that acts as a service provider. The industry has various sectors such as call centers, back office, contact centers, tech support, data transcription, animation, software development, game development, medical transcription, data analytics and more.
Over the years, the Philippines is one of the biggest contributors to the growth of the global BPO industry. It has grown to become Capital of the BPO Industry. This is simply because of the rapid advancement of business process outsourcing in the Philippines. In a very short span of time, this sector has become largest source of employment for the Filipinos. At the same time, it has become second largest contributor to the development and growth of the economy as well as of foreign exchange earnings.
As call centre service providers and other BPO industry services, the Philippines has become the top destination among the biggest businesses. It remains attractive to many foreign clients due to various reasons. Low operational costs and proficiency in the English language are two prime reasons why foreign investors are drawn to the Philippines for third-party operations. Business Process Outsourcing of the Philippines has overtaken its rival and it now covers about 16-18% of the global market share of the industry. Out of which, a large percentage is contributed by sub-sector contact centers. The overall industry, employees more than a million of Filipinos and has earned $23 billion in revenue in 2016. The growth of the industry is unstoppable. According to the Contact Center Association of the Philippines, the BPO industry is forecasted to grow by 7 to 9 percent in future. And by 2022, the industry is projected to make $40 billion in revenue.
Philippines call centers mainly cater to Australia, UK, and USA accounts. However, the United States is the country’s biggest outsourcing clients. About 65% of the total BPO business comes from the USA. In addition, the BPO companies have acquired clients from Europe and New Zealand in large numbers, too.
By the end of 2018, there are about 851 registered BPO companies and more than half of them are call centers. President Rodrigo Duterte has declared the industry as the largest contributor to the country’s GDP. According to the latest data, about 575,600 Filipinos have jobs in BPO sector. Out of which, about 87% percent is in call centers. The remaining numbers have found employment in the IT related BPO sectors. As per the latest trends, it is forecasted that almost 700,000 additional job opportunities will be created by 2022.
The industry continues to widen its scope by basking into the opportunities provided by new technological innovations like automation, artificial intelligence, and robotics. From basic back-office jobs, the business process outsourcing in the Philippines is aiming to add higher-skilled operations to its list of third-party services. The companies are also looking forward to creating changes in the industry by adapting to new technologies and hiring mathematics professionals and engineers for the data analytics field.
In the era of technological innovations, the BPO industry is expected to undergo a major shift. As the industry expands, the foreign clients wish to invest in the Knowledge Process Outsourcing (KPO) sector. This sector is information driven sector and it functions through the process of outsourcing of knowledge and related activities. The responsibilities include gathering, managing, and analysis of huge data and knowledge. Some of the primes services in this sector includes data analytics, insights, market research, data management, data integration, legal processes, actuarial science, and more.
Nonetheless, the BPO industry continues to grow by leaps and bound. A slight slowdown was experienced in the year 2017, but it has shown significant improvement in the year 2018.
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