The business process outsourcing (BPO) industry is an expert at evolving to change. An industry that started with cost-cutting as its main selling point, along with its commitment to helping clients achieve business growth and innovation, the BPO sector is a chameleon to economic changes. This ability to adapt to change has made the industry stronger than ever over the past 18 months. COVID-19 forced the industry to become even more dynamic and meet challenges head on. The result: the global business process outsourcing market size is now estimated to hit $230 billion by 2027 compared to $162 billion in 2020.
This blog will take a deeper look into the value of specific BPO markets to fully understand where the industry is headed in the coming years.
A hunger for growth
Global Industry Analysts published a report in May 2021 that highlighted the predicted growth for the business process industry, stating that market intelligence is a crucial theme during these uncertain times.
Some key findings of the report included:
- The U.S. BPO market was estimated at around $70 billion in 2020
- Finance and accounting BPO segments are expected to rise 5.6% CAGR from 2020 - 2027, reaching more than $20 billion by 2027
- Latin American BPO markets are going to grow 5.1% during the same period.
In terms of market leaders for business process outsourcing, India remains number one, catering to over 56% of the world’s BPO needs. The growth for Indian BPO services remains steady, with the market expected to employ 1.1 million people and hold an annual growth rate of 50%.
The Philippines is not far behind. Experts have expressed how the country’s BPO sector has grown exponentially in recent times, despite the pandemic's economic turmoil. In 2020 alone, the Philippines outsourcing industry employed an additional 23,000 people, increasing the total number of business processing employees in the Philippines to 1.3 million.
The sectors within the Philippines BPO industry that are thriving are technology and business services outsourcing. In fact, the Philippines' IT and Business Process Association believe that around 450,000 workers will be added to their sector alone by 2022 based on increasing client needs and requirements. According to the Filipino government, the importance of fostering an environment that supports outsourcing for them comes down to the $26 billion dollar value that BPO’s add to the nation’s gross domestic product (GDP) each year.
The pandemic heavily influenced the healthcare industry, and the healthcare outsourcing market is no exception. MarketsandMarkets expects the global healthcare outsourcing market to reach $468.5 billion by 2026, with IT outsourcing not so far behind at a predicted $397.6 billion by 2025.
Upcoming BPO trends
As the pandemic continues to influence business decisions and client needs, having an understanding of key outsourcing trends to maintain a competitive advantage is important. These trends include:
- Remote work: With sudden lockdowns and social distancing becoming a normal way of life in countries around the world, remote work and working from home concepts are here to stay. The BPO industry has become an expert at implementing policies and procedures to ensure remote work environments remain productive, engaging and feasible for both their clients and employees.
- Automation: What’s helping BPO organisations implement these remote work practices and keep up with sudden changes in the economy? The answer lies in new tech within the artificial intelligence (AI) and robotic process automation (RPA) space. Thanks to voice recognition, live chat support services and self-aware chatbots, BPO employees can now dedicate more time to delivering value in areas that don’t just revolve around repetitive and time-consuming tasks. In fact, RPA has become so popular that 85% of large organisations will deploy some form of it by the end of 2022.
- Upskilling: With RPA and AI tech now looking to take care of the time consuming, repetitive tasks, BPO staff will be able to spend more time on more specialised and value-add services like providing customised solutions to customer problems or analysing trends in data to identify areas for improvement. Providing opportunities like new skills workshops and training and development is a great way to do just that. Especially with recent findings suggesting that 75% of BPO workers will be mid- to high-skilled positions by 2022 compared to just over 50% back in 2016.
What does all this mean?
Businesses worldwide are engaging more and more with BPO providers to reap the benefits of outsourcing, especially in market leading locations like the Philippines.
Why the Philippines? It can be summed up in seven reasons:
- Time difference is not an issue
- English language proficiency
- Highly skilled talent
- Excellent work ethic
- Quality yet cost-effective
- Strong government support
- Cultural compatibility.
Interested in how you can capitalise on outsourcing to the Philippines? Start boosting your capabilities and growing your margins by offshoring roles like accountants, digital marketing assistants, graphic designers and customer service representatives.