The mammoth growth of the BPO industry in the Philippines since the 1990s has been unprecedented, but what’s to come for the industry going forwards? With over 1000 BPO companies employing 1.3 million people, it’s the second-largest industry in the country, but is there continued growth and success on the horizon, or is there something new for the country?
The BPO industry in the Philippines is worth approximately $38 billion as of 2022 and is estimated to rise above that of the standard IT-BPO industry in the coming years. With innovations in technology, upskilling workforces, and continued foreign investment, the future forecast growth for the BPO industry is positive.
With stiff competition from its biggest rival, India, and the advent of evermore remote working, we look at the potential future growth of the BPO industry in the Philippines, with predictions and forecasting.
Since the 1990s the Philippines has been one of the biggest players in the BPO industry. Thanks to high levels of government support, including tax incentives, a capable and willing workforce, and quick and sustained investment from overseas, the industry has gone from strength to strength.
By 2005, the Philippines accounted for 3% of the global BPO market, and in the following year the company ePLTD, a firm focused on pushing economic growth in the Philippines, set up in the country and provided over 11,000 jobs. It is estimated now that 10-15% of the global BPO industry is held in the Philippines.
The disruption caused by the pandemic in 2020 had an effect on businesses across the world, including those offering remote business solutions. While many businesses, and even entire industries, struggled, the BPO industry was at an advantage, already engaging in robust and proven methods of remote and off-shore work, with proven success.
As such, between 2020 and 2021, the industry recorded growth in employee numbers by 9.1% and revenues increased by a huge 10.6%. Popular opinion suggests that this unprecedented growth in a time of global worry was thanks to the increase in start-up tech companies entering the market through the pandemic, many of whom required assistance and support from people with knowledge and skills, as well as experience in working remotely with confidence.
The BPO industry in the Philippines has, itself, grown by between 8-10% in previous years, with the majority of clients based in the US.
With the world almost back to normal post-COVID, what’s to come for the BPO industry in the Philippines? From growing numbers in terms of industry value and employee statistics to advances in technology, there is a lot to come for the BPO industry as a whole, and in the Philippines, it’s a matter of adapting and evolving in order to stay at the top of their game.
There’s a call for increased professionalism and ever-increasing skill sets. With shortages of skilled talent in countries such as the US and the UK, recruitment is more difficult than ever, but that’s not to say firms will choose to work with anyone. Top talent is required when working with outsourcers, especially in order to stand out from the thousands of other BPO companies offering similar services.
It is expected that the Filipino BPO sector will outperform those in the same industry in other countries, with sectors such as animation and design, and healthcare looking to be big growth areas in the Filipino BPO industry.
A big piece in the growth of BPO worldwide is the modernization of automation and AI. Many traditionally outsourced tasks will become automated – for example, data entry, machine operators and even call center agents – meaning firms will need to diversify their portfolio of services and embrace new technologies in order to be able to provide the high-level service required by international firms.
In particular, since Covid, firms have had to reevaluate ways to improve their bottom line and AI is one way of streamlining processes in order to do so. It’s a sector that’s only going to keep growing, and offers the Filipino BPO industry great opportunities in the coming years.
It’s estimated that there will be 2.5 million Filipinos employed in BPO companies by 2025, which is an increase of roughly 1 million between now and then. Importantly, following on from the increased professionalism and skills needed, many predictions show that while AI and automation will likely reduce the number of employees required, if those employees are able to upskill to more analytical roles, rather than simple call-answering or data input, the job opportunities will still exist, if not grow.
In order to stay relevant and desirable, BPO firms in the Philippines will need to continue developing their service offerings, in line with progress in IT and diversified demands from clients. Cyber security, software and gaming developers, immersive technology experts (for example, VR and AR), SEO, and even healthcare-based skills such as genome sequencing, are all predicted to be in high demand in the future (Nexford University, 2021).
In order to ensure the growth of the BPO industry in the Philippines, as one of the longest-standing contributors to this global industry, the time is nigh for rethinking old ways of working, being proactive in their approach to the type and quantity of services offered, and potentially re-market themselves to remind people of the incredible breadth of knowledge, thanks to years of expertise, they have in the services they can offer.
What’s known as knowledge process outsourcing (KPO) is the future – outsourcing not just those parts of the business that are menial or time-consuming, but engaging and working with highly-talented and capable partners, who can offer quick, reliable, and efficient service and who feel like a part of the business, who just happen to be located in a different part of the world.