Like it or not, outsourcing is here to stay, especially after the global dumpster fire that was 2020.
Oh, and in case you’ve stumbled across this article by mistake, let me give you a quick refresher. Outsourcing is the process of contracting certain business processes to external parties. These may involve domestic or offshore partners.
It comes with a lot of benefits. Lower costs, wider talent pools, and ultimately, higher revenues are just a few of them. Despite this, some are hesitant to outsource for a myriad of reasons as well. And then there’s the argument about outsourcing taking away local jobs.
But I’m not here to debate about its benefits and consequences. Today, it’s purely about the numbers. Let’s take a look:
Global Outsourcing Numbers
The largest share of global outsourcing revenue was generated in the US, adding up to USD62 billion in 2019. Meanwhile, India is still the leading country for offshore business services due to its suitability for business process outsourcing, large population, and resulting lower wages.
For 2020, the top 5 countries for outsourcing are:
Malaysia and the Philippines tied for the third place for different reasons. The former is a more stable option for investors looking to build business centers in the region. The latter, on the other hand, counts workers with neutral-sounding English and 24/7 service as key advantages.
Outsourcing Down Under
While the US still holds the top spot for deriving the most revenues from outsourcing, the latter is becoming increasingly popular in Australia. IbisWorld revealed that the industry’s been growing by about 1.2% per year from 2013 to 2018, with 2019’s revenue figures hitting AU$32 billion.
In Numbers: Why the Philippines Remains a Top Outsourcing Location for Australia
BPO Statistics in the Philippines
The business process outsourcing (BPO) industry in the Philippines has been one of the biggest contributors to the economy for several years, contributing over US$20 billion to date.
Average base salaries in the country also lag behind every other ASEAN country. Neighbouring China’s base salaries are up to 2.2 times higher for their managerial counterparts. Wages in traditionally low-cost labor markets like Hong Kong, Taiwan, and South Korea have also spiked upwards over the years.
Yet, the education rate currently stands at 95.9%, which results in a local workforce that is both competent and with competitive compensation rates.
The Filipino population is also very technology savvy, which greatly reduces the amount of training or onboarding required for online work:
Filipinos also have the highest levels of online brand engagement and social media usage in the world, across all income levels.