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Outsourcing statistics and reports in 2020

Owners turn to business process outsourcing as a viable option instead of hiring in-house employees. With this, different institutions rank and name the top and emerging countries for outsourcing as a guide for businesses.

Despite the projection on the rise of disruptive outsourcing, companies are still optimistic in the power of delegating tasks to the human workforce than their AI counterparts.

Outsourcing report

On the verge of disruptive outsourcing and robotic process automation (RPA), companies still turn to the outsourcing and shared services (OSS) industry, with another emerging country to consider.

As reported by Deloitte and a news article in the Arabian Gazette, it gained popularity in the Middle East, particularly Dubai, and is projected to increase to $6.8 billion by 2023.

The 2019 A.T Kearney report highlights the importance of automation and cybersecurity as some of the factors the countries consider in choosing a BPO company, aside from its location. This shift affected more repetitive jobs in low-cost countries, replacing these with highly-skilled ones to attend to the increasing demand for automation.

As per Gartner, more than 80% of logistics leaders plan to increase their outsourcing budget by more than 5% by 2020. One of the reasons for this is that outsourcing their logistics helped them a lot by meeting or exceeding the end-to-end (E2E) supply chain and overall business objectives.

Business Process Outsourcing (BPO) countries

Yearly, different research institutions list the top countries for outsourcing services. They usually base this on aspects such as workforce population, literacy rate, and access to the latest technology.

Below are the top 3 countries in this list:

India

India remains the leading country to outsource as per Tholons Top 50 Digital Nations and A. T. Kearney Global Services Location Index of 2019. The country also has 14 super cities listed in the Tholons report. Aside from the 24/7 service and the latest technology used at work, it prides its top talents mostly specialized in IT and software development.

Highlights

Fast facts

  • Gross Domestic Product (GDP). “India is the 3rd largest economy in the world after the US and China in terms of purchasing power party (PPP) and 10th in terms of nominal GDP.” – Deloitte India
  • Doing Business. “India has moved 14 places to 63rd among 190 nations in the World Bank’s ease of doing business ranking on the back of multiple economic reforms by the Narendra Modi government.” – India Times
  • Indian Railways. “Indian Railways is one of the largest employers in the world with over 1.4 million employees.” – MSN Money
  • Labour force. “Slightly less than half of the workforce is in agriculture, but services are the major source of economic growth, accounting for nearly two-thirds of India’s output but employing less than one-third of its labor force.” – Forbes
  • Action to climate change. “The country is paying its states about $125 per hectare of forest per year as a way to give afforestation a boost, one of their ways to tackle climate change.” – World Economic Forum

The Philippines

Next to India, the Philippines is one of the most popular outsourcing destinations. The country, though considered a late bloomer, holds the title ‘The BPO Capital of the World’ since 2010. Being a former colony of Spain and the US gained them the advantage of cultural compatibility with the West. The country specializes in outsourcing customer service roles (voice and non-voice-related) such as call center or IT support.

Highlights

  • 2019 population: 106.6 million
  • Literacy rate: 97.9
  • English proficiency: #20 in the world and #2 in Asia
  • Employment rate: 95.5
  • Real GDP (in USD): 9.2 trillion
  • Government support in outsourcing: full support to develop the IT industry
  • Industry body: IT & Business Process Association of the Philippines (IBPAP)

Fast facts

  • Gross Domestic Product (GDP). “The Philippines has one of the fastest-growing economies in Asia, going up to 6.2% in 2018 .” – Deloitte Philippines
  • “In 2015, the BPO sector generated over $22 billion in revenue, accounting for 7.3% of the Philippine economy.” – World Trade Organization
  • Contribution of BPO to employment. “In the same year, the industry generated 1.2 million full-time employees.” – World Trade Organization
  • Government support. As an encouragement to develop the IT industry in the Philippines, PEZA supports foreign investors to set up BPO companies in the country by giving them incentives such as tax holidays, tax-free importation of equipment, and visa assistance for them and their families.

The United States

It is almost just recently when the outsourcing industry in the US started to get popular. Since 2017, domestic or onshore outsourcing has become popular due to the massive pullout of companies. Currently, the country is popular in tech support and IT-related services.

Highlights

  • 2019 population: 330.2 million
  • Literacy rate: 99
  • Employment rate: 60.9
  • Real GDP (in USD): 21.4 trillion
  • Government support in outsourcing: slowly taking back jobs to the US to increase employment
  • Industry body: National Association of Call Centers (NACC)

Fast facts

  • Online work. “The US is the 3rd largest supplier of freelancers and online workers, next to India and Bangladesh.” – iLabour, Oxford Internet Institute
  • Doing business. “In 2017, President Donald J. Trump Executive Order 13771, also known as the “one-in two-out” policy. It aims to make it less costly to do business in the United States.” – US Environmental Protection Agency
  • Fortune 500. “In total, Fortune 500 companies represent two-thirds of the U.S. GDP with $13.7 trillion in revenues, $1.1 trillion in profits, $22.6 trillion in market value, and employ 28.7 million people worldwide.” – Fortune.com
  • Paris Agreement. “On November 9, 2019, the United States began the withdrawal process from Paris Agreement, as mentioned in remarks last June 2017, by submitting their notification for withdrawal to the United Nations” – US Department of State

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