The Outsourcing Week in Review (International): June 5, 2023

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Happy Monday! The outsourcing arena is buzzing with action, emerging markets surging, and veterans strategizing for growth. Luckily, we’re here to round it all up for you. Let’s start! 

Africa‘s Global Business Services (GBS) market will hit $19.8 billion in 2023. The growth is bolstered by the continent’s economic governance, political stability, vast labor resources, lower labor costs, and policy support. According to a report by Knowledge Executive, the Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO) segments are predicted to lead the market’s growth. Meanwhile, nations like South AfricaEgypt, and Nigeria will remain at the forefront of the industry.

Meanwhile, India-based tech giants CognizantInfosys, and Tata Consultancy Services (TCS) are set to expand their share in the global outsourcing market. Leveraging leadership changes and significant deal acquisitions, they aim to capitalize on the current trend of clients consolidating IT operations with one vendor. In a complementary move, ANSR, a firm that manages global teams for multinationals, plans to establish 100 new Global Capability Centers (GCCs) across India by 2026. These offshore units — which offer a range of support services from IT to HR — are expected to contribute $40 billion in revenues and employ over 1.38 million people in India, accounting for 25% of the country’s service exports.

The outsourcing industry is a boon for youth employment and skill development in countries like Bangladesh. According to State Minister for Information and Communication Technology Zunaid Ahmed Palak, around 70,000 young professionals are employed in the local outsourcing industry. Palak added that this significant number highlights the sector’s remarkable transformation since it landed on Bangladesh’s shores 14 years ago.

Similarly, the IT-BPO industry in the Philippines is expected to see significant growth over the next decade, contributing substantially to the country’s economy and employment sector. With the promise of attracting multinational investments, S&P Global Market Intelligence Asia-Pacific Chief Economist Rajiv Biswas believes the country could emerge as one of the fastest-growing markets and become a $1 trillion economy by 2033.

The demand for outsourcing in some sectors continues to rise, driven by talent shortages. For instance, accounting firm BDO USA plans to double its offshore workforce, primarily in India and South Africa, over the next five years to counteract a talent deficit in the audit and tax sectors at home. CEO Wayne Berson recognized the significant talent deficit in the field and stressed the need for openness to hiring from regions with the necessary expertise. This strategy aligns with trends in major firms like DeloittePwCEY, and KPMG, which have already established substantial offshore operations, particularly in India.

On the other hand, call center operator Firstsource Solutions is set to cut about 500 jobs in Northern Ireland following changes in the contract with its major client, Sky. In a statement, the firm said it had begun a redundancy consultation process, which will inevitably lead to compulsory layoffs across its sites in Belfast and Derry. Similarly, telecommunications giant Verizon informed over 6,000 employees about upcoming layoffs. According to the firm, the job cuts are part of their restructuring and streamlining efforts following a disappointing Q1 financial report. These changes are also fueling the speculation about Verizon potentially shifting to outsourced customer service, raising concerns about the impact on its longstanding customer service reputation and loyal employees.

Capita can’t catch a break. Following a cyberattack last March, around 90 organizations linked with the firm reportedly experienced personal data breaches. These organizations, which span both public and private sectors, spurred the privacy watchdog Information Commissioners Office (ICO) to launch an inquiry about the event. However, Capita commented that all data left exposed online was already “secure and no longer accessible” publicly.

Are you planning to broaden your company’s skillsets? Upskilling is your safest bet! According to an Econsultancy survey, 70% of organizations prefer training their current employees to acquire new digital skills over hiring and outsourcing. Around 61% also find training to be the most cost-effective approach. However, Econsultancy also noted that the demand for highly specialized or technical skills still leans towards outsourcing, emphasizing the critical role that outsourcing continues to play in the global digital landscape.

Don’t get left behind!

Source: Giphy

The outsourcing news this week​

1 June 2023

  • New BPO Center in Cebu set to create 200 jobs – read article…
  • ICRA predicts slump in Indian IT growth, hiring in FY24 – read article…
  • India’s Electronics and IT Ministry launches outsourced repair project – read article…
  • Africa’s business services market to reach $19.8Bn in 2023 – read article…

31 May 2023

30 May 2023

29 May 2023

  • ANSR to bolster India offshoring with new centers by 2026 – read article…
  • BDO USA to double offshore workforce amid young accountant shortfall – read article…
  • 98% of IT leaders approve cloud transformation — Aptum study – read article…
  • DXC Technology cuts Q1 earnings outlook – read article…

26 May 2023

  • India’s BPO/ITES sector holds 10% share in fresher hiring  – read article…
  • Verizon announces layoffs amid outsourcing speculations – read article…
  • Firstsource Solutions to cut 500 jobs in Northern Ireland – read article…
  • 70K young Bangladeshis work in BPO, says ICT minister – read article…

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About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.