The Outsourcing Week in Review (International): May 8, 2023

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Welcome to Inside Outsourcing: The Outsourcing Week in Review


Are you preparing to start your week already? Pause first, and let us catch you up with the hottest outsourcing news worldwide. Stay back, sit tight, and welcome to Inside Outsourcing: International Edition.

India‘s IT outsourcing giants are preparing for a growth slowdown as their largest market, the United States (U.S.), curtails their technology spending. Kotak Institutional Equities analysts said the slowdown “was sharper than expected” as the banking crisis in U.S. regional and European banks induced greater caution. During the most recent quarter, North America accounted for more than half of the tech giants’ revenues, with 52.4% for Tata Consultancy Services (TCS), 61% for Infosys, and 63% for HCL. Recruitment in India’s Business Process Outsourcing (BPO) industry is also dwindling due to the global slowdown. According to Naukri JobSpeak Index, the sector suffered an 18% drop in April as tech-related companies “exhibited a cautious hiring sentiment.” Overall, the demand for white-collar jobs in the country dropped by five per cent compared to last year, with 2,715 jobs advertised.

On the other hand, around 60% of senior executives plan to increase the outsourcing of engineering, research & development (ER&D) over the next three years. In a survey by management consulting firm Bain & Company, most respondents reported an increased reliance on outsourcing to innovate faster, address talent shortages and cut costs. Companies are also looking to outsource a broader scope of activities — including product design and development — instead of hiring non-core talent.

In contrast, Jamaica will add 15,000 more outsourcing employees to its labor pool by 2025. Former Global Services Association of Jamaica (GSAJ) President Gloria Henry advised the local industry to prioritize training graduating students to address the country’s shortage in qualified talent. Henry added that Jamaica should start capitalizing on emerging areas in outsourcing — such as high-value jobs like procurement and supply chain, logistics outsourcing, facilities and administration, and AI prompt engineering. Jamaica currently has 60,000 outsourcing employees.

Meanwhile, the outsourcing industry is poised to play a crucial role in the Philippines’ rise as one of the world’s emerging markets. According to S&P Global Market Intelligence Asia-Pacific Chief Economist Rajiv Biswas, the rapid growth of outsourcing exports will help boost the Philippine economy, with the possibility of achieving a per capita GDP of $7,400 by 2032. As of last year, outsourcing export revenues in the Philippines are at US$27.4 billion, up 9.1% from 2021’s figures.

And we already see Biswas’ prediction starting to take shape as two U.S.-based BPOs plan to expand in the Philippines! 

During a meeting with Philippine President Ferdinand Marcos, Jr., officials from Atento and Optum committed to investing in the country. Atento is looking to build its first Philippine call center in Iloilo, while Optum aims to invest around PHP800 million (US$14.5 million) while setting up a new facility in Davao. President Marcos called these plans a step in the right direction as “Filipinos speak and write the best English.”

In a series of misfortunes, outsourcing firm Capita‘s £18 million deal (US$22.5 million) with Deliveroo was canceled five months after signing. Deliveroo pulled the plug on the project after Capita failed to deliver on its promise of setting up a team of 150 multilingual staff for Deliveroo’s new support center in Poland. The deal’s collapse is a setback for Capita’s multilingual capabilities expansion in Poland. It also adds to the firm’s recent troubles, like the March cyberattack and debt repayment that led to the sale of its resourcing businesses.

Despite Capita’s troubles, the outsourcing industry continues to grow worldwide. In fact, various agencies and countries have started efforts to support their local markets.

For example, the IT and Business Process Association of the Philippines (IBPAP) and the Philippine Board of Investments (BOI) recently held an IT-BPM Talent Summit to advance national upskilling, educational reforms, and career advocacy in the IT-BPM industry. The summit aligns with the Philippine IT-BPM Industry Roadmap 2028, which aims to make the country the “world’s number one experience hub for digitally-enabled and customer-centric services.” During the summit, the two agencies showcased the Five-Year National Development Program, outlining specific activities to spur the local IT-BPM industry and create 1.1 million jobs in the next six years.

In Colombia, outsourcing body BPrO is preparing to hold its 21st annual Customer Experience (CX) Summit in Cartagena on May 10th and 11th. The event is the most significant BPO event in the Andes region as it brings together industry players for networking and relationship building. Attendees can expect to gain deeper insights into the outsourcing industry’s potential for growth and success in Colombia and the entire region, with a concert and the CX Interaction Awards mixed in between the two-day event.

Let’s connect with each other!

Source: Giphy

The outsourcing news this week​

04 May 2023

  • Firms urged to assist vulnerable customers, employees amid economic crisis – read article…
  • Jamaica eyes 15K addt’l outsourcing talent by 2025 – read article…
  • 2 U.S.-based BPOs plan PH expansions – read article…
  • PH firms positive on job creation, anxious about talent – read article…

03 May 2023

02 May 2023

01 May 2023

Read more Inside Outsourcing here:

  1. The Outsourcing Week in Review (Mergers & Acquisitions): May 10, 2023
  2. The Outsourcing Week in Review (Future of Work): May 12, 2023

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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.