According to a comprehensive new study by the World Bank, a global recession could happen in 2023. However, one industry that stands to benefit from this is outsourcing.
The Global Business Process Outsourcing (BPO) market is expected to grow to $492 billion by 2028 at a compound annual growth rate (CAGR) of 10.1%. Consulting firm Skyquest reported that increasing demand for efficient and effective business processes would boost the industry over the next six years.
The report also stated that many large companies in the BPO sphere outsourced their customer service and back-office functions to the Philippines to reduce costs and improve the quality of service.
Winston Ong, CEO of remote-only outsourcing firm Bruntwork, agrees with Skyquest’s study. He believes the Philippines offers the “best” virtual assistants (VAs) worldwide.
While the title is not official, many companies cite the Philippines as offering the most educated, literate, and hardworking VAs. With its 96% literacy rate, the country also ranks as the world’s best outsourcing destination for business English.
Outsourcing to the Philippines could also offer a lot of benefits. Here are the most common ones:
- Increased efficiency. Philippine-based outsourcing workers offer high-quality service to their foreign clients.
- Freeing up attention for core areas. Outsourcing non-core functions to Filipino workers help companies focus more on the areas that matter most to their business.
- Timezone advantage. Because of the timezone difference between western countries and the Philippines, businesses can run 24 hours, seven days a week.
- Access to more talent. With the Philippines’ large pool of outsourcing workers, companies can find the best personnel with the right skills for their specific industry.
But the most attractive benefit of it all is the lower labor cost. According to Indeed, a U.S-based virtual assistant makes about $23.64 per hour. Compare that to data provided by Payscale that puts the average base hourly rate of Filipino VAs at USD$3/hour.
Ong said that this significant cost-saving is why the VA business is booming in the country.
Is outsourcing to the Philippines a good idea?
Since the cost of labor in the Philippines is substantially lower than in other countries, companies can save significantly on staffing.
It also eliminates the need to invest capital in costs like office space, computers, software, or additional human resources. Cutting these overhead costs equals savings of up to 70% compared to in-house operations.
So with that in mind, outsourcing could be the best option for companies looking to survive past the possible recession next year.