Friday, August 6, 2010 |
A recent study by BPAP (Business Processing Association of the Philippines) and Outsource2Philippines reveals that companies in the Philippines’ offshoring industry are optimistic regarding growth patterns for the coming months. The companies surveyed indicated that they believe their business will grow substantially. The study also indicates that the industry’s suppliers are continuously shifting from voice-based offshoring to more knowledge-intensive services. The survey conjured by BPAP and O2P showed that among the only concerns from the otherwise bright outlook is the shortage of qualified resources in the nation’s labor pool. The issue has proven as the main concern for companies in previous surveys that BPAP has conducted as well.
According to the study, the Philippine outsourcing industry’s top decision-makers are upbeat regarding its political environment. This comes on the back of successfully held national elections in May which respondents claimed had a positive impact on the confidence of clients and investors (more than 80% of respondents indicated that the smooth transition had a positive effect on investor perception). Following the successes of the former president in developing the local BPO (business process outsourcing) industry, the majority of respondents are anticipating an even more successful working relationship under the helm of President Benigno Aquino III.
Among the offshoring companies surveyed, 65% of them stated that they expect their company will grow by six to 50% during the next 12 months. Meanwhile, another 15% indicated that they expect their companies will grow across a range of different sectors - likely a sign of the continued growth of the offshoring industry outside of contact center services.
The Philippines faces a growing list of competing offshore outsourcing destinations. Forty percent of respondents of BPAP’s survey believe that increasing competition is a major concern. Among the nations posing an increased threat to the Philippines’ market share is Central and South America, Egypt, China, as well as eastern European entities such as Poland.
Despite developments in competing locations, the majority of the industry’s representatives feel that the Philippines’ main threat lies within its own borders. Close to half of the total respondents listed the shortage of knowledge workers as their biggest concern. Currently, only 5-10% of applicants of open positions in the industry are considered for hiring - a trend that executives hope will change.
The next concern for offshoring companies is the ability to retain middle managers with over half of survey respondents listing it on their top three biggest issues affecting their growth. Resolving both the middle managers and labor pool issues will prove critical as the industry wants to grow in providing more complex services.