It Outsourcing Companies In The Philippines – Supporting the growth and expansion of the IT-BPM industry provides many opportunities for other industries. In addition to its benefits for the transportation, telecommunications, hospitality and retail sectors, a moderate outsourcing industry has benefited the real estate sector as a result of increased demand for office space and residential premises.
Business Process Outsourcing (BPO) refers to the process of contracting with a third-party provider to handle or perform core business functions of an organization. Over the past decades, the BPO industry has transformed itself from providing low-level, unstructured single-focus services to offering a wide range of services and capabilities to clients around the world.
It Outsourcing Companies In The Philippines
The BPO industry, since its inception, has grown at a rapid pace and gained significant traction in global market share. This growth is attributed to the increasing need for organizations to (1) reduce costs, (2) focus on their core business activities, and (3) address issues such as shortage of skilled workers.
Outsourcing In India
Based on a 2021 report published by Deloitte, IT services (54%), finance (44%), payroll services (32%), and customer service or contact centers (22%) are the most outsourced services. Despite the Covid-19 pandemic and recent economic interventions, the global BPO industry has grown to be an industry valued at USD 164.7 billion by 2022 and is expected to reach USD 381.62 billion by 2030.
Globally, India is number one in outsourcing services. It is closely followed by the Philippines and the United States. India’s BPO sector is strong, offering 24/7 services and advances in technology. The market also takes great pride in its in-house talent, most of whom are experts in IT and software development. While India is highly regarded for its IT expertise and impressive BPO-support infrastructure, the Philippines’ biggest draws are its soft skills, including customer support, English language proficiency and cultural affinity for North American markets. A force to be reckoned with in the BPO industry.
According to an article published on Rappler, the Philippine BPO industry officially began in 1992 when Frank Holz, under the Accenture Group, built the first contact center in the country. Three years later, in 1995, Congress passed the Special Economic Zones Act, whose objectives included turning selected areas into highly developed ecozones and promoting the flow of foreign and local investors into these zones. The act also led to the establishment of the Philippine Economic Zone Authority (PEZA).
In 2000, the BPO industry accounted for just 0.075% of the country’s GDP, and it has grown exponentially since then. In an article published in
Philippines: Estimated Number Of Employees Of Biggest Bpo Firms 2022
, IT and Business Process Association of the Philippines (IPPAB) president Jack Madrid said the industry contributed at least 7% to the Philippine economy during the pandemic.
According to IBPAP, the BPO industry currently employs 1.44 million full-time employees and is expected to register revenues worth $29.1 billion in the first half of 2022. This is due to the demand of global customers, high confidence in the work. Home setting by customers of contact centers and business process services, and growth in e-commerce, financial technology, healthcare and technology.
The BPO industry must play an important role in the recovery of the Philippine economy from the pandemic. Although it has been hit hard by Covid-19, it has recovered relatively quickly and invested in infrastructure that has enabled it to continue its operations. According to Madrid, the fast recovery of the industry is expected to spread until 2022 and will continue to increase the demand for IT-BPM services, contributing positively to securing jobs, driving investments, stimulating rural development and creating demand for real estate.
In choosing an outsourcing destination, decision makers mainly focus on three selection parameters: control, costs and labor. All these three parameters have a significant impact on the long-term competitiveness and sustainability of service providers.
Business Process Outsourcing: A Guide To Types, Trends, & More
In terms of regulation, decision makers assess locations’ business regulation, tax payment practices and minimum capital requirement. Costs, including wages and infrastructure costs (eg, office space, fit-out costs) are also important considerations for location viability.
In terms of labor, service providers measure the availability (quality and quantity) of potential space and the depth of professional and technical talent. The Philippines is considered a top destination for the BPO industry; It is the market leader in terms of voice-related services, and is rapidly expanding its capability to provide non-voice business process management (BPM) and IT services to an expanding list of global clients.
The Covid-19 pandemic has accelerated the digital transformation of the BPO industry, particularly the rapid adoption of automation technology to allow for a work-from-home (WFH) system. In an article published in the Philippine Daily Inquirer, Finance Secretary Benjamin Diogno said the long-standing issue of the work-from-home (WFH) arrangement for the IT-PPM sector has already been resolved. In practice, BPO companies can retain their concessions and pursue the WFH option, and they can transfer their registration from PEZA to the Board of Investment, a win for the industry as it tries to retain talent.
Although BPO companies are gradually returning to their offices, many employees are being offered options for hybrid work, onsite work or WFH arrangements. But as regulations continue to ease and BPOs expand rapidly, we believe demand for office spaces and co-working spaces will increase.
Top Outsourcing Companies In The Philippines
Being a top outsourcing destination, many top BPOs are currently operating in the country. The figure below shows the largest BPO in the country by number of employees.
Figure 1 shows that Concentrics is the leader in terms of number of employees, followed by Accenture, Teleperformance, Alorica and Sytel Group.
Concentrics first started operations in the Philippines in 2007. Since its inception, Concentrics has established itself as a multi-award-winning customer experience (CX) solutions company with the largest employee footprint in the Philippines with approximately 90,000 employees. Concentrics continues to expand and grow despite the challenges posed by the Covid-19 pandemic. According to Statista, Concentrics generated US$5.587 billion in 2021, of which US$1.34 billion came from its Philippine operations. In 2022, Concentrix expects a tight revenue range between USD 6.365 billion and USD 6.415 billion.
Accenture is one of the largest BPO companies in the Philippines and has been certified as a Best Place to Work by the Great Place to Work Institute (2021–2022). 50.533 billion US dollars in fiscal 2021 and 16.6 billion US dollars in the third quarter of 2022 ended May 31, 2022, the Dublin-based consultancy said.
Why Foreigners Outsource To The Philippines? (infographic)
Teleperformance is another BPO company in the Philippines that offers digital integrated business service and experience management to its clients. It employs approximately 56,000 professionals in the Philippines and, like Accenture, has been Great Place to Work® certified for four consecutive years. In 2021, Teleperformance reported consolidated revenues of €7.115 billion (US$8.4 billion; based on €1 = US$1.18) and €3.946 billion in the first half of 2022.
Alorica started its operations in the Philippines in 2004 and has since been expanding its customer base and BPO market share in the country. It is a CX management and BPO services solutions provider serving companies of any size and industry globally. It has about 55,000 full-time employees in the Philippines. Alorica’s peak revenue is $2.4 billion in 2021, according to online jobs site Zippia.com.
Sitel Group, one of the largest global providers of CX products and solutions, is the fifth largest BPO company in the Philippines by employee count. It started its investment in the Philippines in 2000 and since then has shown exceptional growth, opening employment opportunities for approximately 37,000 Filipinos. Sitel Group has a global revenue of more than 4 billion USD by 2021.
Figure 2. Office footprint in square meters of BPO firms in the Philippines. Source: Data (H1 2022).
Why Foreigners Outsource To The Philippines [infographic]
In terms of total office space occupied, Concentrics tops the list, not surprisingly, as it reports continued growth in full-time employees year over year. H1 2022 data shows Concentrics has an office footprint of 241,403 square meters in Metro Manila and 98,729 square meters in the provinces, for a total area of 340,132 square meters. The company has significant investments in the provinces, particularly in Angeles, Metro Cebu (Cebu City, Lapu-Lapu and Mandaue), Davao City and Naga, taking advantage of the huge talent pool these locations offer.
In terms of occupied office space, Accenture ranks second. Its approximately 72,000 full-time employees occupy the company’s total office footprint of 196,290 square meters based on ‘H1 2022 data. Of this, 167,868 square meters are located in Metro Manila and 28,422 square meters are located in Metro Cebu.
Teleperformance follows Accenture with a registered office footprint of 164,650 square meters in the Philippines: 113,250 square meters in Metro Manila and 51,400 square meters in the provinces (Cavite, Baguio, Metro Cebu, Bacolod, Davao City, and Cagayan de Oro).
Not far behind is California-based BPO firm Alorica Teleperformance.
How The Government Enhanced The Bpo Industry In The Philippines
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