5 Outsourcing Trends That Will Shape The Philippine BPO Industry

The outsourcing industry has grown tremendously over the years. With the COVID-19 pandemic, it has grown even more as many businesses shifted to WFH setup and had no capability to manage remote teams. In the Philippines, outsourcing is one of the two primary legs of the Philippine economy contributing $26 billion to the Philippine economy in 2019 and employing 1.3 million people in more than 100 firms

Dubbed as the “Call Center Capital,” of the world, the Philippines ranked #6 in the 2020 Tholons Global Innovation Index. When the government enforced lockdowns in March 2020, many industries were badly affected and were  forced to shut down or lay off employees. But the BPO industry was one of the few industries that remained open, underscoring its importance to the Philippine economy. 

Outsourcing has allowed businesses in any sector to transfer some of their non-core functions to a third-party provider. Data from Business Process Incubator revealed that 59% of companies see outsourcing as a cost-cutting tool and 74% of IT companies outsource their processes. Researchers also revealed that the BPO industry will continue its growth with a CAGR of 8% from 2020 to 2025. 

According to the 2021 Forrester prediction, remote work will increase by 300% of pre-COVID 19 level. There is no denying that the BPO industry will continue to grow and we expect new trends to impact operations along the way. Let us take a look at the innovations that will shape the future of the BPO industry. 

1. Knowledge Process Outsourcing

2. Emerging Technologies 

3. Talent Upskilling 

4. Omnichannel Experience 

5. Increased Transparency

Let’s discuss them in detail.

1. Knowledge Process Outsourcing 

Knowledge process outsourcing or KPO deals with specialized knowledge and problem solving. KPO services include financial consultancy, research and development, data analysis and interpretation, and technical analysis. 

KPO in outsourcing will become valuable as industries get more sophisticated and adopt advanced technology. As reported by Curran Daly, KPOs already comprised 34% of the outsourcing industry in 2016.  As the demand for higher-value KPO services increase, the Information Technology and Business Process Association of the Philippines (ITBPAP) expects outsourcing demands to double by 2022, with an estimated worth of $250 million.

The Philippines has emerged as one of the top KPO destinations in the world. There are several factors that contribute to the attractiveness of the country for knowledge process outsourcing: 

Digital Resonance

Digital resonance is dependent on four metrics namely: digital skills of the labor force, legal adaptability, amount of corporate activity, and digital outputs. The Philippines is ranked 29th out of 50 countries in terms of digital resonance, according to the 2019 A.T. Kearney Global Services Location Index

Business Environment 

Investing in KPOs in the Philippines is very attractive given the incentives that investors can get. These may include an income-tax holiday for up to eight years, deduction on labor expenses for the first years of registration, value-added tax exemptions on allowable local purchases such as telecoms and utilities, and domestic sales allowance of up to 30 percent of total sales. 

People Skills and Availability

The 2019 Global Talent Competitiveness Index by French business school INSEAD ranked the Philippines 58th out of 125 countries. As for availability, the Philippines has an educational system that is highly patterned after Western countries. Its legal, paralegal and finance professionals are one of the most sought after by clients from countries like the US, Canada, Australia, and the UK. 

Labor Cost

The Information Technology and Business Process Association of the Philippines estimates that all-in costs for English-speaking professionals in the country is among the lowest in the world. This makes Filipino talents more competitive skill and cost wise. The inflation rate is also predictable and manageable.    

Infrastructure

There are plenty of low cost but high quality real estate options in both urban and rural centers in the country. There is also a stable and affordable telecommunications infrastructure as well as reliable energy supply and round-the-clock low cost transportation. 

Government Support 

The Philippine government provides continuous support for the BPO industry despite uncertainties in and out of the country. The current administration has promised all out support and protection for the industry. 

2. Emerging Technologies  

The growth of the outsourcing industry has been fueled by the emergence of new technologies that have been developed over the past few years and have slowly impacted the BPO industry. Let us take a look at these technologies.  

Robotic Process Automation

Robotic process automation (RPA) integrates bots and artificial intelligence on a user interface to complete work faster at a cheaper rate.  It can help streamline time-consuming tasks like moving files and folders, making calculations, and analyzing the behavior of website visitors. This way it will help lessen the workload of both in-house and offshore team members so they can focus on more critical operations. 

For most businesses, it can be costly to employ thousands of people for small tasks such as processing insurance claims, data entry, and others. These functions can be easily handled by computers and can be automated. In return, businesses can hire more highly skilled workers. Around 700,000 medium and high skill jobs would be created by 2022. Automating processes can help bring innovation to your existing clients, improve productivity, and regain labor cost advantage. 

Cloud Computing 

Managing a state-of-the-art office space and infrastructure can be expensive and difficult. Data security can also pose a challenge. When your data is consistently hacked and compromised, it is hard to maintain clients. This is where investing in cloud computing can make sense to your business. 

Cloud computing has become a game-changer for most businesses. With the technology, businesses can provide themselves with a secured way of backing up their data offsite and ensure their business continuity. A 2018 Deloitte study found that 93% of businesses were considering, if not, already using cloud computing. Being in the cloud allows your business to expand and scale operations without worrying about your on-site IT infrastructure.

Social Media  

One of the biggest outsourcing trends is social media.  Let’s face it. Who doesn’t have a social media account? In fact, your next big client could be on Facebook or LinkedIn. In the Philippines, there were 73 million social media users as of January 2020 according to data from the Digital 2020: The Philippines report. In the same period, social media penetration was at 67%. 

Social media can provide your business with a wealth of consumer data and feedback. It can give your business an effective channel for connecting with people online. You can leverage social media for your marketing campaigns. More importantly, it can be an effective tool for positioning your business front and center. 

3. Talent Upskilling 

Gone are the days when BPOs were synonymous with call centers. Nowadays, we see BPOs working on business functions like accounting, human resources, web design, and other functions. Outsourcing companies are now upskilling in order to deal with skills shortage. This has never been more evident then during the pandemic. 

According to the Talent Trends 2019: Upskilling for a Digital World conducted by PwC, 79 percent of Chief Executive Officers are concerned about the current skills of their workforce. They were worried that they wouldn’t be able to meet the demands of a dynamic workplace. Today, we see outsourcing companies upskilling and reskilling their employees to meet this sense of urgency.  

The Cambridge dictionary defines upskilling as the process of learning new skills or teaching new skills. Reskilling, on the other hand, is the learning of new skills so you can do a different job or train people to do a different job. According to Frank Koo, LinkedIn Head of Asia, a lot of employers prioritize skills over previous experience and education when searching for talents. 

Upskilling provides employees with relevant skills that can help them provide the best services possible. With companies already automating their repetitive tasks, they can now focus on more specialized knowledge. By upskilling, you can elevate and expand the level of service you provide to your customers.   

With automation, some companies face the spectre of losing their low skilled workers. For this reason, businesses have trained their employees with other skills to meet the demand for high-skilled operations.    

Upskilling can be costly but can have huge benefits in the long run. Here are some tips on how to make upskilling your employees effective:

1. Start small  

When your employees have a hectic schedule and tons of workload, it can be hard to provide them with formal training.  However, there is a way and that is a way through bite-sized education or microlearning. These lessons won’t take much of the time of your employees as they are only three to six minutes long. 

In addition, bite-sized modules are easier to host and share online. It is also very accessible for remote and deskless workers as they can be uploaded onto a cloud-based learning management system that is accessible anywhere.

2. Set up mentorship programs 

According to Forbes, 70% of Fortune 500 companies have mentorship programs in place. Connecting new employees with your more experienced staff fosters a sense of community and provides them with the training they need at the same time. 

With a mentorship program, new team members can get the guidance they need when stepping into a new role. With programs like these, it is important for the mentor and the mentee to connect.

3. Encourage Self-Training

Managers have a huge role in helping their employees upskill. As a manager, you can give them time to attend trainings, workshops, or seminars. By letting them do so, it will boost employee-employer trust. Not only that it will also allow the rest of the team to gain insights and ideas that they may have missed. 

Management can also provide rewards and incentives to employees who upskill during their vacant time. Not only will this give you an opportunity to promote from within but also ensure the loyalty of employees.

4. Foster A Learning Culture

Learning in the workplace should be an ongoing process. Aside from providing formal training, managers should constantly provide feedback to team members. Employees must have an opportunity to learn and grow. 

Make learning a part of your business strategy. It is the key to optimizing and retaining talent in your company and keeping them happy. 

4. Omnichannel Experience 

Today, businesses are facing a new breed of customers. They will face customers that are more demanding than before. Customer expectations have skyrocketed in the last few years. Businesses should therefore invest in improving their customer experience. 

Customers would not just be coming from your website, they can also come from your social media channels, chat, and others. For this reason, you need to make sure that you have all of your bases covered. Improving the whole customer experience should be your top priority. 

How important is customer experience to your business? 86% of buyers will pay more for a great customer experience. Meanwhile, 32% will walk away from a brand they love after a single bad experience. In the future, customer experience will take the center stage so you need to make sure to meet the customers where they are, be it in social media, website, email, or voice. Here are some tips on how to make the omnichannel experience work for your business: 

Provide consistency through all channels 

Data from the Aberdeen Group reveals that companies that provide top notch customer experience across various platforms are able to retain 89% of their customers compared to 33% that don’t. These statistics are proof that a consistent customer experience can significantly impact business growth and profitability. 

Some customers complain about websites being unreachable, showing incorrect information, or being difficult to navigate. You want to make sure that your website is optimized for all devices. The data you provide should be accurate and unified whenever customers switch channels. 

Be customer-centric 

Your omnichannel strategy should not be about you but should focus on your customers. No one wants to know about your accolades or who your corporate officers are. Customers came to your website or social media channel because they have a problem and are looking for solutions. 

To make your omnichannel strategy work, you need to understand how your customers behave, the channels they are using, and what influences their buying decisions. Once you have sufficient data, create a plan and personalize your offering. 

Create a self-service channel 

For some businesses, employing a good amount of customer service and support reps to handle complaints, inquiries, or tickets can be a challenge. One good solution to help customers resolve issues is a self-service channel. Customers want to find solutions in their most convenient time. This is how a self-service channel can be of help to them. 

A good self-service channel is an FAQ page on your company website, app, or social media. While they may not be able to find the answers to their questions on these pages, it can at least route them to the right department or person who can address their concern. As a result, it can make the customer journey easier and more simplified. 

Nowadays, when customers encounter some problem with your product or service, they want to find the answer themselves. Self-service is becoming the preferred method by customers. In fact, 40% of consumers now choose self-service over human contact. In addition, a study by Dimension Data revealed that 73% of consumers prefer to use a company’s website instead of using social media, SMS, and live chat. 

Optimize email marketing 

Some customers still prefer receiving emails from businesses. In fact, data from US Digital Marketers reveals that email is 56% effective to customers. It is a secured platform trusted by customers and allows your company the ability to offer branded messages and upsell.

With email marketing, you need to determine which information should be omitted. You should be able to strike a balance between not enough and too much information. You don’t want customers getting discouraged because they might think you sent them a spam message. Just like in the other channels, customers expect a fast response from your end.

Create suitable content

Without good content, none of the above techniques will be effective. To be able to create good content, you first need to understand your customers, their preferences, purchasing behavior, the challenges they face, and others. Once you have done this, it would be easier for you to connect and convey your message. 

When creating content, ensure that it is something your customers can comprehend and is interesting to them. Good content will arouse interest and engagement. You would want to share information that can benefit your customers. 

5. Increased Transparency 

Transparency is important in securing the trust of your customers. It will also result in better partnerships between clients and suppliers. In a highly competitive environment, you also need to adjust your policies or risk losing business to your competitors.  

Gone are the days of predetermined contracts. The days of usage of these fixed agreements will keep dwindling as the years go by. We will see customers negotiating price, scope of work, exact duties, delivery, and others with their providers. This will help reduce misunderstandings, overpaying, and disappointing results. Increased transparency through customized contracts is one of the biggest BPO trends that will shape the future of the industry,

Identifying these trends can have a huge impact on your success with outsourcing. 

Why Outsource with airisX?

airisX isn’t your run-of-the-mill, inflexible outsourcing center. We combine deep BPO experience with the flexibility of pioneering startup spirit. Whether you need a complete solution for your ecommerce business, a customer support team, a part-time Virtual Assistant, or anything in between, airisX can help you build a custom solution. We work with companies across many industries. 

The airisX founding team has years of experience in global outsourcing solutions, business operations, ecommerce, and Social Media. We combine our varied experiences into a single place for our clients – all while maintaining a cost that is substantially less than outsourcing companies in single verticals.

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