Philippine Outsourcing ca. 2020: A Leader In Niche Markets?

The Philippines has been getting accolades regularly from independent foreign outsourcing trade associations. We bag either the top spot or number two. Most recently, UK’s National Outsourcing Association (NOA) named us best BPO destination. Apparently, we’re the best in what we do.

Are we doing enough though? The problems that have plagued us ever since is still very much in our midst. Or more like hanging over our heads like a guillotine’s blade. To outsiders, it may look as if with the thousands of jobseekers joining the BPO bandwagon, we’re in like Flynn, with a labor pool that is well and thriving. But upon scrutiny, Philippine BPO is challenged by a high turnover rate made worse by a low hiring rate, with a deadline to beat (1million employed by December 2010). If we continue down this path, we may soon find the Philippines, proudly a first wave BPO destination country, edged out by new wave sites or by other still rapidly expanding first wave destinations.

A BPO executive from India, Dr. Ganesh Natarajan, made a forecast that the future of outsourcing belongs to Asia, that in 10 years we will have as much as 85% market share IF, among other things, the Philippines keeps expanding into vertical or domain services and China adheres to offering global clients low-cost products and “outsourced onshoring services” domestically. Well and good in a perfect world. In a perfect world, China would be satisfied with that. But not likely to happen judging by China’s beefed-up English-language training. And their beefed-up skills and processes inventory. And their beefed-up infrastructure. And here’s the clincher, their labor pool (like India’s) is not likely to dry up any time soon– they can easily scale up or down their workforces AS NEEDED.

The Philippines does not have that luxury. Therein lies our problem. Outsourcing experts say that collaborations and partnerships are potential areas of cooperation with other outsourcing destination countries and the means for how Asia will get that huge outsourcing market share. Unity in numbers. Asia will rock the outsourcing game well into the year 2020. First things first though. Innovation, if not the size of our population, will ensure that we will always be a major player in outsourcing. Being a country with one of the highest literacy rates in the world, KPO is a very real opportunity for the Philippines. In the same spirit that China is improving their English-language skills to gain call center space, we can also push ourselves to train further with the goal of diversifying into more complex fields like graphic arts and design, animation, accounting, finance and engineering. Not to diversify is suicide. The onus is also on the country’s educational system to make sure programs in universities will produce graduates who can adequately meet global standards. Let’s not forget to bring the state into this, too. Drum roll please! Infrastructure, infrastructure, infrastructure.

I hope this country realizes soon enough that just as we are known for our proficiency in written and oral English hence our call-center domination, our hope for maintaining our lead position well into the future lies in our willingness to branch out and go into more niche markets, i.e. higher-tier and non-voice services, otherwise known as Knowledge Process Outsourcing (KPO). That way we can have our pick of countries we want to collaborate with and not the other way around!