To date, there are 5 Business Processing Outsourcing (BPO) hotspots depending on the requirements of outsourcers: China for technical and manufacturing assistance; Mexico for manufacturing; the US for analytical and creative services; India for cyber technology; and the Philippines for administrative functions.
Of these BPO centres, India and the Philippines are the most preferred countries to outsource workers mainly because they offer the least expensive labour forces plus the educational and technical qualities of their people are at par with their other competitors.
There was a time when India overtook the Philippines in terms of workers they deployed. One factor involved is their demographics profiles. It is not easy for the Philippines to beat India where there is a great disparity in the numbers of employable population. India has about 500 millions at ages ranging from 25 to 54 while the Philippines only has 38 millions in the same age bracket.
However, it has been noted that in the past five years, the Philippines’ BPO sector is growing up fast while India has lost 10% of its global share of outsourced voice-related jobs.
This may have been because demography is not the only factor involved. Proficiency in the English Language, both written and oral, also plays a big part in this outsourcing market. English, being the second language in the Philippines both in education and commerce, gives the Filipinos an edge over their Indian counterparts. Furthermore, the country, with the more than a hundred different dialects of its population, has adopted English as the common medium of communication among its people— hence their fluency in spoken English.
A manager at an Indian HR admits the problem that he sees is clear communication. He says that Indian accents when speaking English means that “people from other countries are not able to understand [them]. Also, Indians prefer for more secure day jobs over BPO which they consider too temporary.
Other factor that influenced this turn-about of outsourcing trend is the active participation of the Philippine Government in supporting its the BPO sector. It has passed key legislation such as the Privacy Act, which helps to protect the Philippine BPO industry. This Act puts in place international data privacy standards beneficial especially for the many sensitive information handled by the BPO sector, including banking details.
These initiatives of the Philippine Government contribute to the 21% growth of the BPO industry in 2011 and still growing.
On the contrary, the Indian Government is not as helpful and their infrastructure is a problem as well.
Knowing these facts, it is small wonder then that most companies prefer to outsource to the Philippines, wouldn’t you?