The global business landscape has experienced a seismic shift due to the Covid-19 pandemic, impacting economies around the world. In its aftermath, outsourcing has emerged as one of the most robust and flexible strategies that helped businesses return to normal.

In this article, we delve into the Philippines' business process outsourcing (BPO) industry, and how it has stood out as a resilient and essential sector even in the face of unprecedented challenges.

The Philippine BPO Industry: A Brief Background

The BPO sector has long been a cornerstone of the Philippine economy, second only to remittances from overseas Filipino workers.

With roots that can be traced back to the early '90s, the country's BPO industry has flourished due to robust government support and has become a significant employer in the country. In time, the BPO industry has become one of the highest contributors to the nation's GDP.

Here are some fast facts about the BPO industry:

• 2019 Revenue: $26 billion
• Employment: 1.3 million people
• Primary Markets: U.S. and Europe

Today, outsourcing remains a crucial strategy for businesses in the West that aim for cost-effectiveness and operational efficiency.

Resilience and Adaptability in 2020

To arrest the spread of the virus, the Philippine government implemented a nationwide lockdown in March 2020.

While other sectors struggled and "non-essential" businesses were shuttered, BPOs quickly adapted to remote working conditions, which helped sustain employment and contribute to economic stability.

According to a survey conducted by Sprout Solutions, the BPO sector was among the biggest industries that allowed their workers to work from home while the Enhanced Community Quarantine was in full effect (31%), followed by information and communication (9.79%), and healthcare (8.51%).

Immediate Effects of the Covid-19 Pandemic

As more businesses worldwide shifted to remote work, the demand for IT and digital services increased. These support roles are often outsourced to countries like the Philippines.

The rapid digital transformation that the local industry underwent has made outsourcing even more attractive.

For instance, the Healthcare Information Management (HIM) sector in the Philippines has capitalized on the large number of underemployed healthcare professionals, integrating them into the digital economy. This not only boosted profit margins for companies in the Global North but also provided employment opportunities in the Philippines.

The Philippine Advantage

As we reflect on the resilience of the BPO industry in the Philippines, it's crucial to explore the unique advantages that helped this sector thrive during a period of great uncertainty.

Skilled Labor Force

The Philippines offers a highly skilled labor force proficient in English. The country's focus on education, particularly in STEM fields, ensures a talent pool that can handle a wide array of services, from customer support to more complex tasks like programming and data analysis.

Competitive Cost Structure

The cost of labor in the Philippines is notably lower than in Western countries, offering substantial cost savings without compromising on quality. This competitive cost structure enables businesses to allocate resources more efficiently.

Robust Infrastructure

The Philippine government has invested heavily in building a strong technological infrastructure. With reliable internet and modernized facilities, BPO companies can ensure consistent and high-quality services.

Time Zone Flexibility

The Philippines is strategically located to cater to various time zones, making it an ideal choice for businesses that require 24/7 operations.

Read More: Why Businesses and Firms Outsource to the Philippines

Conclusion

The COVID-19 pandemic has significantly altered the outsourcing landscape, transforming it from a peripheral business strategy to a central component of business resilience, flexibility, and innovation. The BPO sector in the Philippines has not just survived the pandemic; it has thrived, signaling its pivotal role in shaping a resilient and flexible global outsourcing landscape.

As remote work becomes standard, the growing demand for IT and digital services and the increased focus on risk mitigation underscore the evolution of outsourcing partners into strategic allies.