PH 2nd most attractive outsourcing site
The Philippines rose a notch to rank second among the most attractive global outsourcing locations on the basis of risks, costs and conditions, according to the latest report by global real estate advisor Cushman & Wakefield.
In a report entitled, “Where in the World? Business Process Outsourcing (BPO) and Shared Service Location Index,” Cushman & Wakefield noted that two of the Philippines’ strongest points would be the cost of labor and the availability of skilled, English-speaking workers.
“One of the most significant changes in the global BPO market is the emergence of the Philippines as the world’s global leader of BPO and shared services operations,” the report stated.
Last year, the Philippine IT-business process outsourcing posted more than 18 percent growth in revenues to an estimated $18.4 billion, supporting more than 1 million jobs as of end-2014.
“A demand for English proficiency from English speaking industrialized nations is more than met by the Philippines, which graduates some 470,000 English proficient college students every year and has a national English proficiency rating of 92.5 percent. The English dialect of the Filipino workforce is also well received in the US,” Cushman & Wakefield said in the report.
“The employability of its students also remains a key factor in the migration of operations from India, where some 30 percent of students are regarded employable compared to 10 percent in India. This gives the Philippines a competitive advantage in enabling companies to reduce investment in their in-house training programs, which can be tantamount to a significant overhead. In addition, it also came 82nd out of 146 in the Forbes ‘Best Countries for Business’ survey, outplacing both India and China,” it added.
The BPO and Shared Service Location Index assessed 36 countries that had been the largest recipients of foreign direct investments in the BPO sector over the last five years up to the third quarter of 2014, as well as where the creation of the greatest number of BPO-related jobs were observed. The assessments were based on costs, risks and conditions.
The Philippines ranked second in terms of cost; 34th in terms of conditions; and 27th in terms of risk.
Vietnam meanwhile topped the list of most attractive global outsourcing locations for the first time since the index was first published by Cushman & Wakefield.
“Vietnam has risen to the top of our ranking. Although this may come as a surprise for some, Vietnam has become particularly attractive due to a number of ongoing reforms that have been implemented by the Vietnamese government,” the report stated. “Large-scale investment in both education and training has helped many Vietnamese develop high levels of literacy and numeracy skills that have enabled its workforce to move away from low productivity agricultural jobs into higher productivity office work.”
Ranking third on the index was Bulgaria, followed by Romania, Peru, Malaysia, El Salvador, Brazil, Hungary, and China.
