Indian BPO Sector employs 2 million direct employees: Tholons Research

Indian and Philippines have become the two major outsourcing destinations of the world and closely behind are the countries like Malaysia and China. The total outsourcing revenue of India stood at USD 59 billion in 2011 which is 51% of the Global BPO industry. These facts were revealed by Tholons Research a research firm having base in Bangalore. The Indian BPO sector is said to employ nearly 1.98 million people directly and 7.5 million people indirectly.

According to Tholons Research, Philippines is behind India with a total revenue share of USD 11 Billion in 2011. The revenue in the year 2008 was USD 6 billion. Philippines is said to be the leader in voice based outsourcing and in recent years a lot of call centre work has gone away from India. The main reason behind that is the fall in English Proficiency among the people of India. The BPO sector in Philippines is said to employ 6, 40,000 people directly and 1.3 million people indirectly. There is a marked increase in the number of people being employed as the number of people employed in 2008 stood at 4, 00,000.

The total IT spending in 2011 was about USD574 billon and BPO spending was USD158 billion. According to NASSCOM only 15% of this is outsourced to countries like India, Philippines etc. This explains the tremendous scope which these countries have. There are many other developing economies particularly countries in Latin America and Africa who are trying to make their presence felt in this industry.

According to a study done by Tholon in 2009, the top 5 offshore nations were identified as

  • India
  • Philippines
  • China
  • Brazil.

The nations that are fast catching up with the leaders are Canada, Russia, Mexico, Vietnam & Poland.

Countries like Philippines and Malaysia are taking very aggressive steps to increase their market share in the BPO segment. Government of Philippines is actively support BPO organisations by taking steps to increase the English Proficiency of the people. The Malaysian government along with its IT-BPO association called Outsource to Malaysia have established a Multi-media Super Corridor to attract companies to Malaysia. Companies setting up their business in this MSC would get a tax incentive.

Companies world over are in the pursuit of finding new ways of doing business. There is tremendous pressure on these companies to cut down the cost especially when the global economy is slowing down. There will be an increased trend to outsource the business activities to offshore locations as part of cost cutting. The BPO companies will have to constantly innovate as the clients are also cutting down their spending on outsourcing activities. The Indian BPO firms will have to move away from voice based services and get into critical areas of non voice based services so as to achieve growth. The firms will have to move up the value chain and add more value to the clients with the help of services like SAAS, BAAS and by making extensive use of cloud technology. The situation might get even complex in the future and the challenges will increase manifold because of outsourcing becoming a major issue in the run up to the next US presidential elections and especially when the current US President Mr. Barack Obama has taken a stand against outsourcing to countries like India.

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