2021 Look Back: The State of BPOs in the Philippines amidst the Pandemic

“In the face of challenges like natural disasters, the financial crisis and, most recently, the Covid-19 pandemic, the [Philippines’ Business Process Outsourcing] industry has been able to sustain its annual growth both in terms of jobs and revenues” – Rey E. Untal, IT and Business Process Association of the Philippines (IBPAP) President

headphone of employee in business process outsourcing in the Philippines

The Philippines’ Business Process Outsourcing or BPO industry has been the backbone of the country’s economy since its beginnings in the early ‘90s contributing nearly $30 billion to the country’s economy each year. Now more than ever, the Philippines’ Business Process Outsourcing industry continues to be a lifesaver, not just for the economy, but for over 1.3 Million Filipinos. According to a 2021 article, more than a million Filipinos were employed in over 1,000 BPO companies in 2019, showing an average of  8-10% growth annually. With 10-15% of the global BPO market held by the Philippines,  the industry is expected to increase its revenue by 8% (vs. 1.4% in 2020) by the end of 2021.

Not surprisingly, Philippine BPO firms managed the pandemic better than almost any other industry. In a 2021 event, the IT and Business Process Association of the Philippines (IBPAP) President and CEO Rey E. Untal shared that there was a notable demand for IT outsourcing in the latter part of 2020 as global businesses invested heavily in digitization to mitigate the remaining risks presented by the pandemic and as a way to enhance their business continuity plans.

Given these data, let’s talk about the factors that shaped 2021  for the BPO industry:

 

BPO as an Essential Industry

“We were marked as an essential industry early on and received quite a bit of concession that helps the sector [to] mobilize both cargo and personnel,” Untal said. “This then allowed us to achieve enhanced operations alongside our service providers while ensuring the health and safety of our employees.”

According to the IBPAP, demand from several industries like healthcare, e-commerce, retail, banking, financial administration, and even the telecommunications sector has helped BPOs not only stay afloat but grow during the pandemic. Being on heightened restrictions or lockdowns has magnified the need for businesses to be able to outsource their manpower from different locations all over the world.

 

Hybrid Work

As an essential industry, business continuity for the Philippines’ Business Process Outsourcing industry was of utmost importance when the pandemic hit. Taking the safety of employees into account, most BPO companies took on a hybrid work or remote work arrangement. 

In a 2020 survey, data showed that the BPO industry (at 31%), information and communication sector (at 9.79%), and healthcare industry (at 8.51%) led the transition to work from home during the Enhanced Community Quarantine implemented all throughout the country.

“There has been a growing requirement for work-from-home delivery as clients realized and accepted that remote work can be done without necessarily sacrificing employee activity and quality,” Untal said.

Currently, the Philippine BPO industry has an average ratio of 64% remote work and 36% on-site staff on average with more than a hundred companies implementing a 90 to 100% remote working arrangement according to IBPAP.

Apart from this, the IBPAP also recorded that most BPO companies allocated an additional budget for employee assistance during the pandemic.

 

Outsourced Creatives Gaining Traction

The Creative Economy Council of the Philippines (CECP) estimates that 1.3 million to 1.5 million Filipinos are already on international online platforms for creative work and services like web design, multimedia content, and editing.

According to CECP President Paolo A. Mercado, digital creative and digital content services (like digital marketing, web design, and graphic design) were the least affected segments in the creative sector last year due to the remote work flexibility it offers.

An article by the Philippine Department of Trade and Industry highlights a “Creative Economy Roadmap” submitted by the CECP to the Department of Trade and Industry (DTI) and Board of Investments (BOI) which sets five development sectors for the creative economy, including advertising, film, animation, game development, and design.

The roadmap aims to make the Philippines the top creative economy in the Association of Southeast Asian Nations region by 2030 in terms of the size and value of creative industries, as well as the competitiveness of talent and content from an ever-growing pool of professionals in the country.

 

Multiplier Effect on the Philippine Economy

Sustained growth in Philippine BPos has also triggered a multiplier effect in other business sectors. The IBPAP notes that BPOs are among the major sources of foreign exchange in the Philippines and have been a driving force as well for the real estate market, particularly for office space.

On average, about 45% of the total demand in real estate was accounted for by the BPO sector. But the multiplying influence of the Business Process Outsourcing industry does not stop there. 

According to Jobstreet, business process outsourcing was the top hiring industry in the country as of September 2021 – taking up 22.4% of job postings on the website for Call Center and IT-Enabled Services.

 

The Emergence of a Growing Need for BPO in Healthcare

The healthcare sector makes up over 10% of the BPO industry, providing services to companies through the processing of medical billing, medical coding, case management, benefits management, and fraud/abuse management to name a few.

According to Healthcare Information Management Association of the Philippines (HIMAP) Vice President Vincent Remo, companies in the healthcare and medical industries have been dealing with rising cost and margin pressures, which makes outsourcing workers in the Philippines – with its wide selection of experts and professionals, even US registered nurses! – the most cost-friendly and time-effective choice for them during the pandemic.

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