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Cost savings urge many companies to acquire third-party support. They also benefit from outsourcing’s streamlined repetitive tasks and expanded access to skilled professionals. Not to mention, companies considering outsourcing gain the opportunity to optimize robust technologies without spending considerable sums.
These are a few examples of the advantages of business process outsourcing (BPO) to an enterprise. But how about on a worldwide scale? What do service providers offer economically?
Keep reading to learn more about how BPO impacts the global economy.
The BPO industry’s impact on the global economy
Do you sometimes wonder what BPO is and why it has become such a buzzword? There are good reasons for the solution’s growing popularity! BPO aims to reduce business costs, improve output quality, and increase flexibility simultaneously. This practice lets companies refocus their core functions and resources to deliver unrivaled products and services.
As such, outsourcing has experienced growing demand across industries, including healthcare, information technology (IT), and customer service. Grand View Research’s data shows that the global BPO industry gained $280.64 billion in revenue in 2023.
This figure reflects BPO’s significant impact on the global economy. We’ll detail how that is so in the following sections.
Expand job opportunities
The BPO market’s job opportunities are expanding, resembling a giant tree. The industry has roots that stabilize its position as a worldwide economic contributor and branches that symbolize the different career paths available in BPO.
No matter what industry you come from or what diploma you hold, expect to find a vacancy in the BPO market that matches your skills and capabilities. For instance, if you can articulate your thoughts and speak in a friendly way, a customer support role fits you. If you are excellent at handling finances, BPO has related positions such as bookkeepers and payroll officers.
Besides typical BPO roles and responsibilities, you can find rare career opportunities in this sector. Some providers have open positions for modern work, such as the ones below:
- Artificial intelligence (AI) prompt engineers
- Big data architects
- Knowledge management specialists
- Digital marketing analysts
- Social media content moderators
- Speech analytics specialists
- Blockchain developers
- Search engine optimization (SEO) specialists
These job opportunities help lower unemployment rates and increase income levels across countries. A stable source of living assists individuals out of poverty and enhances their quality of life.
Boost gross domestic product (GDP)
BPO services generate economic activity with their numerous job opportunities. BPO employees spend their wages on goods and services, stimulating community supply and demand dynamics.
Because providers serve international clients, the BPO industry generates revenue through foreign exchange. This infusion of foreign currency positively affects a country’s balance of payments and adds to national income, directly contributing to the GDP.
For example, the influx of BPO-driven foreign exchange helps stabilize the Philippine peso. A steady currency maintains the country’s economic confidence, attracting foreign investments and clients.
The taxes BPO companies and employees pay also provide additional government funds to support public services, infrastructure projects, and social programs. Ensuring the smooth execution of these efforts encourages the Filipino workforce to continue working and boosting the national income.
Deliver cost-effective, quality services
BPO firms deliver cost-effective services by leveraging labor arbitrage. Outsourcing lets businesses optimize skilled professionals in regions with lower human resource (HR) expenses, such as India and the Philippines. This capability gives them up to 70% of labor cost savings.
For instance, hiring a software developer in the United States can cost $53.77 per hour. Meanwhile, recruiting its counterpart from India only requires an hourly fee of $4.35.
This cost advantage improves a client’s market standing on a global scale. It allows them to provide goods and services at competitive prices. Moreover, BPO companies specialize in delivering efficient processes. They regularly train their workers to handle tedious, routine functions quickly and effectively.
Minimize operational disruptions
Outsourcing is instrumental in minimizing operational disruptions worldwide, particularly during the COVID-19 pandemic. Research shows that 70% of organizations relied on a BPO company to decrease expenses and address talent shortages in 2020.
Additionally, IT BPO has helped accelerate digital adoption across industries. Service providers invest in robust technologies, including AI, cloud computing, and automation, to enable uninterrupted remote work even during the post-pandemic era.
Here are other ways BPO providers impact daily operations and bolster the global economy despite crises:
- Operational redundancy. Service vendors have multiple headquarters across different regions. This arrangement lets them redistribute workloads and shift operations to less affected areas during localized emergencies.
- Business continuity planning. BPO organizations develop and implement well-structured disaster recovery strategies. These plans include best practices for responding to crises such as data breaches, natural calamities, and power outages.
- Flexible staffing. Providers employ part-time, full-time, and temporary workers. Their scalability allows them to quickly adjust and deploy their workforce based on a client’s changing demands.
- Cross-training. BPO companies regularly cross-train their employees in multiple functions. These reskilling and upskilling efforts ensure third-party workers can pivot to various tasks or roles as needed, preventing bottlenecks and delays.
- Automation. Third-party providers use AI-powered tools to automate time-consuming and repetitive processes, minimizing dependency on manual processes. This capability also ensures business continuity even when emergencies affect personnel.
Support startups and small businesses
BPO firms provide various services and benefits to startups and small businesses. Although these enterprises have a small customer base, they need additional support to lower labor and infrastructure costs.
Outsourcing gives them that advantage through affordable service packages with hourly or monthly fees. BPO workers let their in-house teams focus on developing growth-driven initiatives by taking over duplicate tasks, such as customer support and data entry.
Enabling small businesses and startups to access services and resources traditionally available to larger enterprises fosters economic inclusivity. It promotes a more diverse and competitive business landscape and facilitates innovation on a global scale.
The bottom line
The billions of dollars in market revenue reflects the BPO industry’s impact on the global economy. The expanded job opportunities the business practice offers help boost the GDP of countries it serves, especially developing nations.
Besides, outsourcing is crucial in reducing operational interruptions while delivering cost-effective, high-quality services. The support it provides to small and emerging businesses also establishes economic stability.
Let’s connect and discuss possible options to help your business achieve steady economic standing. Unity Communications houses scalable solutions and well-trained specialists who are ready to meet your fluctuating needs and urgent requirements.
