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Industry Research : Good News! Your Job's not Going to the Philippines
Vietnam is now outsourcers' preferred host nation, but Bulgaria is making a tilt for the top spot, according to real estate outfit Cushman & Wakefield's annual "Business Process Outsourcing (BPO) and Shared Services Location Index".
The study (PDF) ranks nations by costs, risks and conditions, with a 50/20/30 weighting for each factor.
Vietnam topped the table, the report says, thanks in part to "Large scale investment in both education and training [that] 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." It also doesn't hurt that Vietnam has "... wages still well below some of its Southeast Asian neighbours".
India's at number 20 on the table, and the report says that's because the Philippines pinched "some 70% of its voice and call centre operations". One reason for that move is that 30 per cent of Filipino students are work-ready, compared to 10 per cent of Indians.
Students are also a reason for Bulgaria's rise, as the report says the nation produces more than 60,000 graduates a year of which about half "obtain degrees in majors suitable for the needs of the BPO industry." That 73 per cent of Bulgarians learn two languages other than their native tongue helps, too, as do low taxes
Romania benefits from being the world's seventh-ranked nation for broadband speeds, but tumbled from the top spot because of accelerating inflation.
Here's the top 10 from the report.
Nation Rank Conditions Risk Cost 2014 rank
Vietnam 1 15 28 6 5
Philippines 2 34 27 2 3
Bulgaria 3 3 17 10 14
Romania 4 5 10 12 1
Peru 5 29 16 5 7
Malaysia 6 25 9 8 11
El Salvador 7 36 32 1 6
Brazil 8 26 15 9 18
Hungary 9 9 20 15 17
China 10 19 13 14 10
Prominent Reg-reading nations made the top 40. The UK, Australia and Canada occupy slots 27, 28 and 29 respectively. The USA is ranked 32nd.
Lots of BPO jobs are in call centres, so the move to Vietnam and Bulgaria doesn't quite post the threat to IT pros that big consultancies and system integrators. And these days the telephony, CRM and self-service systems on which call centres rely can be cloud-hosted-and-administered, meaning that complex IT jobs can stay in nations with higher populations of highly-skilled workers. But with education clearly an attractor for outsourcers, even those jobs probably aren't safe. The report also suggests things are going to get tougher for BPOs, with outcome-based contracts coming into vogue and automation – even robotics – reaching outsourcers' agendas.
Posted by Veronica Silva Cusi, news correspondent
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Published: Wednesday, April 1, 2015