The global business process outsourcing market is growing rapidly and is expected to continue its upward trajectory. Small businesses are particularly interested in outsourcing as they see it as a means to grow their company, save time, and access global experts. With these impressive statistics, it’s no wonder that companies are keen to explore the latest trends in outsourcing. In this blog post, we’ll delve into the future of outsourcing and explore the trends that are set to shape the industry in the coming years.
The Changing Landscape of Outsourcing: Prioritizing Security
The COVID-19 pandemic has resulted in a significant increase in cyber-attacks, with a 600% rise reported in Purplesec’s 2021 Cyber Security Statistics report. Among the types of attacks that have increased since the pandemic are data leaks, phishing emails, and account takeovers, among others. As technology continues to evolve, cyber-attacks are becoming increasingly creative and diverse, posing a significant threat to the outsourcing industry. In response, it is expected that the industry will place a greater emphasis on cybersecurity beyond 2023, with many BPO companies adopting a multi-level security approach to mitigate risks and protect their data. The IT industry is also likely to experience a sense of urgency in providing companies with the necessary resources to meet the growing demands for cybersecurity.
The Future of Attracting and Retaining Top Talent in Outsourcing
The global workforce market has been shaken by “The Great Resignation” movement, which saw a record-breaking 4.5 million employees willingly leave their jobs in November 2021, according to the Bureau of Labor Statistics. This trend can be attributed to the pandemic, which prompted workers across various industries to re-evaluate their priorities. While some countries may return to a pre-pandemic way of life, the effects of this movement are expected to linger.
In this context, the outsourcing industry may face challenges in attracting and retaining top talent, despite providing companies with access to elite workers from around the world. Workers today have discovered they are spoilt for choice, with many organizations offering flexible or remote work options to meet the demands of prospective employees. As a result, businesses looking to outsource will face stiff competition from both local and global firms, making it vital for the outsourcing industry to develop strategies to attract and retain top talent.
The Demand for Cloud-based Technology
A study conducted by Nemertes Research revealed that even before the pandemic, more than half (59%) of call centres worldwide allowed some of their staff to work from home. However, when lockdowns were imposed, this figure rose to 74.1%, and even after the restrictions were lifted, 70.7% of contact centres continued to allow remote work in some capacity. According to a survey by FlexJobs, a significant percentage (58%) of employees now want to work remotely at all times, and only 39% prefer a hybrid work setup. This suggests that outsourced contact centre employees will likely seek jobs that offer flexible work conditions. As a result, companies providing the manpower will need to make necessary adjustments to meet the demands of their employees in the future.
The shift towards remote work in BPO call centres requires technology to support it. Cloud-based customer experience solutions are expected to be widely adopted, with 57% of companies already migrating their customer relationship management functions to the cloud. This has led to the predicted growth of the global cloud market to $390.33 billion by 2028.
The Growing Trend of Remote Work
By the end of 2023, BPO providers like Alorica will have gained over two years of experience in implementing remote work. Alorica, for instance, equipped 100% of its employees worldwide with tools for working remotely during the pandemic. This enabled the company to continue serving its Fortune 500 clients like AT&T and Verizon without any service interruptions. With millions of people preferring some form of remote work, companies offering WFH opportunities will likely attract top talent in the future. However, some companies have been resistant to fully embracing remote work, despite its popularity. Nonetheless, flexible work arrangements will likely continue to shape the outsourcing industry in the future.
Chances of Mergers and Acquisitions are Huge
The acquisition of Sykes by Sitel in 2021 was a significant development in the outsourcing industry. It boosted Sitel’s position as one of the top three customer experience (CX) leaders in the world. This level of success may prompt other top-performing companies in the industry to consider mergers and acquisitions as a means of generating larger annual revenues and filling potential service gaps. Despite the challenges posed by the pandemic, mergers and acquisitions in the BPO and contact centres industry remained resilient throughout 2020, with 27 deals announced or closed. The trend continued in 2021, with specialized outsourced services being heavily sought after by sectors such as finance companies, insurance providers, and law firms.
The Role of Artificial Intelligence and Automation in Job Growth and Its Limitations
The outsourcing industry is expected to heavily incorporate artificial intelligence (AI) in the future, as the technology has the potential to reduce costs, improve efficiency, and provide greater control. AI is expected to have a significant impact on call centres that require accurate and swift transactions. The adoption of automation and AI in contact centres has been ongoing for years, but it was heavily accelerated due to the COVID-19 pandemic and the subsequent lockdowns. Call centres were forced to either work remotely or operate with minimal staff, which resulted in the implementation of automated online interactions and chatbots. While it’s true that some jobs requiring human intelligence may be taken over by machines, complete automation of the outsourcing industry is unlikely. Tasks such as predictable physical work, data processing, and data collection can be automated, while unpredictable physical work, stakeholder interactions, and tasks that require expertise are less likely to be fully automated.
The Globalization of Outsourcing: Companies Will Outsource Across Borders
The outsourcing industry is set to expand globally due to various factors, such as the intense competition for top talent, technological advancements, and the rise of remote work. Although the Philippines and India are traditionally the primary outsourcing destinations, the industry is now exploring other locations. For instance, South African politicians and industry leaders have collaborated to boost business process outsourcing in the region. Moreover, to address the workforce shortage, countries like Colombia, Bulgaria, Poland, and Romania will tap into global talent migrations.
Takeaway
In conclusion, the outsourcing industry has come a long way from its early days of outsourcing non-core tasks to other countries. Thanks to technological advancements, customer support service companies are now capable of handling more complex business processes. As a result, companies in the industry need to invest in the right tools for remote work and consider flexible work arrangements to attract top talent. It’s clear that the outsourcing industry is evolving rapidly, and those who can adapt to the changing landscape will be the ones who succeed in the long run.
