The business process outsourcing (BPO) industry remains a vital part of the Philippine economy. However, challenges posed by automation developers, other countries that provide BPO services, and the realities of the post-pandemic world are causing several shifts in the Philippine BPO industry that are sure to affect this sector in the years to come. Below are just some of the changes that are already happening within this important industry.
1.) A Reimagining of Industrial Real Estate
Thanks to the challenges mentioned above, current industrial real estate developments now incorporate many lifestyle and sustainability features to attract and retain business investments. A growing number of these developments are going beyond their traditional role as places to host offices and enjoy tax breaks. They are now being reimagined and redesigned to encourage the growth of exclusive communities.
Most notably, the recent pandemic has forced policymakers to reconsider industrial zones, particularly their design as well as the policies informing their use. With more BPO professionals now working from home, developers and policymakers have to think of new ways to encourage occupancy and maximize the utility of their real estate investments.
This may all lead to some very exciting changes in the design and purpose of industrial real estate. Rather than simply being a place to locate businesses, such areas may soon carry the added prestige and convenience of being desirable communities to live in. They may even one day serve as a template for other planned communities throughout the country.
2.) Wider Adoption of Automation Technologies
Since the 2000s, it has been predicted that advancements in machine learning and artificial intelligence would soon enable businesses to replace traditional BPO providers.
However, as good as current automation technology is, it is unlikely to completely replace human specialists in the near term. The technology is still too expensive for any but the largest businesses to use effectively and still has many kinks to iron out.
On the other hand, automation is already good enough to reduce the dependence on BPOs. The technology is now being used to handle basic customer service queries, effectively reducing the need for human agents to handle rudimentary questions. This has led to a lessened demand for the simplest customer service jobs, particularly among the largest users of BPO services.
3.) Higher Value Services
The dual threats of wider automation adoption and competition from countries that provide lower-cost BPO services have forced Philippine BPO providers to reassess their positions. However, lower-cost countries and automation technology developers still struggle with delivering solutions for complex or higher value services for so-called tier two and tier three customers.
This presents Philippine-based BPO service providers with a golden opportunity. The Philippine BPO sector is already a leader when it comes to delivering high-value services because of the local workforce’s many unique qualities. Filipino values emphasize patience, resourcefulness, honesty, and courtesy. Most Filipinos are also broadly familiar with Western culture and understand how to adjust to the expectations of that framework. As a result, BPO companies in the country have the best possible workforce in the world to take advantage of this new opportunity.
As the world readjusts to the wider role of AI and machine learning, Filipino BPO workers are likely to take on more complex and less repetitive customer service and technical support jobs. BPO providers are likely going to shift to so-called high-value “backroom” services such as marketing, web development, human resources, and other areas that AI and cheaper labor cannot yet compete with. Interestingly, a focus on complex services may empower the local BPO industry to become a leader in business process automation.
4.) Employee Upskilling
To tap into this higher value BPO market, it’s no longer enough for service providers to draw from a quality labor pool. If they want to deliver higher-value services and remain competitive, they will have to consider making very serious commitments to upskilling their employees.
The capacity of BPO providers to deliver more complex services will hinge on their ability to train and develop their workforces. To retain their investments, BPO providers may have to consider improving the incentives for employees so that they are more willing to stay.
The need to upskill is not going to be confined to the Philippines by any means. Labor forces throughout the world are also facing challenges from automation. This also opens up market opportunities for education-related outsourcing, another area the country is poised to take advantage of.
5.) More Flexible Working Arrangements
Unless the world experiences another event similar to the COVID-19 pandemic, moving forward people are unlikely to see work-from-home arrangements dominate the way they did in 2020 and 2021. However, more flexible hybrid work setups where employees work from home on most days like likely to become a normal part of local BPO practices.
Hybrid work setups may not be suitable for all BPO employees, particularly those working with sensitive data. However, for everyone else, these may eventually become the dominant mode of work, particularly in areas where quality digital infrastructure is present.
Evolving to Meet New Challenges
The local BPO industry is not going away any time soon. However, to maintain its global leadership, it has to stay on top of these trends, challenges, and opportunities. Thanks to the adaptability of the Filipino workforce and measured support from key policymakers, Philippine BPOs may stay ahead of the pack for some years to come.