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BPAP Survey Results on BPO for 2009

(Manila, Philippines, December 3, 2008) — Providers of value-driven non-voice business process outsourcing (BPO) services of all sizes and in all sectors expect workforces and revenues to expand significantly in 2009 according to a recent survey of non-voice BPO service providers.

A summary of results provided by the Business Processing Association of the Philippine (BPA/P) and Outsource2Philippines (O2P) showed that 96% of respondents representing organizations that provide non-voice BPO services believe that 2009 prospects for their organizations are good, excellent, or outstanding. More than half of the respondents, 51%, said prospects are excellent. No respondents indicated the 2009 prospects were poor, but four percent said prospects were only fair.

However, respondents acknowledged that impediments to growth are present. Chief among those threats is finding qualified personnel. Sixty-three percent of respondents representing non-voice BPOs indicated that the availability of qualified workers is the biggest impediment to growth, and 88% said recruiting qualified personnel is moderately difficult (51%), difficult (26%), or very difficult (11%).

Other impediments to growth include the impact of the global financial crisis in the view of of 44% of non-voice BPO respondents, and rising competition (43%).

“Although the outlook is overwhelmingly positive for the Philippines’ non-voice BPO sectors, the results show that we must be relentless in developing human resources to meet global demand,” said BPA/P CEO Oscar Sañez. “Fortunately, we have multiple initiatives in play to address this issue, including close partnerships with major educational institutions, government-funded training for industry near hires, and a vibrant private-sector that is responding aggressively to the need to quickly develop qualified personnel for the BPO industry by providing innovative training opportunities.”

Despite impediments, 65% of respondents representing non-voice BPO service providers expect to expand their workforces from 16% to over 200%, and 92% of these respondents said their workforces will expand six percent or more.

The sense of optimism is apparent regardless of size and sector with most organizations of all sizes and in all sectors providing non-voice services expect to expand their workforces significantly. This was true even among the largest non-voice services providers in the Philippines. All respondents representing organizations with 10,000 or more employees expect to expand their workforces between 11% and 50%.

Only eight percent of respondents expect to expand their workforces five percent or less. The 23% of respondents representing non-voice BPO services providers projecting modest expansion of their workforces of between zero and 10 percent presently have workforces of 500 or less.

Optimism is also apparent in revenue projections. Ninety-eight percent of respondents representing organizations that provide non-voice BPO services expect revenues to increase in 2009, and 80% expect revenues to increase between 11% and 50%. Five percent of non-voice BPO respondents said revenues will increase by more than 75% to 300%. Respondents projecting the highest growth in revenues represent organizations with 2,500 employees or less at present. Representatives of non-voice BPOs of all sizes and sectors projected significant revenue growth in 2009.

“Given the difficult global economic outlook at present, the fact that Philippine non-voice BPO sectors are full of optimism is hugely encouraging,” said O2P CEO Frank Holz. “Although industry players are concerned about competition, it’s clear that new players are going to act to leverage the opportunity the industry is generating. I don’t expect to entrants to have a significant impact on established players, however, which have already developed strong client relationships.”

The survey, which was managed by TeamAsia, also showed that most Philippine non-voice BPOs provide at least moderately value-added services. Sixty-four percent of non-voice BPO respondents indicated the services they provide are high or very high in value, and another 26% said the non-voice services their firms provide are moderate in value. Only 10% of non-voice BPO respondents said their services provide only low or very low value.

Forty-six percent of respondents provide back office services and 35% provide software services. Twenty-four percent provide software development services. Other services include: 1) tech support, 31%; 2) animation and graphics, 18%; 3) customer care, 17%; 4) medical transcription, 15%; 5) product support, 14%; 6) financial KPO services, 12%;  7) legal transcription,12%; 8) e-learning, 9%; 9) engineering services, 8%; and 10) legal KPO services, six percent. Twenty-four percent said they provide “other” services.

Invitations to participate in the online survey were sent to 583 BPA/P members and members of affiliated associations, and 190 respondents completed the survey, providing a 33% response rate. The survey was administered in November by TeamAsia.