Businesses cut costs and boost efficiency by outsourcing tasks to specialists.
This frees up their in-house staff to focus on core functions.
Outsourcing is a global trend, with companies worldwide sending work to countries like the Philippines, which has a large pool of qualified workers and strong English proficiency.
What is the state of outsourcing and hiring overseas talent in 2024? Let’s check out the following 25 statistics.
- The Philippine BPO industry contributes nearly $30 billion to the economy each year.
- It is estimated that 1.3 million Filipinos were employed in over 1000 BPO companies in 2019, and that figure is showing 8-10% growth every year.
- The Philippines holds 10-15% of the global BPO market.
- There are an estimated 1.5 million Filipino freelance workers on digital platforms.
- The Philippines ranked 6th among the fastest-growing markets for freelancers in 2019, with a 35% growth from the previous year.
- 92% of G2000 companies use IT outsourcing.
- 9% of the Philippines' GDP comes from business process outsourcing.
- Companies that outsource to the Philippines can cut labor costs by 70%.
- The average salary for Filipino software developers is just $7,174, around 10% of the average American software developer salary.
- Over one million new employees join the services outsourcing industry in China each year.
- The BPO market in Japan is expected to reach $38 billion by 2025.
- 7 in 10 British B2B companies outsource key business operations.
- The annual outflow of overseas Filipino workers (OFWs) exceeded 2.15 million in 2019.
- Remittances from OFWs and other diaspora Filipino populations represent close to 10% of the country's GDP.
- The IT-BPM sector provides employment to 0.6 to 1.2 million workers per year with an annual growth rate over 5%.
- The Philippines has a 97% literacy rate, helping attract companies looking to move business functions offshore.
- The Philippines' low minimum wage, with Filipino graduates earning around $300 per month, is another draw for outsourcing companies.
- A recent study estimated that around one-third of college graduates in the Philippines were "overeducated" or overqualified for their positions.
- The elasticity of wage employment to GDP growth is highest in the services sector, indicating its importance for job creation.
- The employment share of high-skilled occupations increased from 16% in 2001 to 22% in 2019, reflecting the growing demand for skilled labor.
- The share of vulnerable employment (own-account and unpaid family workers) declined from 43% in 2008 to 36% in 2019, a positive trend.
- Regional disparities in labor market indicators like unemployment, underemployment, and poverty incidence remain significant in the Philippines.
- Employment growth in the manufacturing sector has been driven by medium-high and high-technology industries.
- The Philippines has implemented laws to minimize bureaucratic red tape and improve efficiency in business processes.
- The country's ranking in the World Bank's Ease of Doing Business index improved from 124th in 2018 to 95th in 2020, indicating progress in the business environment.
Sources: The World Bank, Exploding topics, Asian Development Bank
