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 News
Survey: Most BPOs see neutral, positive impact of
global financial crisis
But slightly more BPOs project decrease in demand than increase
Summary
Outsource2Philippines (O2P), in partnership with the Business
Processing Association of the Philippines (BPA/P), conducted an
online survey administered by TeamAsia from October 21-25 to assess
the possible impact of the global financial crisis in the perception
of the business process outsourcing (BPO) industry. The survey
was sent to 499 members of BPA/P and its affiliated associations.
A total of 113 responses were received, providing a 22.6% response
rate. Sixty-two percent of respondents are providers of BPO services,
22% are suppliers to the industry, and 16% indicated “other”.
Small, medium, and large firms were represented. The results showed:
- Seventy percent of respondents indicated that the global
financial crisis will have a neutral or positive impact on
their Philippine operations, with 38% indicating that the
impact will be positive. Almost one third, 32% of respondents,
said the global financial crisis will have a negative effect
on their Philippine operations.
- Large firms employing from 5,001 to more than 15,000 employees
indicated that the global financial crisis will have a neutral
or positive impact on their Philippine operations. Negative
sentiment with respect to the impact of the global financial
crisis was apparent among respondents representing small firms
employing less than 500 employees. Almost 40% of respondents
representing firms employing between one and 100 employees
believe the global financial crisis will have a negative impact
on their Philippine operations.
Approximately 30% of respondents employing between 101 and
500 employees and 1,001 and 2,500 employees indicated that
the global financial crisis would have a negative impact on
their Philippine operations. However, 43% of firms employing
between 1,001 and 2,500 employees indicated that the global
financial crisis will have a positive impact on their Philippine
operations, and 66.7% of respondents representing firms employing
2,501-5,000 employees said the global financial crisis will
have a positive impact on their Philippine operations.
- Forty-two percent of respondents said that their companies
will expand their workforces between six and 25% in the next
12 months, 16% will expand between 26% and 50%, and 11% will
expand between 51 and 100%. Seven percent of respondents said
they will expand their workforces between 101 and 200%. Firms
currently employing less than 1,000 employees expected to
expand in a range of rates, from relatively modest to more
than double, while firms employing between 1,001 and 10,000
expected to grow mostly modestly, but in some cases up to
50%. One firm employing between 10,000 and 15,000 employees
expects to grow between 51% and 75%, and two firms employing
more than 15,000 employees expect to expand at a rate between
16% and 25%
- Software developers of original IP (intellectual property)
were the most pessimistic among respondents. Almost 54% said
the global financial crisis will have a negative impact on
their Philippine operations while about eight percent said
the impact would be positive. About 39% said the impact of
the global financial crisis on their operations would be neutral.
Providers of software services were more optimistic, with
33.3% indicating that the global financial crisis will have
a positive effect on their Philippine operations, but almost
39% said the global financial crisis will have a negative
impact. Close to 28% said impact of the crisis will be neutral.
Respondents engaged in engineering services and legal transcription
were the most optimistic. Seventy-five percent of respondents
engaged in engineering services said the global financial
crisis would have a positive effect on their Philippine operations,
while 25% said the global financial crisis would have a neutral
impact on their operations. None of the respondents engaged
in engineering services said the global financial crisis would
have a negative impact on their Philippine operations.
Almost 63% of respondents engaged in legal transcription expect
the global financial crisis to have a positive impact on their
Philippine operations, while 12.5% said it would have a neutral
impact. Twenty-five percent of respondents engaged in legal
transcription expect the global financial crisis to have a
negative impact on their Philippine operations.
Among contact centers, 53.8% of contact centers primarily
providing inbound services said the global financial crisis
will have a positive impact on their Philippine operations,
and 30% said the impact would be neutral. Only 15.4% of contact
centers primarily engaged in inbound services said the global
financial crisis will have a negative impact on their Philippine
operations. While 50% of contact centers primarily engaged
in outbound services said the global financial crisis will
have a positive effect on their Philippine operations, 50%
also said it will have a negative impact.
Fifty percent of third-party BPOs said the global financial
crisis will have a positive impact on their Philippine operations,
while 29.2% indicated the impact would be neutral. About 21%
said the impact of the global financial crisis on their Philippine
operations will be negative. Almost 77% of inhouse BPOs said
the impact of the global financial crisis will have a positive
or neutral impact on their operations in the Philippines,
while 23.5% said the effect would be negative.
- Sixty-eight percent of respondents indicated that the global
financial crisis will have no, minor, or moderate impact on
their operations in the Philippines, while 28% indicated that
the global financial crisis will have significant impact of
their operations in the Philippines. Only four percent indicated
that the global financial crisis will have very significant
impact on their operations in the Philippines.
- Slightly more respondents (44%) believe that the global
financial crisis will result in a decrease in demand for their
services than an increase in demand (41%), and 44% of respondents
believe the global financial crisis will cause expansion plans
to be cancelled or postponed. Thirty-one percent of respondents
believe access to funding will be constricted as a result
of the global financial crisis and 27% indicated that the
global financial crisis may result in difficult payment terms.
- Eighty-eight percent of respondents said their firms are
taking steps to respond to opportunities and
threats arising from the global financial crisis.
- Thirty-eight percent of respondents said their firms are
decreasing capital spending as a result of the global financial
crisis; 28% said they are postponing expansion plans, while
24% said their firms are accelerating expansion plans, but
only eight percent indicated that their firms are increasing
capital spending. Twenty percent indicated that they are intensifying
recruitment, while 13% are decreasing recruitment.
- Other steps respondents’ firms are taking in response to
the global financial crisis include intensifying marketing
efforts and exploring new market segments.
News Release
(Manila, Philippines, October 27, 2008) — A survey of executives
of companies in the business process outsourcing (BPO) industry
and suppliers to the industry showed that a significant majority
of industry players believe the global financial crisis will have
a positive or neutral effect on their operations in the Philippines.
However, almost a third of respondents said the crisis will have
a negative impact on their operations and 44% said the crisis
will result in a decrease in demand for their services.
Results indicated that the impact of the global financial crisis
on the Philippine operations of BPO services provides will be
mixed, but mostly positive. A majority of respondents, 79%, representing
a broad spectrum of BPO sectors said the global financial crisis
will have a positive or neutral effect on their Philippine operations.
Forty-one percent of respondents said the global financial crisis
will cause demand for their services to increase, and 38% said
the global financial crisis will have a positive impact on their
operations in the Philippines. Thirty percent said impact on their
Philippine operations will be neutral. “While the global financial
crisis provides both opportunities and challenges for the Philippine
BPO industry, industry players are indicating that overall, the
outlook remains positive, and at least in some sectors, will become
more so,” said Business Processing Association of the Philippines
(BPA/P) CEO Oscar Sañez.
Large firms employing from 5,001 to more than 15,000 indicated
that the global financial crisis will have a neutral or positive
impact on their Philippine operations. Negative sentiment with
respect to the impact of the global financial crisis was apparent
among respondents representing small firms employing less than
500 employees. Almost 40% of respondents representing firms employing
between one and 100 employees believe the global financial crisis
will have a negative impact on their Philippine operations.
Approximately 30% of respondents employing between 101 and 500
employees and 1,001 and 2,500 employees indicated that the global
financial crisis would have a negative impact on their Philippine
operations. However, 43% of firms employing between 1,001 and
2,500 employees indicated that the global financial crisis will
have a positive impact on their Philippine operations, and 66.7%
of respondents representing firms employing 2,501-5,000 employees
likewise said the global financial crisis will have a positive
impact.
Firms of all sizes plan to expand their workforces in the next
12 months. Forty-two percent of respondents said that their companies
will expand their workforces between six and 25% in the next 12
months, 16% will expand between 26% and 50%, and 11% will expand
between 51 and 100%. Seven percent of respondents said they will
expand their workforces between 101 and 200%.
Firms currently employing less than 1,000 employees expected to
expand in a range of rates, from relatively modest to more than
double, while firms employing between 1,001 and 10,000 expected
to grow mostly modestly, but in some cases up to 50%. One firm
employing between 10,000 and 15,000 employees expects to grow
between 51% and 75%, and two firms employing more than 15,000
employees expect to expand at a rate between 16% and 25%.
Results by sector reveal opportunities, challenges
Respondents engaged in engineering services and legal transcription
were the most optimistic. Seventy-five percent of respondents
engaged in engineering services said the global financial crisis
would have a positive effect on their Philippine operations, while
25% said the global financial crisis would have a neutral impact
on their operations. None of the respondents engaged in engineering
services said the global financial crisis would have a negative
impact on their Philippine operations.
Almost 63% of respondents engaged in legal transcription expect
the global financial crisis to have a positive impact on their
Philippine operations, while 12.5% said it would have a neutral
impact. Twenty-five percent of respondents engaged in legal transcription
expect the global financial crisis to have a negative impact on
their Philippine operations.
Software developers of original IP (intellectual property) were
the most pessimistic among respondents. Almost 54% said the global
financial crisis will have a negative impact on their Philippine
operations while about eight percent said the impact would be
positive. Approximately 39% said the impact of the global financial
crisis on their operations would be neutral.
Providers of software services were more optimistic, with 33.3%
indicating that the global financial crisis will have a positive
effect on their Philippine operations, but almost 39% said the
global financial crisis will have a negative impact. Close to
28% said impact of the crisis will be neutral.
Among contact centers, 53.8% of contact centers primarily providing
inbound services said the global financial crisis will have a
positive impact on their Philippine operations, and 30% said the
impact would be neutral. Only 15.4% of contact centers primarily
engaged in inbound services said the global financial crisis will
have a negative impact on their Philippine operations. Sentiment
was mixed among executives of contract centers primarily engaged
in outbound services, with 50% indicating the global financial
crisis will have a positive effect on their Philippine operations
and 50% expecting the crisis to have a negative impact.
Fifty percent of third-party BPOs, which provide a variety of
back office and knowledge process services, said the global financial
crisis will have a positive impact on their Philippine operations,
while 29.2% indicated the impact would be neutral. About 21% said
the impact of the global financial crisis on their Philippine
operations will be negative. Almost 77% of in-house BPOs said
the impact of the global financial crisis will have a positive
or neutral impact on their operations in the Philippines, while
23.5% said the effect would be negative.
“The results of the survey suggest that indeed there is opportunity
in crisis,” said O2P CEO Frank Holz. “The challenge is to identify
those opportunities, quickly determine how to capitalize on them,
and then act aggressively.”
Results for all sectors generally positive, but mixed
Overall, sixty-eight percent of respondents indicated that the
global financial crisis will have no, minor, or moderate impact
on their operations in the Philippines, while 28% indicated that
the global financial crisis will have significant impact on their
operations in the Philippines. Only four percent indicated that
the global financial crisis will have very significant impact
on their operations in the Philippines.
Slightly more respondents (44%) believe that the global financial
crisis will result in a decrease in demand for their services
than an increase in demand (41%), and 44% of respondents believe
the global financial crisis will cause expansion plans to be cancelled
or postponed. Thirty-one percent of respondents believe access
to funding will be constricted as a result of the global financial
crisis and 27% indicated that the global financial crisis may
result in difficult payment terms.
Eighty-eight percent of respondents said their firms are taking
steps to respond to opportunities and threats arising from the
global financial crisis.
Thirty-eight percent of respondents said their firms are decreasing
capital spending as a result of the global financial crisis; 28%
said they are postponing expansion plans, while 24% said their
firms are accelerating expansion plans, but only eight percent
indicated that their firms are increasing capital spending. Twenty
percent indicated that they are intensifying recruitment, while
13% are decreasing recruitment efforts.
Other steps respondents’ firms are taking in response to the global
financial crisis include intensifying marketing efforts and exploring
new market segments.
Conducted by Outsource2Philippines.com (O2P) in cooperation with
BPA/P, 113 respondents representing BPA/P members and members
of affiliated associations participated in the survey. The survey
was distributed to 499 prospective respondents, and had a response
rate of 22.6%. Sixty-two percent of respondents are providers
of BPO services, 22% are suppliers to the industry, and 16% indicated
“other”. The online survey was administered by TeamAsia.
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