Outsourcing industry recovery could be starting, survey indicates
OPERATIONS of outsourcing companies have started to stabilize as companies bounce back from the lockdown-induced slump of 2020, advisory firm Outsource Accelerator (OA) said in a report.
The company, in a survey of 25 firms representing almost 40,000 employees, found that the shift to remote work caused a “huge operational challenge” for the respondents, which lost 20-30% of revenue or clients during the strictest phase of the lockdown last year.
“After three months, operations stabilized and clients’ businesses stabilized,” OA said, with respondents reporting that they have received new inquiries.
Around 84% of the respondents saw revenue growth in the 12 months to February, while 8% reported flat revenue and another 8% experienced declines.
In terms of profits, 72% reported growth, 20% had flat profits while 8% contracted.
“Some old clients have left, or have been questioning the pricing model or costs, but overall these have been outweighed by new growth and new revenue,” OA said, noting that the survey does not represent a comprehensive picture of the industry.
Meanwhile, 76% of respondents grew their headcount, while 16% retained the same number of employees and 8% posted declines. The 25 firms created 9,000 jobs over the 12-month period, growing their headcount 30%.
While 73% of firms have high expectations for growth in the next 12 months, 92% said their expectations are high over the next five years.
The outsourcing industry association in November reduced its 2022 employment compound annual growth rate projection to 2.7-5%, which translates to 1.37-1.43 million full-time employees, lower than the previous goal of 3-7%.
The Information Technology and Business Process Association of the Philippines (IBPAP) also cut its revenue projection to a 3.2-5.5% compound annual growth rate to between $27.88 billion and $29.09 billion for 2022, compared to the already lowered 3.5-7.5% set in 2019.
Overall industry revenue was flat in 2020, IBPAP Chairman Manolito T. Tayag said. — Jenina P. Ibañez