October 13, 2014
India has seen a recent exodus of Business Process Outsourcing (BPO) from its shores, and most of these businesses have made the Philippines their new home. A new report by the Associated Chambers of Commerce and Industry of India (Assocham) has shown that India is likely to lose $30 billion in foreign exchange revenue because of this competition from the Philippines, according to Ted Toress of Philstar.com.
This new finding has brought up the question of why companies are choosing the Philippines over India. The key difference has been in the employability levels of graduates. In the Philippines, more than 30 percent of graduates are employable while in India, the number is a paltry ten percent. As a result of this difference, companies that had operations in India had to spend more time and money on training employees, which in turn increased their costs.
Another difference is that people in the have better American accents and are culturally more acclimatized to the U.S., when compared to BPO workers in India. This difference can go a long way in putting American consumers at ease. Due to these factors, Manila has become the second most preferred destination for outsourcing after Bangalore. Other cities in the Philippines are also making it onto the top ten list, which was earlier dominated by Indian cities.
But all is not lost for India, as it has been able to claw back some businesses from the Philippines. A high churn rate and the risks that come from doing business with a small country have been cited as for some companies to move their operations back to India. Furthermore, companies are looking beyond voice calls and are seeking to integrate other tech components as well. These factors could give India an edge over the Philippines in the future.
In short, the Philippines have taken a lot business from India, but it has to constantly innovate to keep India at bay.
