The Growing Global Business Process Outsourcing (BPO) Industry

The Business Process Outsourcing (BPO) industry is a large and growing industry worldwide, valued at USD 251.1 billion in 2021. It is expected almost to double and reach USD 492.45 billion by 2027, growing at a compound annual growth rate (CAGR) of 10.1% from 2021 to 2028, according to the latest report by  GlobeNewswire.

India's Reign in the BPO Industry: A Closer Look

India is amongst the most prominent players in the global BPO industry. According to a NASSCOM   report, the Indian BPO industry was valued at USD 177 billion in 2019, accounting for 6.25% of India's GDP. 

"India currently accounts for nearly 60% of the global offshoring market for BPO services. In terms of jobs, the BPO sector employs nearly 4.14 million people in India and this number is only expected to grow in the years ahead", says Ralf Ellspermann, CEO of PITON-Global, an award-winning BPO provider.

Talent Outlook for BPO Sector

India has a population of 1.3 billion people, with nearly 65% of the population below the age of 35. India has been a preferred destination for BPOs as the young population of the country is imperative for the future growth of the BPO sector. This young population is essential for the future growth of BPO in India as companies look to hire individuals with the latest skills and technology.

India has an enormous volume of engineers and other technical professionals, which gives the upper hand to be the first choice destination when outsourcing a business process overseas. Another critical factor is the costs for BPO services in India are significantly lower than those in developed countries. Companies that outsource to India do cost savings as high as 60%, which makes India a favourable and affordable place for outsourcing.

Key Services provided by Indian BPO companies

Indian BPO companies offer varied services, such as customer support, technical support, telemarketing, insurance processing, data analytics and processing, financial and accounting services, and online research. 

1. Call-Center & Customer support outsourcing: Often known as Front Office Outsourcing, these 24/7 inbound and outbound call center services address customer queries and concerns through phone, email, and live chat.

2. IT Services and ITES Outsourcing: Installation, product support, running support, troubleshooting, usage support, and problem resolution for computer software, hardware, peripherals, and internet infrastructure. Technical problem resolution, office productivity tools support, answering product usage queries, and performing remote diagnostics.

3. Marketing and Sales Outsourcing: Engaging with potential customers, generating interest in their products and services, and leveraging opportunities to up-sell and cross-sell to existing customers, businesses can boost their online sales and drive growth. Digital Marketing services to drive sales and grow your business worldwide.

4. Finance and accounting outsourcing (FAO): F&A services for businesses, augmenting areas such as accounts payable, accounts receivable, tax preparation, accounts and bookkeeping, payroll, and forms processing.

5. Back Office Outsourcing (BOO): These BPO services enable internal operations to run smoothly. These include; payment processing (specifically check, credit, and debit cards), transportation admin, logistics and dispatching, collection, receivables, procurement (both direct and indirect), and warehouse management.

6. Human Resource Outsourcing (HRO): Third party administers essential HR services, employee training and development, policy creation and workplace safety, recruitment and onboarding, compliance, and risk management on behalf of another business, allowing it to focus more attention on growth-related objectives. 

Future Demand in IT/Telecom, BFSI, and Customer Support Services

• The IT sector in India adds massive value to the global outsourcing partners' market share. Statista claims that in the fiscal year 2022, the Indian IT industry's revenue was primarily generated by the IT services sector, which accounted for 51 percent. The business process management sector followed closely, contributing 19 percent of the industry's revenue.
• The adoption of cloud services and the rise in cloud migrations have transformed IT outsourcing from a mere cost-cutting strategy to a more complex phenomenon driven by organizational aspirations for business expansion, improved customer experience, and competitive disruption.
• The Banking, Financial Services, and Insurance (BFSI) sector in India has a significant demand for outsourcing, as reported by Dublin Businesswire. Financial organizations increasingly opt to outsource their processes and services to third-party vendors. This includes a range of functions, such as mailing campaigns and payment processing. It is becoming increasingly crucial for banks to have a robust in-house IT department or a trusted external partner to thrive in the industry and attract customers.
• The Indian workforce's colossal business process outsourcing relies heavily on call centers and customer support services as its backbone. The future of BPO in India offers a distinct combination of technological advancements and communication with remote internet penetration, which motivated companies to outsource their business processes to India amidst the pandemic. 

Key Challenges to address talent demands for BPO Sector

As the demand for the BPO sector is going to increase exponentially, so does planning and ​​finding the right kind of talent which should align with your organizational needs should be of utmost importance. Rapidly growing start-ups and BPO sectors want to scale fast, reduce ramp-up time and hire measurably better teams. Scaling up teams in the current market scenario is a universal problem across all BPO companies, and below are the reasons where the actual problem lies :

Everyone is fighting for the same talent pool

• Most companies use the same predictors to filter and hire people – resumes, pedigree, grades, past organizations, and self-reported behaviors.
• The same hiring processes/algorithms throw the same people as top candidates across the industry, which results in low offer acceptance, and missing out on other talented high potential talent.

Functional skills aren’t enough to hire high performers 

• Skills to succeed in the BPO profession require more than being just technically sound. A highly skilled technical person may not be a suitable fit if they cannot collaborate and communicate ideas within the team.
• The World Economic Forum publishes a report on the skills in the most significant demand and need. The top skills there were: Complex problem-solving, Critical Thinking, Active Learning, Service Orientation, Cognitive flexibility, Emotional intelligence, Patience, Decision-making, and Creativity.
• Currently, there is no way to objectively measure intangible behavioral skills necessary to succeed in BPO roles, but they are hard to identify in interviews, such as cognitive ability, behavioral and communication skills.
• Research conducted by Harvard University, the Carnegie Foundation, and Stanford Research Center has concluded that only 15% of job success comes from technical skills and knowledge (hard skills).                 

Outdated Recruitment Practices miss out on top talent

• Current hiring processes might not be foolproof. That's why hiring goes wrong so many times. 46% of people are bad hires within 18 months of hire. 78% of people extrapolate truths about themselves.
• It is quite notable that the employee attrition rate in the BPO/BPM industry is relatively high, according to Statista. Companies cannot convincingly retain their employees for long and suffer huge losses every time they have to train new employees. The cost of hiring a new employee and training that person for the job is again, time-consuming and expensive.
• There is a lot of second-guessing and a lack of coherent metrics across various panelists.
• Biased hiring through conventional resume screening lands up hiring a not-so-motivated employee, thereby becoming a bad cultural fit.

Revamping BPO Hiring Strategies: Assessing Beyond Traditional Skills and Experience

The hiring process for BPO companies needs new strategies to assess candidates' suitability for the job better. BPO companies should prioritize assessing candidates' computer literacy skills, cultural fit, cognition and multitasking abilities, live chat and speech simulation abilities, and situational judgment skills. These assessments can help companies identify candidates with the right combination of technical and soft skills needed to succeed in a BPO role and those who are a good fit for the company culture. Using various assessment methods, BPO companies can improve the quality of their hires and reduce turnover rates. Read more from below article to find out the latest assessment strategies for BPO/Contact Center Hiring.

Staying Ahead of the Game: The Latest Assessment Techniques for Contact Center/BPO Hiring