Where Does the BPO Industry Go From Here?

For decades, companies have turned to Business Process Outsourcing (BPOs) as a way to reduce costs and run more efficiently. This is especially true in the call center space. In fact, the term “BPO” is often used interchangeably with “outsourced call center”. A recent report indicates the demand for BPO services will grow annually by 6% until 2022.

One of the things that make the BPO industry so fascinating is its sensitivity to a broad range of economic and policy trends. Something that might seem irrelevant to call centers can have, as a second – or third – order effect, a real impact on BPOs. Here are 3 issues we’re watching, as they relate to offshoring: one that makes the case for offshoring stronger (“for”), one that makes the case weaker (“against”) and one that is, at least for now, “neutral”.

For: Domestic Labour Scarcity

The unemployment rate in the US continues to decrease, recently hitting a 10-year low. Naturally, this makes hiring harder and increases the attractiveness of offshore options.

Analyst Peter Ryan says “current attrition levels in the U.S. are catastrophic in the call center space, so being able to find the volume of labor required in the event of a wide scale reshoring trend could be very difficult.” (The term “reshoring” refers to switching back from an offshore service to local staff.)

Within the bulk employment numbers, we can also see a growing number of call center jobs. The Bureau of Labor Statistics reports that people working as “Customer Service Representatives” have steadily increased over the last 5 years. The number of people holding that title is up 17% over the past 5 years and 27% over the last 15.

This trend contradicts a common talking point in the industry that the “voice channel” is shrinking in response to other channels like email, chat, and social media becoming more prevalent. More on that here.

Against: Multi-Channel

Even if the voice channel isn’t shrinking, other channels are having a large impact on the way companies communicate with their customers. Statistics on chat, messaging, social media and email all show growth. Think of it this way: The whole “pie” of customer communication is growing.

In order to do well with these new channels, companies are looking for their agents to have a broader skill set. That works to dissuade companies from outsourcing.

Neutral: Trump’s Protectionism

The election of Donald Trump has caused a lot of concern among both BPOs and the companies that use them. During the campaign he railed against outsourcing and promised severe penalties to companies “shipping jobs” overseas.

But the post-election reality seems to be that this rhetoric will not translate into action that will directly affect outsourced call centers. The policy proposal that seems closest to reality is a tariff on parts and goods manufactured overseas and brought back to the U.S. That’s unlikely to be applied to a “service” like phone support, so the industry can breathe a bit easier. (For now.)

Learn More

If your company is considering a contract with a BPO, here are two blog posts worth reading:

4 Commitments Every Great Call Center BPO Must Make 

https://fonolo.com/blog/2017/02/4-commitments-every-great-call-center-bpo-must-make/

Is Your BPO Call Center Making these 4 Mistakes?

https://fonolo.com/blog/2017/04/is-your-bpo-call-center-making-these-4-mistakes/

One of the best ways to stay informed about the trends is from the BPOs themselves. You can find a list of the top BPOs to follow on twitter here:  https://fonolo.com/blog/2017/05/top-call-center-bpos-to-follow-on-twitter/