The wage cost advantage of offshore locations for office services is set to last for another 20 years, says the latest annual survey by global management consulting firm A.T. Kearney. Even though wages in offshore locations for services, such as IT, business processes and call centers, have started to rise, they will remain cheaper for the foreseeable future under the most aggressive projections of wage inflation and currency appreciation in developing countries.
But for Team Philippines, which slipped to eighth in the rankings of 50 countries as BPO locations, there's already a bright, neon-colored warning.
The findings also send a message to policy-makers in both developed and developing countries: The key to maintaining and enhancing long-term competitiveness lies in skills development, infrastructure investment and the regulatory environment, not in attempts to control wages. Virtually every country in the Index, even those that fell in the rankings, improved their absolute score in the last year — confirming that competition is intensifying, and simply maintaining current performance levels is no longer sufficient to attract and retain the world's fast-growing remote services business.
The theme remains the same: it's still early days for the BPO industry in the Philippines. Yet while the team has yet to peak, it's prudent to introduce some paranoia about competition. Whether BPO remains an engine of growth for the economy, or putters out in five years' time as other locations step up their game, hinges on the decisions being made today as we go from the amateur ranks to the pro leagues.
Dowload the study here.
