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The real value of BPO market in US

February 26, 2019

By: Uriel Fernandez | Director of Operations

Today, outsourcing has become a more relevant topic, thanks to the growth of the global industry and the constant search to optimize costs and processes within companies. Only 68% of the consumer products industry outsources its part of its labor force as a measure to reduce costs for space and salaries, in addition to having a better perspective of its market, and thereby define more innovative strategies.

A study conducted in 2018 revealed that process outsourcing increased its total contract value worldwide to $ 23.6 billion, of which $ 126 million correspond to the industrial market in the United States. Among the companies that presented greater demand for these services are those related to logistics services, administration, technology, and communications, Human Resources, as well as companies in the health sector.

Among the different regions of the world, North America is the largest market for the outsourcing of business processes and it is possible that it will remain present for many years to come. A report by Market Research Future estimates that the world BPO market will be valued at $ 52 million by the end of 2023, taking the United States as the main investor in this type of services, in addition to its great rival in this Type of services: India.

But what makes companies in the United States continue to hire this type of service? One of the first reasons that lead companies in the country to contract the services of a BPO is the cost of energy implemented for the development of products, as well as other aspects such as legislative/regulatory pressures and the increase in interest rates. A PWC study mentions that among the surveyed companies there is a 65% that considers that energy prices imply a potential barrier to commercial growth.

On the other hand, companies are redefining the value of BPOs, because each decision must imply a result that does not affect their investment and on the contrary, it should help to consider what type of services can be outsourced and which can be managed internally. In addition to savings, BPO services offer value to organizations in the form of trained employees, industrial-level infrastructure, 24/7 accessibility and the guarantee of continuing in business.

BPOs also help companies in the United States to be much more competitive in the foreign market, a situation that has given much to talk about in recent years as there are opinions that outsourcing companies have caused a significant loss of jobs. However, the reality is that the subcontracting of US companies has allowed both the foreign and local economies to obtain greater benefits, as foreign economies are driven by the demand for products by consumers in the United States and the country obtains the necessary goods at a lower cost.

Subcontracting has allowed the United States to obtain goods at a low cost because the materials do not have to be imported into the country and the employment abroad is cheaper, which implies greater profits for the country and the companies that use this type of services, achieving a labor cost of $ 27 dollars per hour, much larger than in other countries in the world.

Then, knowing the cost of investment in BPO companies in the country, in addition to the cost of labor and other factors such as the expansion of business to other parts of the world, we can conclude that although there is a significant number of unemployed, this it is not necessarily due to companies subcontracting, but it may be due to the lack of vision of many businesses that have been maintained for years using the same marketing methods or perhaps due to the lack of training in their employees, a detail that BPOs have been able to decrease with the same elements within a company, in addition to maintaining them in force and improving their quality in services towards final consumers through the implementation of technological tools and people who devote their attention to the back office.

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