The BPO Industry’s Impact on the Global Financial Crisis

The BPO industry, like other business sectors, has been impacted by the ongoing global economic crisis. For example, in the way the BPO industry has been influenced, there has been a dual movement. On the one hand, many corporations in the West (the United States and Europe) have cut their expenditures and drastically decreased their outsourcing risk. On the other hand, there has been an increase in the rate at which certain Western corporations have expanded outsourcing. Despite the fact that these two imperatives appear to be contradictory and incompatible, there are grounds for such conduct.


Many firms who have suffered as a result of the current global economic crisis and have not received government help have elected to reduce outsourcing expenditures, whilst those that have been bailed out have decided to boost outsourcing as a cost-cutting strategy.

The argument is that corporations in the West who have decided to lay off staff at home rather than send employment overseas have seen an increase in revenue for the BPO industry. Those corporations that have decided to keep their home staff have accelerated outsourcing.




Apart from that, the impact of domestic policies on the outsourcing phenomena has been weighing heavily on the minds of CEO’s in the West. We’ll go through this in more detail in following articles. Suffice it to say that during recessions, there is always a lot of fuss over outsourcing in the home nations, which has led to more caution on the part of Western corporations. Furthermore, corporations in the West have a moral duty to keep their local workers when times are rough, and as a result, many companies have chosen not to move additional jobs offshore.


Many organizations, however, have recognized the benefits of outsourcing more during recessionary times because of the massive cost reductions that outsourcing provides. As a result, they have raised the rate at which they outsource in order to boost their bottom lines. This is a succinct explanation of the complicated subject of outsourcing, with a focus on the impact of the recession on outsourcing and the BPO business.


What’s made things even more confusing is the fact that Pakistani BPO firms have cut expenses dramatically in the previous two years in order to improve the value proposition they provide to their Western clients. As a result, it has become more appealing to export employment than than maintain them in the home nations. Apart from these causes, the fact that Asian firms are in a race to the bottom implies that CEOs in Western companies are tempted to get more work done overseas.




To summarize the conclusion is, the recession has had mixed impacts on the BPO industry, and we may expect more instability in the future, especially given that this is a presidential election year in the United States, which is often linked with a stronger focus on outsourcing.



The BPO Industry’s Impact on the Global Financial Crisis

The Global Financial Crisis and the BPO Industry

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