The Economic Impact of BPO in the United States

In earlier articles, we examined how the BPO phenomenon has affected Pakistan and other Asian countries that have reaped enormous economic gains. In this essay, we examine the opposite side of the coin, namely the benefits to Western economies as a result of outsourcing company operations and back office labour.





First, organisations who outsource their back office labour benefit from considerable cost reductions as a consequence of BPO. This is due to the wage disparity between the West and the East, which allows for cost savings of up to 50% when the same job can be completed in Pakistan and other Asian nations for a fraction of the cost in the US or Europe.


Furthermore, BPO allows western corporations to focus on higher-end value-added work while also allowing them to focus on their core strengths. The premise is that by outsourcing ordinary and tedious labour, western corporations have more time and resources to focus on work that is further up the value chain, adding significant value to their organisations.


Many observers in the West have emphasised this point, urging corporate executives and politicians in the United States and Europe to consider it before raising a fuss over outsourcing. Given that most outsourced labour provides a cost advantage as well as the ability to focus on core capabilities due to lower overheads, this is a double whammy benefit that few organisations in the US and Europe can overlook.


Finally, in these difficult economic times, any cost reductions are appreciated, and BPO provides a surefire means for recession-stricken enterprises in the West to increase their profitability and margins. Companies can expand through increasing sales, lowering costs, or doing both. Companies generally attempt to minimise expenses during times of economic depression since boosting sales becomes challenging due to the bleak economic environment. As a result, outsourcing their back office labour to firms in Pakistan and other Asian nations is a logical and apparent alternative for such an undertaking.




Lastly the result is, BPO is a win-win situation for both the organisations who outsource their labour and the businesses that serve as vendors and partners. As a result, the BPO phenomenon has resulted in net advantages for both parties involved in the transaction.



The Economic Impact of BPO in the United States

The Effects of BPO on the US Economy

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