As the competitive landscape continues to increase, so will the popularity of outsourcing. Outsourcing has become an essential requirement when it comes to establishing and maintaining business and operational efficiencies. As a result, ‘which countries are the best for outsourcing’ has become a commonly asked question amongst all businesses looking to extend their operations off-shore.
A.T. Kearney, a leading consulting firm, regularly surveys countries based on financial attractiveness, labour quality and business environment. The firm also conducts an annual survey on the best outsourcing centres in the world, where Sri Lanka has regularly been featured in the top 20 destinations for outsourcing. This is largely due to the improvement in labour costs, work quality and friendly business environment. Additional factors such as; low staff turnover and a multitude of geographic/lifestyle diversities to explore from, has also contributed to the attractiveness of the destination.
Improved Labour Costs
Sri Lanka ranked number eleven on the A.T. Kearney ranking system for best outsourcing destinations in 2017, which was an improvement over the previous year by three spots. The increase in rankings is attributed to an improvement in the quality of the workforce, better labour costs, and an improved business environment. According to studies, companies can save as much as 30% in labour costs without compromising the quality of their work. Thus, Sri Lanka is a great outsourcing destination for both Fortune 500 companies and small start-ups looking to maintain cost efficiencies.
Better Quality Workforce
The workforce has improved its technical and soft skills due to better education and more opportunities. There are numerous institutions dedicated to teaching software development, accounting, and other technical vocations. The educational institutions produce more than 20,000 graduates, giving them a solid foundation in technical and soft skills. Additionally, since there aren’t many large players operating their offshore centres locally, absorbing all the available talent, even smaller companies can attract the best talent.
Excellent Business Environment
Sri Lanka is quickly developing a thriving ecosystem of IT companies. The country has more than 300 IT and BPO companies that employ more than 80,000 people. Most of these companies are small and medium enterprises. However, management in these companies continually invests in the latest technology and human resource practices to help their employees perform at their best. The industry continues to grow as companies continue to grow and expand. Sri Lanka’s IT ecosystem is thriving thanks to the pro-business-friendly stance taken by the government.
Low staff turnover
Majority of the employees seek career stability as a high priority, which in-turn leads to lower staff turnover rates. Employees would much rather dedicate themselves to organisations with a sturdy foundation that facilitates and nurtures their growth requirements, as opposed to jumping from one to another. Companies capitalise on this by enhancing their HR management in order to fortify the relationship with the workforce. This however is mainly seen within the senior ranks, with the minor ranks still exhibiting tendencies to switch after an average of 2 years, until they find a place that is the ideal fit for them.
On top of the above business oriented factors, when it comes to destressing or just enjoyable leisure time, the island alone has much to offer. The sunny sandy beaches of the coast, the mystic mountains at the centre, the amazing wildlife reserves spread across the country and the exciting nightlife in Colombo and the down south regions, can be reached within a couple of hours of travel. This provides ample exploration and extracurricular activity options for family time or leisure periods.
Sri Lanka has been consistently climbing the ranks of ‘top outsourcing destination’ ranking lists. With the countries recent progress contributing to this climb, the Sri Lankan governments has set its sights firmly on developing the countries reputation for outsourcing, especially in the ICT/BPO sector. The recently launched initiative to affirm the countries identity as an “Island of Ingenuity”, is a prime example of the emphasis placed on the development of the Software Development Outsourcing sector.