Here’s Why the IT-BPM Sector Should See Freelancers as Competition
According to Jack Madrid, the President of the IT and Business Process Association of the Philippines (IBPAP), freelancing is “a force that is hard to stop.”
There are more than 1.5 million freelancers in the Philippines today and, according to Jack Madrid, the President of the IT and Business Process Association of the Philippines (IBPAP), they should be seen as competition by the information technology and business process management (IT-BPM) industry. In fact, in an interview with the BusinessWorld, he describes freelancing as “a force that is hard to stop.”
“I think as an industry, we need to accept it as a challenge because that was catalyzed by the pandemic,” he says. “It was catalyzed by the fact that we can now work from home.”
“Some people really do not want to work in the office,” Madrid adds. “It is just an interesting result of our work flexibility. This is the new world of work.”
The IBPAP president further points out that business process outsourcing (BPO) companies, in particular, need to accept the gig economy as their competitor.
What is the Gig Economy?
Investopedia has defined the gig economy as “a labor market that relies heavily on temporary and part-time positions filled by independent contractors and freelancers rather than full-time permanent employees.”
A number of factors have contributed to the growth of the gig economy. From the employer’s side, one main factor is the wider talent pool that they can choose from—not limited by the job applicants’ proximity to the workplace. Economic reasons have also contributed to the growth of the gig economy, including an employer’s incapability of hiring full-time employees. This means opting for part-time employees instead.
On the side of the employees, flexibility and independence are key factors that they often find enticing about freelancing. As previously stated as well, the proximity to where the company is located is a non-factor—given that their jobs can usually be done online from anywhere.
Why Competition Does Exist Between IT-BPO and Freelancers
BusinessWorld notes in its report that the demand for freelancers has actually increased worldwide, according to the 2023 Global Freelancer Insights Reports of financial technology company Payoneer.
“A growing number of businesses are relying on freelancers to support their full-time workforce because of convenience, flexibility, and outstanding quality of work,” says Monique Avila, Payoneer’s Country Manager for the Philippines.
This highlights the competition between freelancers and the IT-BPO industry, given that freelancers have the advantage of convenience and flexibility—thus making them more appealing as compared to BPOs. Moreover, the work-from-home setup that freelancers usually have also appeals to companies who look to cut costs by hiring remotely.
Freelancing in the Philippines
Believe it or not, the Philippines ranks as the sixth fastest-growing freelance market in the world. It is also one of the leading countries for freelancing revenue growth at a whopping 208%, according to MarketSplash. These numbers show that there is significant growth in the gig economy of the country, which has been further bolstered by the COVID pandemic.
However, MarketSplash notes that there is a “concerning finding” when it comes to freelancing in the country. “In the Philippines, female freelancers outnumber male freelancers three times over, highlighting a gender imbalance in the country’s freelancing industry,” MarketSplash notes.
MarketSplash has also pointed out that “On average, Filipino freelancers earn around $780 (approximately PHP 43,500) monthly, indicating a lower income level than in some other countries.”
Given the multiple factors that make freelancing more appealing to Filipinos, it is no surprise that there is growth in the gig economy here in the country. However, freelancing also has its downsides, and anyone considering going to this style of work must heavily consider all the pros and cons in order to make a well-informed decision on whether they should freelance or work at the office instead.