Vietnam has taken the lead in the list of the world’s top Business Process Outsourcing (BPO) locations for the first time, according to the report from US-based global real estate advisor Cushman & Wakefield. The list took into account costs, risks, and operational conditions, reports gulf-times.com.

Vietnam was ranked fifth in the 2014 report, while last years’ leader Romania fell back to fourth in the 2015 list.

The list is not ranked in terms of overall value or turnover, which would make India (ranked 20^th in 2015) the largest BPO market; with 2.8 million people employed and an export value of approximately USD 19 billion in 2014, followed by the Philippines (ranked 2^nd in 2015); with 750,000 employees and USD 14.4 billion in export value.

According to Richard Middleton, Head of Occupier Services for Asia-Pacific and Europe, the Middle East and Africa for Cushman & Wakefield, Vietnam has benefited from its government’s policies to promote the country as an outsourcing destination. The country’s services segment is expected to expand rapidly given that the average age of the country’s workforce is below 30 and up to 1.5 million people are entering the labour market every year.

Government incentives have also led to a fast growing software industry with now more than 1,000 companies employing a workforce of around 80,000 labourers. In recent years, Vietnam has become one of the world’s largest software exporters in the world and has already grown to the second biggest BPO and IT outsourcing destination for Japan behind the Philippines.

“While not the cheapest outsourcing destination, Vietnam is still very competitive when compared to other global locations as wage rises in India and China largely contributed to it surging up the ranking to take first place in 2015,” Mr Middleton said, adding that the Philippine market in the meantime has been “maturing” towards an established BPO destination.

The only other Southeast Asian country ranked in the top 20 is Malaysia in sixth place. The region is facing increasing challenges from Eastern Europe countries; such as Romania, Bulgaria, Hungary, Czech Republic, Poland and – new entrant – Lithuania. All of the countries are able to provide well-educated staff and still relatively low labour costs.

Another new entrant in the market is Saudi Arabia, ranking 30 on the 36-county list. The cheapest BPO destination on the list is El Salvador, but it has the list’s worst operating conditions and one of the worst business risk rankings. 

Overall, the global BPO market is expected to reach revenues of USD 93.4 billion in 2015, up at an average annual growth rate of 5.4% from USD 71.9 billion in 2010, according to a UK-based market research firm Ovum.