IT skills shortage seen driving European outsourcing trend
Thursday, April 17, 2008

MANILA, Philippines--The lack of available of IT workers is forcing companies in Europe to outsource work offshore, according to the head of Team Europe.

Team Europe is a recently-formed alliance of Philippine-based business groups--including the ECCP (European Chamber of Commerce in the Philippines) and BPAP (Business Process Association of the Philippines)--whose goal is to promote the country's outsourcing industry in Europe.

According to Stephanie Weber, head of Team Europe, the outsourcing market in Europe last year overtook the US for the first time both in terms of volume and contract value.

The overall market in Europe is valued at around $28 billion, but according to Team Europe's estimates, the Philippines' market share is less than two percent.

"There is a huge shortage in IT skills in companies, for example those doing development work on SAP," said Weber, when asked why Europe is now a lucrative market for outsourcing.

She added: "Companies don't have enough workers so they either have to refuse contracts or go elsewhere to outsource work."

Like those in the US, companies in Europe are now catching up with the outsourcing trend.

"Another reason is the global economy forces businesses to save costs," added Weber. "Salary levels in Europe right now are quite high so business that can be done elsewhere for a lower price is outsourced."

A major stumbling block, however, is not too many companies in Europe are aware that there is a BPO industry in the Philippines. Team Europe's primary goal is to raise awareness about the Philippines as an offshore destination.

"The Philippines won't win every contract but it should at least be in the shortlist of companies looking to outsource," said Weber. "The Philippines isn't even on that shortlist right now.