TEXAS, UNITED STATES — New outsourcing statistics from Ataraxis rank the Philippines first among 193 nations for its global industry competitiveness.
The global business process outsourcing (BPO) market size is projected to reach $695.77B by 2033, with a CAGR of 9.9% from 2026 to 2033. Driving this market expansion are industries such as finance, healthcare, and IT, which are seeking to substantially cut costs while tapping into global talent bases for their specialized services.
This new report from Ataraxis also revealed a shift in the outsourcing landscape, primarily in terms of where companies are outsourcing.
In 2025, North America dominated the market, accounting for the largest revenue share (37.4%). Now, Asia is leading the race, with the Philippines and Malaysia ranking first and second, respectively, for outsourcing suitability.
The Factors Affecting Outsourcing Competitiveness
Ataraxis measured the 193 countries’ outsourcing suitability according to five key factors:
- Labor costs, including wages and compensation, and cost-effectiveness, accounted for 53.5%.
- English proficiency, including the workforce’s ability to communicate effectively, accounted for 20%.
- Talent availability, including the size and skill depth of the local workforce, and the availability of specialists, accounted for 17.5%.
- Digital infrastructure, including the reliability of internet and mobile networks, and access to cloud services and modern technology, accounted for 5%.
- Business, legal, and political stability, including the predictability of local regulations and the local economy, accounted for 5%.
Each country received a 0–100 score for each factor, weighted by its importance in global hiring decisions. From the 193 countries evaluated, the top 10 outsourcing countries of 2026 are:
- Philippines
- Malaysia
- India
- Chile
- South Africa
- Nigeria
- Peru
- Indonesia
- Argentina
- Romania
Asia leads the race for outsourcing talent. It’s currently supplying 40% of the top 10, cementing its position as the world’s most dominant outsourcing region.
Beyond the top 10, Africa is emerging as a growing outsourcing hub, with four countries ranking among the top 25 and accounting for 28% of the market. Nine African nations also ranked above the United Kingdom, which indicates that the competition has shifted.
How the Philippines Topped the Outsourcing Index
The Philippines remains a promising outsourcing hub, with top-10% English proficiency, top-5 % talent availability, and top-5% cost savings. It’s the only country in the dataset that hit all three factors at this level.
Its English proficiency score was 90 out of 100, placing it on par with Switzerland, Ireland, and Monaco, and ahead of Brazil, Spain, and Mexico. Its digital infrastructure scored 70, on par with Switzerland and Singapore, and ahead of South Africa, South Korea, the Netherlands, and Portugal.
Labor Costs Remain the Biggest Differentiator
Of the countries presented, the U.S. was placed remarkably low. It ranked only 86th globally, despite perfect scores in infrastructure, English proficiency, and talent availability—the only country to achieve combined perfect scores. It also received a very high score in business stability, supposedly making it one of the world’s most reliable locations.
However, among the 193 countries, the U.S. also showed the largest disparity between its labor costs and the other factors. It’s the 5th-highest labor cost in the world, after Liechtenstein, Monaco, Switzerland, and Luxembourg. It was also found to have significantly higher costs than Canada, Italy, Germany, France, and the U.K.
This data reveals that labor costs play a critical role in the outsourcing market. For the U.S., its high labor costs overrode the other advantages. Without this variable, it would have ranked among the top global outsourcing markets.
