The global market for Business Process Outsourcing (BPO) is projected to reach $220 billion by 2020. BPO is the outsourcing of a specific business task, such as payroll, or marketing to a third-party service provider.
Outsourcing has become a common practice in any sector. For example, in late 2011, 18% of non-agricultural and non-financial companies of 50 or more employees located in France outsourced some of their activities abroad especially in manufacturing and the sector of information and communication. In addition, 28% of companies belonging to a multinational group outsource internationally.
Asia attracts more and more companies willing to relocate some of their activities. Indeed, for foreign investors, China is no longer the ideal place because the wages quadrupled within the last decade. As a result, more and more investors decide to choose countries like Cambodia or Bangladesh. In 2011, Minebea a Japanese electronics manufacturer invested US$60 million to build a factory located in the Phnom Penh Special Economic Zone.
The reasons why you should outsource in Cambodia are:
The first and main reason is the dynamic and low labor cost. In comparison with China, the minimum salary in the garment sector is between $155 and $321 whereas in Cambodia, it is $153 (2016). Moreover, Cambodia has a young and dynamic population with a median age of 24 years vs 34 years in China.
Secondly, your company needs specific knowledge and experiences in a specific fields such as accounting or marketing. The external companies can bring you expertise and knowledge enables your company to improve the quality of your products or services. KSO or K-Digidata are companies in Phnom Penh specialized in data analysis and document processing. KhmerDev is specialized in outsourcing IT services such as web development or webmarketing services since 2001.
Moreover, your human resource departments won’t be in charge of hiring and maintaining the manpower. The outsourcing company will be enabling you to reduce the pressure on HR department and reducing risks of law compliance and burden of administration or paper work.
Furthermore, Cambodia is situated in the center of ASEAN with a flight time average of only 1:30 hours to other ASEAN countries.
Finally, Cambodia has very competitive investment incentives: tax holiday is between 0% up to 9 years and corporate tax is very low: 20%.