Outsourcing in Southeast Asia in 2024: Why Malaysia Leads the Way

While other Southeast Asian countries compete for the BPO spotlight, Malaysia shines brightly as a unique powerhouse in the region. Its blend of top-notch talent, technology, and government support offers a compelling proposition for businesses seeking to outsource and optimise.

In today’s fast-paced digital world, staying up-to-date with technology can be daunting. That’s where BPO comes in.

To take the tech upgradation load off and focus on the business itself, a founder has to look no further than Business Process Outsourcing (BPO) and its multitudinous benefits. The ever-growing BPO industry enables business owners to outsource the building of their tech stack and any non-core tasks to experienced service providers.

The BPO industry in Southeast Asia, in particular, is booming, with Malaysia emerging as a leading destination for outsourcing services. According to Statista, BPO revenue here is expected to show an annual growth rate of 6.36%, resulting in a market volume of US$1.96 billion by 2029.

Among the throng of BPO players here, SummitNext, recognised as a top Southeast Asian outsourcing provider by Clutch, offers a wide range of solutions, backed by a team of experienced professionals and a commitment to innovation.

4 Reasons That Make Malaysia A Top BPO Destination

Malaysia has rapidly gained ground as a top contender in the global BPO landscape in recent years.

Overall, the country’s lower labour costs, supportive regulatory frameworks, strong infrastructure, and cultural, locational and linguistic advantages make it favourable for the outsourced operations of businesses catering to a diverse global clientele.Founders seeking to unlock the full potential of their businesses can certainly tap into the market here for a seamless BPO strategy aligned with their business goals in every way.

Here are a few top reasons that place Malaysia squarely on the map for business process outsourcing in 2024.

1.    A Stable Foundation in the Political and Economic

Malaysia’s pro-business government welcomes companies that wish to benefit from the burgeoning BPO market. The government’s policies, along with a stable economy and a favourable business climate, have created an ideal environment for companies seeking to outsource their operations.

One of the critical factors driving Malaysia’s BPO growth is the government’s commitment to promoting foreign investment.  Malaysia’s financial plans have consistently prioritised the outsourcing industry, with a singular focus on enhancing IT and digital infrastructure. Initiatives such as the Malaysia Digital Economy Corporation (MDEC) have significantly fostered a conducive ecosystem for BPO companies over the past couple of decades.

In recent years, the government has been investing heavily in building new data centres and IT parks across the country.  For instance, the Cyberjaya Digital Hub, a major IT park in Selangor, has been expanded to accommodate more outsourcing companies.

Also consider the Malaysian government’s tax incentive from 2023 for companies investing in artificial intelligence (AI) and data analytics technologies. This incentive aims to attract a steady flow of AI-related outsourcing projects to the country.

Such initiatives make Malaysia a compelling destination for outsourcing as the ease of doing business trends upward. The country has consistently ranked high in global surveys for easeNi of doing business. It led the SEA region with a rank of 12 among 190 economies in the last World Bank annual ratings in 2020. Thailand came close behind at 21, while Vietnam (70), Indonesia (73) and Philippines (95) were placed in the top half of the list too.

2.    A Talent Hub for Excellence

Did you know human resources is one of the top three most outsourced business functions, alongside finance and IT?

Businesses worldwide face the relentless challenge of pursuing top-tier talent at reasonable costs. By outsourcing human resource management functions to BPO providers, companies can shift the load and focus on core competencies.

Recruitment Process Outsourcing, or RPO, is all about optimising, streamlining, and enhancing your recruitment efforts. A recent study by RPOA revealed that companies utilising RPO services experienced a 67% increase in revenue last year, compared to just 33% for those without RPO.

When it comes to quality resources, Malaysia’s commitment to education and skill development has positioned it as a prime source of skilled talent. The government’s emphasis on STEM education and workforce development programs has resulted in a growing pool of individuals with the expertise and qualifications needed to meet diverse business needs.

Malaysia has also solidified its position as a leading English-speaking nation in Asia, ranking 25th out of 113 countries in the EF English Proficiency Index. Malaysia’s linguistic diversity, bolstered by its high English proficiency, enables companies here to offer tailored BPO solutions across markets, enhancing customer service for the Asia Pacific region and beyond.

At SummitNext, our experienced team offers tailored human resource and hiring solutions that address our clients’ unique needs. Leveraging our extensive network and deep understanding of the Malaysian market, we provide access to a highly skilled and multilingual workforce, enabling businesses to accelerate innovation and achieve sustainable growth.

3.    Business Solutions on a Budget

Looking to cut costs without compromising quality?

Malaysia’s BPO landscape offers a compelling solution. With the government-backed grants and tax incentives, the country’s top BPO outfits provide a budget-friendly, effective and efficient option for businesses looking to outsource operations and drive growth.

Compared to other Asian countries, Malaysia builds in the competitive advantages of lower labour costs and operational charges. Its strategic location ensures seamless connectivity to major markets towards hassle-free operations and timely service delivery.

Malaysia also leads on the technology front, with an intense focus on various levers of cost-effective solutions. The country’s ambitious “Malaysia Robotics Roadmap 2021 to 2030” outlines the vision to become a regional robotics hub and drive economic growth. With a focus on automation and Industry 4.0, Malaysia aims to increase labour productivity and create a more competitive business environment.

SummitNext’s innovation-driven strategies are aligned with this vision. Our RPA (Robotic Process Automation) technology can automate repetitive tasks, such as data entry and report generation, freeing up human resources for more strategic activities.

By leveraging SummitNext’s technological capabilities, businesses can:

• Streamline operations: Automate routine tasks to improve efficiency and reduce costs.
• Enhance accuracy: Minimise human error and ensure data integrity.
• Boost productivity: Free up employees to focus on high-value activities.

4.    Fueled by Strong Infrastructure

Imagine a country where businesses can set up to connect with clients worldwide, move goods and personnel efficiently, and harness the latest technology to streamline operations. That country is Malaysia.

With its reliable telecommunications, efficient transportation and advanced IT, the country attracts companies from around the globe looking to expand their operations and tap into a boundless market.

Malaysia’s high-speed internet connectivity offers a digital superhighway reaching nearly every corner of the country, allowing businesses to enjoy seamless communication and collaboration. For example, a multinational call centre in Kuala Lumpur can easily handle thousands of calls from customers worldwide, thanks to its reliable and speedy network.

Beyond telecommunications, Malaysia’s transportation infrastructure is equally impressive. Major airports like Kuala Lumpur International Airport and Penang International Airport connect the country to key markets.

What’s more, Malaysia’s commitment to technology is reflected in its state-of-the-art IT infrastructure, providing businesses with access to the latest tools and resources.   The country’s steadfast vision for digital transformation, crystallised in MyDigital and other initiatives, further nurtures the BPO hotbed.

Even as global tech companies continue to up the ante on their investments here, the Malaysian prime minister in October 2024 unveiled an exciting plan to position the country as an AI hub by 2030 through a national office that will govern and drive the ethical adoption of the new technology across sectors.

Wrapping Up

In the dynamic world of BPO, Malaysia has already made its mark. Its unique synergy of linguistic diversity, government support, future-forward technology and efficient processes position it as the top choice for outsourcing in Southeast Asia.

However, what truly sets Malaysia apart is its youthful, educated, and multilingual workforce. This talented pool of professionals offers a fresh perspective and cutting-edge solutions that can help global brands stay ahead of the curve.

As the BPO landscape continues to evolve, businesses are increasingly seeking partners that can provide comprehensive and innovative solutions. SummitNext leads the charge as a provider of choice, offering a wide range of services from personalised customer service and adaptive learning models to analytics and real-time data visualisation.

By partnering with SummitNext, you can lean on our expert team for all your resource-intensive work and catapult your business offerings and brand growth.

To learn more about how SummitNext can help your business succeed, contact us today for a consultation.