80% of small businesses plan to outsource services in 2021. Whether to access specialized expertise, handle large-scale workloads, or facilitate growth, companies increasingly see outsourcing as a solution to every problem. Here are the 4 prominent trends trends on finance and accounting outsourcing industry that you should be aware of during and post Covid-19.
1. Global Finance and Accounting Outsourcing Industry is projected to reach $51.5 billion by 2027
Despite the impact of COVID-19, Finance & Accounting Business Process Outsourcing (F&A BPO) segment is expected to revise 5.5% and reach $16.6 billion by the end of the next 7-year period.
2. Automation and artificial intelligence (AI)
AI and automation can relieve accounting professionals of time-consuming, manual tasks, freeing up more time to perform value-adding tasks such as analyzing data trends, establishing client and interdepartmental relationships, and in 2021, providing that added support to businesses in terms of reporting compliance.
3. Cloud technology & remote work
In 2021, 1 in 2 accountants will work from home, and, to work remotely effectively, cloud technology is essential. Businesses are no longer constrained to do business locally, and offshoring basic accounting tasks has become popular due to its reliance on cloud technology. Not only can businesses save on employment costs by outsourcing to countries with lower costs of living, but the quality, communication and collaboration between accountants onshore and their counterparts offshore is maintained by these cloud-based programs.
4. The role of data
As technology, AI and automation infiltrate the accounting industry, more comprehensive data are expected to become available to accounting firms, further influencing their important role in business decision-making positions. Not only will accountants need to understand accounting principles and frameworks, but also become data specialists within their own fields to become valuable advisors to their organizations. This is so accountants will have the skills needed to compete in post-COVID environments
With such high and continuously growing demand for finance and accounting services, why outsourcing to Vietnam?
1. Vietnam is among Top 5 outsourcing locations in the world
According to the 2019 A.T. Kearney’s Global Services Location Index (GSLI) – an indicator of a country’s potential and fit to deliver business services to global companies. Vietnam was ranked at Top 5 outsourcing locations in the world, in which our financial attractiveness scale was as high as India at 2.82 points, skills and availability are rated higher than Malaysia and Thailand while the business environment is perceived more attractive than India and Indonesia.
2. 55 million people in working age
The labor force aged 15 and higher in Quarter IV/2020 has reached 55.1 million people, an increase by 563.8 thousand to the previous quarter. Yet the number still falls short of 860.4 thousand people in comparison to the same period of the previous year. This, again, has demonstrated the recovery tendency of the labour market after a record fall in Quarter II of 2020 due to Covid-19 pandemic.
3. 13 million people have been trained with Diplomas and Certificates
Out of the total number of people participating in the workforce, about 13 million people have been trained with Diplomas and Certificates. Employed workers continued to increase up 20% among all economic sectors, labor structure shifted rapidly, however, jobs requiring skills are limited. Not only that, in PwC Report on Vietnam Digital Readiness 84% Vietnamese respondents would learn new skills now or completely re-train in order to improve future employability, as compared to the responses at global level (77%). 93% are currently learning new skills, with the majority of these respondents saying that they are learning independently.
4. 5.5% urban workforce is currently underutilized
Labor underutilization rate in 2020 in urban areas is 5.5 percent, higher than that in rural areas at 4.8 percent. The majority of underutilized workers are those under 35 years old – an account of 56.5 percent to the total, while the workforce under 35 years old accounts for only 36.6 percent of the whole labor force. This shows that Vietnam still has a significant part of the labor force untapped, especially the young worker group. In the context of the COVID-19, the use of this group of workers is becoming more limited.
With those interesting numbers, it is fair to say that Vietnam is one of the world’s most promising destinations for BPO services that can compete with other BPO giants like India and the Philippines. Especially in accounting functions, talents in Vietnam are gradually gaining more knowledge and skills. If provided with adequate trainings, they can work on any high skill office tasks for any international market with higher level of customization, accuracy, timeliness, and creativity.