Sri Lanka is a major tourist destination, renowned for its beautiful nature and wildlife. It serves as the primary source of income for the country, according to Sri Lanka’s economic statistics. However, there is an emerging industry that is playing a significant role in bolstering the Sri Lankan economy—the Business Process Outsourcing (BPO) Industry. Sri Lanka has been recognized as one of the top 10 emerging BPO destinations by Global Services Magazine.
The national-level competency development programs in Sri Lanka focus on establishing the country as a Center of Excellence (COE) in crucial domain areas. The BPM sector primarily concentrates on Financial & Accounting services, Investment research, Engineering services, and UK-based Legal services. The software services sector is centered around Telecommunication, Banking, Financial Services and Insurance (BFSI), and Software Testing. The government has identified the IT-BPM industry as a key sector for development and has taken positive steps, including providing fiscal incentives and concessions, to expedite its growth.
Affordability is one of the advantages of outsourcing to Sri Lanka. Despite having a skilled workforce, salary expectations in Sri Lanka are lower compared to developed countries like the United States, Canada, Australia, and most European countries. This is due to the significantly lower cost of living in Sri Lanka. Consumer prices in Sri Lanka are 70% less than in the United States, and grocery prices are 63% cheaper. Consequently, Sri Lankan employees can maintain a comfortable lifestyle with lower salaries compared to their counterparts in the United States. Additionally, Sri Lanka has been expanding its outsourcing sector to rural areas where the cost of living is even lower, enabling the rural BPO sector to offer services at even more competitive rates.
Sri Lanka also offers cost advantages in terms of infrastructure. According to a competitive benchmarking report by AT Kearney, telecommunications and infrastructure costs are significantly lower in Sri Lanka compared to developed countries and other popular outsourcing destinations. For instance, the average cost of Class A real estate in Sri Lanka is USD 227 per square meter, whereas it is USD 918 per square meter in India. The country’s telecom industry is competitive, with multiple providers offering significantly lower call rates compared to developed countries. Moreover, office space costs in Sri Lanka are considerably lower than in other popular outsourcing destinations such as the Philippines, Malaysia, and other South Asian countries. This affordability of rental space allows many BPO companies to establish their offices in prime locations, including the World Trade Centre in Colombo.
Sri Lanka boasts an intelligent workforce supported by a robust education system. Free schooling is available up to the secondary level, and the country has an impressive literacy rate of 92%, surpassing the global average of 86%. With 23 universities and numerous private higher educational institutions offering degree programs, Sri Lanka produces approximately 100,000 graduates annually. The majority of these graduates come from professional services fields such as computer sciences, law, medicine, architecture, engineering, and finance. English is the primary language used in the Sri Lankan business community, but employees proficient in other languages such as French, German, Italian, Spanish, Korean, Chinese, and Japanese can also be found.
Sri Lanka provides a favorable business environment with stringent intellectual property (IP) protection regulations, establishing national intellectual property rights offices to address awareness, policy issues, and enforcement. The country’s telecommunications system is on par with other leading nations in the region, and it was the first South Asian country to successfully trial a 5G standalone network. Sri Lanka has been ranked 54 on AT Kearney’s Global Services Location Index, considering its digital output, skills, legal adaptability, and corporate activity.
Compared to other countries in the region, Sri Lanka offers several advantages for outsourcing. The quality of its workforce is generally higher, leading to increased efficiency