Pakistan’s Business Process Outsourcing (BPO) sector is set to maintain stable growth, with revenues projected to grow at a compound annual growth rate (CAGR) of 6.23% from 2024 to 2029, according to a recent study by the Pakistan Software Exports Board (PSEB). The sector’s market volume is expected to reach $1.15 billion by 2029, up from a projected $0.85 billion in 2024, despite ongoing challenges.

The BPO industry in Pakistan comprises both domestic companies and foreign firms, including joint ventures. Most local BPO companies are small, employing between 5 to 25 people, and are exclusively focused on outsourcing services. Larger players in the market are primarily IT firms with BPO verticals, with few operating as pure BPO providers. The majority of these companies currently operate in the middle segment of the BPO value chain.

To expand the sector, the government’s BPO strategy for 2023-2027 aims to grow not only the middle segment but also the knowledge process outsourcing (KPO) segment, which focuses on higher-value services.

Pakistan’s Growing Potential in BPO and IT Services

Pakistan’s BPO industry has seen significant growth in recent years. The country was ranked as the most financially attractive destination for IT outsourcing in Kearney’s 2023 Global Services Location Index. Additionally, the International Labor Organization (ILO) ranks Pakistan as the second-largest supplier of digital labor services globally.

The country’s BPO offerings include a wide range of services, such as clerical and data entry, creative and multimedia, professional services, sales and marketing support, software development, and writing and translation. With an English-speaking IT BPO workforce of over 500,000 within a youth population of 132 million under the age of 29, Pakistan has the potential to further develop its outsourcing capabilities. Upskilling just 0.1% of this workforce in emerging technologies could significantly enhance the country’s competitiveness in global value chains.

The IT sector, in particular, has shown impressive growth. Pakistan’s IT and telecom export proceeds surged by 33.84% in the first month of the fiscal year 2024-25, reaching $286.395 million. Computer services exports grew by 44.14%, while software consultancy services rose by 47.38%. Call center service exports also increased by 33.61%, from $15.993 million to $21.367 million during the same period.

Beyond IT, Pakistan has opportunities to expand its footprint in other offshore services, such as research and development, management consulting, accounting, and advertising.

Roadmap for the Future

The Business Process Outsourcing Sector Strategy for Pakistan (2023-2027), developed by the Ministry of Commerce and the Trade Development Authority, outlines a comprehensive plan to position Pakistan as a competitive global BPO services provider. Key recommendations include:

• Tax reforms to create a more business-friendly environment.
• Talent development programs to upskill the workforce.
• Public-private collaboration to drive innovation and growth.
• Marketing initiatives to enhance Pakistan’s visibility in international markets.

The strategy also emphasizes investments in high-quality infrastructure, policies to support remote and hybrid work models, and measures to improve workforce retention. By focusing on higher-end BPO services, integrating artificial intelligence (AI), and expanding into KPO, Pakistan aims to diversify its offerings and attract global investors.

The government’s targeted interventions aim to improve Pakistan’s ranking in global service location indexes and establish the country as a preferred BPO hub in Asia. With its cost advantages and a large, trainable workforce, Pakistan’s BPO sector is well-positioned for sustainable growth over the next five years.

Pakistan’s Business Process Outsourcing (BPO) sector is set to maintain stable growth, with revenues projected to grow at a compound annual growth rate (CAGR) of 6.23% from 2024 to 2029, according to a recent study by the Pakistan Software Exports Board (PSEB). The sector’s market volume is expected to reach $1.15 billion by 2029, up from a projected $0.85 billion in 2024, despite ongoing challenges.

The BPO industry in Pakistan comprises both domestic companies and foreign firms, including joint ventures. Most local BPO companies are small, employing between 5 to 25 people, and are exclusively focused on outsourcing services. Larger players in the market are primarily IT firms with BPO verticals, with few operating as pure BPO providers. The majority of these companies currently operate in the middle segment of the BPO value chain.

To expand the sector, the government’s BPO strategy for 2023-2027 aims to grow not only the middle segment but also the knowledge process outsourcing (KPO) segment, which focuses on higher-value services.

Pakistan’s Growing Potential in BPO and IT Services

Pakistan’s BPO industry has seen significant growth in recent years. The country was ranked as the most financially attractive destination for IT outsourcing in Kearney’s 2023 Global Services Location Index. Additionally, the International Labor Organization (ILO) ranks Pakistan as the second-largest supplier of digital labor services globally.

The country’s BPO offerings include a wide range of services, such as clerical and data entry, creative and multimedia, professional services, sales and marketing support, software development, and writing and translation. With an English-speaking IT BPO workforce of over 500,000 within a youth population of 132 million under the age of 29, Pakistan has the potential to further develop its outsourcing capabilities. Upskilling just 0.1% of this workforce in emerging technologies could significantly enhance the country’s competitiveness in global value chains.

The IT sector, in particular, has shown impressive growth. Pakistan’s IT and telecom export proceeds surged by 33.84% in the first month of the fiscal year 2024-25, reaching $286.395 million. Computer services exports grew by 44.14%, while software consultancy services rose by 47.38%. Call center service exports also increased by 33.61%, from $15.993 million to $21.367 million during the same period.

Beyond IT, Pakistan has opportunities to expand its footprint in other offshore services, such as research and development, management consulting, accounting, and advertising.

Roadmap for the Future

The Business Process Outsourcing Sector Strategy for Pakistan (2023-2027), developed by the Ministry of Commerce and the Trade Development Authority, outlines a comprehensive plan to position Pakistan as a competitive global BPO services provider. Key recommendations include:

• Tax reforms to create a more business-friendly environment.
• Talent development programs to upskill the workforce.
• Public-private collaboration to drive innovation and growth.
• Marketing initiatives to enhance Pakistan’s visibility in international markets.

The strategy also emphasizes investments in high-quality infrastructure, policies to support remote and hybrid work models, and measures to improve workforce retention. By focusing on higher-end BPO services, integrating artificial intelligence (AI), and expanding into KPO, Pakistan aims to diversify its offerings and attract global investors.

The government’s targeted interventions aim to improve Pakistan’s ranking in global service location indexes and establish the country as a preferred BPO hub in Asia. With its cost advantages and a large, trainable workforce, Pakistan’s BPO sector is well-positioned for sustainable growth over the next five years.