Bangladesh, located in South Asia, is an emerging outsourcing destination to run business operations at a fraction of the cost. Outsourcing costs in Bangladesh are quite low compared to developed countries like the US and many other popular outsourcing destinations in Asia like China.
Outsourcing to Bangladesh has increased thanks to digital innovation and business-friendly policies in the last decade.
In this article, we’ll take a look at four benefits and three challenges of outsourcing to Bangladesh. We’ll also explore the top three services to outsource to Bangladesh.
Let’s get started.
Table of Contents
- 6 key benefits of outsourcing to Bangladesh
- 3 potential challenges when outsourcing to Bangladesh
- Top 4 industries to outsource in Bangladesh
6 key benefits of outsourcing to Bangladesh
Bangladesh has emerged as a preferred outsourcing destination for many global companies in recent years. The country has an abundant skilled workforce and has shown significant economic growth in the last two decades.
Goldman Sachs has included Bangladesh in their “Next-11” list of countries after the BRICS (Brazil, Russia, India, China, and South Africa) nations.
This list, based on parameters like infrastructure investments, human capital, and economic growth, indicates Bangladesh’s potential as an outsourcing destination.
Additionally, according to the Oxford Internet Institute, the country has become the second-largest supplier of online labor globally.
Let’s check out some benefits of outsourcing to Bangladesh in detail.
1. Low labor and living costs
In Bangladesh, the average salary of a typical employee is USD 301 per month (26,000 BDT, Bangladeshi Taka), according to stats on SalaryExplorer. This is significantly lower when compared to major Asian outsourcing hubs like India (USD 428), China (USD 1,145), and the Philippines (USD 3,218).
Additionally, an outsourcing company in Bangladesh can take advantage of low living costs in the country. Lower living costs mean lower operational costs and higher profits.
For instance, Bangladesh has one of the lowest internet charges (USD 30.77 per month) across South Asia.
Similarly, Dhaka’s office space rents (USD 1.15 per square foot) are significantly lower when compared to cities like Mumbai, India (USD 1.40) and Manila, the Philippines (USD 2.19), as per Statista.com.
All these factors can help your company save business costs and improve your company’s bottom line.
2. High-quality service
The service quality of Bangladeshi outsourcing firms and freelancers is on par with other Asian outsourcing hubs.
Besides, Bangladeshi employees are known for their excellent work ethics. So when you outsource to Bangladesh, you can expect timely and satisfactory delivery of your projects.
Additionally, the steady growth in the country’s digital infrastructure is pivotal to the high-quality service experience. Bangladesh ranks 35th on A.T Kearney’s 2021 Global Services Location Index as a thriving digital hub.
Further, Bangladesh is among the top 10 countries to show remarkable improvement in service quality, according to Upwork. The South Asian nation is also the 3rd largest country registered with Upwork for freelancing activities.
So it’s no surprise that Bangladeshi freelancers and IT companies serve clients from 50+ countries like Germany, Japan, and Australia.
3. Availability of skilled human resources
The literacy rate in Bangladesh (74.9 in 2020) has been steadily improving with the increased use of technology in the education sector. More government funding and growing NGO participation too have boosted the country’s educational system.
This has helped increase the skill level and job-readiness of the local workforce, increasing their demand globally.
Freelancing has become the main source of income for Bangladeshi graduates. More than 65,000 Bangladeshi freelancers are currently registered on Upwork, a marketplace for freelancers).
Besides, the nation has more than 1,500 outsourcing firms, giving Bangladeshi talent a solid platform in the outsourcing market.
4. Pro-business policies
The business-friendly policies of the Bangladesh government have made the country an attractive outsourcing destination in the global market. This is especially true in the ICT (Information and Communications Technology) sector.
Here are some of the steps taken by the Bangladeshi government to enhance outsourcing possibilities in the country:
- The National Economic Council Executive Committee (ECNEC) has approved 180 crore BDT (USD 208,747) for outsourcing training under the “Learning and Earning Development Project.”
- Initiative to create 55,000 freelancing professionals at the Upazila level (the third largest administrative region in Bangladesh after divisions and districts).
- Converting 4000+ UISCs (Union Information Service Centers) into mini freelancing training centers. UISC is a government initiative to provide better access to ICT in rural communities.
- 100% tax exemption for the IT-enabled service (ITES) companies and SMEs until 2024.
- ‘Learning and Earning Program’ to encourage women to take up freelancing. The goal is to promote women’s participation in the BPO (Business Process Outsourcing) sector or as entrepreneurs who can contribute to the economy.
- Associations like BASIS (Bangladesh Association for Software and Information Services) and BCC (Bangladesh Computer Council) are continuously working to build up and expand the outsourcing sector.
5. Advanced infrastructure
The government has set a target to generate export revenues of 5 billion USD from the ICT sector by 2030. To achieve this target, the Bangladesh Hi-Tech Park Authority is working to support technology adoption, policies, and employee skill-up facilities throughout their investment journey.
As part of this initiative, the Bangladeshi government approved a project to set up 12 high-tech parks in Dhaka and other districts in 2017. The construction for these began in February 2022.
The project aims to further strengthen the ‘Digital Bangladesh’ program and the local IT industry with cutting-edge networking systems, fiber optic connections, and smart building solutions.
These parks will support the training of 2,400 people in the field of machine learning, robotics, IoT (Internet of Things), artificial intelligence, and other advanced technologies.
It’s clear that there are numerous benefits of outsourcing to Bangladesh. However, there are a few issues plaguing the current outsourcing scenario in Bangladesh. We’ll look at some of the drawbacks in the next section.
3 potential challenges when outsourcing to Bangladesh
Here’re three challenges that you may face while outsourcing to Bangladesh.
1. Electricity shortage
The gap between electricity demand and production is bound to increase in the coming years. Moreover, most power plants run on non-renewable sources and may not be future-proof.
However, the local government is taking steps to increase the power lines and thus increase the supply of electricity throughout the country. It plans to generate 40,000 MW of power by 2030 to solve its energy crisis.
2. Internet connectivity issues
Poor internet speed, especially on mobile devices, is a major roadblock for the ‘Digital Bangladesh’ program. Bangladesh ranks 129th on Ookla’s 2021 Speedtest Global Index.
Bangladesh ranks 98th among 176 countries, with its download and upload speeds recorded at 31.28 Mbps and 29.60 Mbps, respectively. On the other hand, the average global download and upload speeds were 113.25 Mbps and 63.15 Mbps, respectively.
Due to the ever-increasing number of Internet users in Bangladesh, the government is expanding the fiber-optic networks to more remote areas. This helped them increase their Internet penetration to 66% in April 2021 – up from 12.9% in 2019.
3. Communication challenges
Inadequate English communication skills prevent new freelancing professionals from getting a job in the BPO sector or pursuing freelance outsourcing work with global clients.
Fortunately, the government, along with several Non-Government Organizations (NGOs), have been putting in steady efforts to improve the quality of English teaching in secondary education since the 1990s.
So, which business operations should you outsource to Bangladesh?
We’ll find out in the next section.
Top 4 industries to outsource in Bangladesh
Here’s a closer look at the services most commonly outsourced to Bangladesh:
1. Information technology
Businesses in this digital age typically have some specialized IT needs. Tasks like mobile application development and website development become crucial if you run an e-commerce platform or plan to have a wider online presence.
Bangladesh is fast becoming the go-to destination for software development outsourcing and offshoring in South Asia. According to a recent case study by the University of Oxford, software development is the most outsourced service to Bangladesh.
Software development engineers in Bangladesh are well-versed in full-stack (front-end and back-end) web development. They can create an entire website or mobile application from scratch as per your business requirements and help you improve the overall customer experience.
Lastly, an ever-increasing number of technical graduates and skilled human resources are helping the Bangladeshi IT outsourcing industry to grow quickly.
Many international IT and BPO companies like IBM, Fujitsu, and Sony, have outsourced software development in the country.
Here’s a list of top IT companies in Bangladesh to consider for your outsourcing needs.
- HYPE Dhaka: A digital communication consultancy situated in Dhaka Bangladesh providing web development and social media marketing services.
- SkyTech Solutions: A company providing all types of IT services, including web development, software development, and web designing.
- WpHostsell: A web hosting company situated in Khulna, Bangladesh.
2. Garments manufacturing
The South Asian nation is already a key player in the global apparel manufacturing industry, second only to China. The RMG (Ready-Made Garment) sector accounts for nearly 84% of Bangladesh’s exports.
One key selling point for apparel industries is that Bangladesh offers the world’s least expensive garment cost. That’s because Bangladesh provides duty-free (or reduced tariff) market access to more than 50 countries worldwide.
But rather than resting on its low-cost differentiator, the apparel industry in Bangladesh is deploying new technologies, rising up the value chain, and diversifying its production capabilities.
Here’s a list of top garment manufacturing outsourcing companies in the country.
- Ha-Meem Group: A leading Bangladeshi supplier of readymade garments and denim fabric in the world, headquartered in Dhaka.
- Ananta Group: The Dhaka-based Bangladeshi company designs, develops, and manufactures apparel for some of the leading apparel brands in the world, including Mango, H & M, and Walmart.
- Plummy Fashions Limited: A Dhaka-based garment company known for its environment-friendly manufacturing practices. Their clientele includes some of the leading brands like Calvin Klein, DKNY, and Fila.
3. Virtual assistant
A virtual assistant is an independent employee or a freelancer who provides administrative services to clients while operating outside of the client’s office. Business owners prefer hiring virtual assistants from countries with low labor costs.
Virtual assistants from Bangladesh charge lower hourly rates ($8.65) than their American ($29.52) or British ($23.41) counterparts.
Moreover, Bangladeshi virtual assistants are in high demand due to their neutral accents, as compared to other South Asian countries like India and the Philippines.
Lastly, as most virtual assistant firms in Bangladesh are startups, they are more likely to provide quality services to retain their clients and scale their outsourcing business.
Here’s a list of some virtual assistant service providers.
- Global Racket: Virtual assistants and telemarketing services.
- ASL BPO: Virtual assistants to small and medium-sized businesses.
- MyOutsourcing LTD: Virtual assistants and back-office support.
Check out this guide on what a virtual assistant does and how to hire one.
4. Graphic design and multimedia
According to the Design Crowd, Bangladesh has more than 1,000,000 graphic designers. Additionally, if you add web design service providers, the numbers add up significantly.
Bangladeshi freelancers and companies provide high-quality web designing services with quick turnaround times.
Here’s a list of companies providing web design services to an international clientele.
- Dcastalia Limited: UX/UI design, website design and development, software development, digital marketing, and website maintenance.
- Avista Digital: SEO (Search Engine Optimization), social media, and WordPress web design services.
- Designli: Responsive websites and mobile app development.
Wrap up
Outsourcing is a highly competitive industry, and Bangladesh’s high-quality service and low labor costs have helped catapult the country into a top outsourcing destination.
You can use the information shared in this article to understand how outsourcing to Bangladesh can benefit your business. You can also map out a plan before partnering with any Bangladeshi outsourcing service provider.
Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.