At this present time, some might believe that the world has seen the worst epidemics. Yet, with the surge in population, travel, trade, migration and climate change, a new era in the risk of epidemics has begun. In short,globalization has made the world more vulnerable. Despite advancements, the world remains ill-prepared to detect and respond to disease outbreaks. This poses a major threat to the world. There is now a level of risk that businesses have to concentrate on.

As of this writing, there are more than 90,000 confirmed cases and 3,086 recorded deaths of the coronavirus disease 2019 (COVID-19). It has now spread to 76 territories after it was first identified in Wuhan, Hubei in China on December 31, 2019. The virus spreads from one person to another via respiratory droplets from coughing or sneezing. Symptoms may include fever, cough, diarrhea, muscle pain and shortness of breath. At present, there is still no vaccine or specific antiviral treatment for the virus.

According to the World Health Organization's (WHO) description of pandemic phases, coronavirus is only a step away from being a pandemic. Aside from China, countries like South Korea, Italy, and Iran have now become hotspots for COVID-19. While it remains unclear how far the virus will spread, WHO's Director-General Dr. Tedros Adhanom Ghebreyesus says the virus can still be contained.

Escalating impact on the global supply chain

The Chinese economy thrives as a manufacturing powerhouse. It is no wonder why this country of approximately 1.4 billion people is considered the world’s factory. News circulate about how COVID-19 disrupts worldwide manufacturing operations. Reportedly, manufacturing plants in China have decreased their operations since January. This happens as the country is in the midst of a trade war with the United States. World Economic Forum says China’s economic growth is expected to slow down to 4.5%in the first quarter of 2020.
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The most affected companies are those that rely heavily on Chinese factories for parts and materials. On February 17, Apple announced it expected its quarterly earnings to be lower than expected. The company talks about the drop in demand in Chinese market. Apple also refers to the constrained global supply of iPhones. Some car makers including Nissan, Fiat Chrysler Automobiles N.V., and Hyundai temporarily closed factories outside China as they couldn’t get parts. UN’s International Civil Aviation Organization (ICAO) also forecasts that Japan could lose $1.29 billion of tourism revenue in the first quarter due to the drop in Chinese travelers while Thailand could lose $1.15 billion. European markets have closed for trading. All major indices have lost 3.5% or more amid fears about coronavirus spreading to Europe.

Threats of coronavirus to BPO firms

According to the BPO Services Global Industry Almanac 2013-2022, released in May 2018, the overall BPO services sector generated revenues of $144.9 billion in 2017. That represents a compound annual growth rate of 3.3% between 2013 and 2017. The market is expected to reach $140.3 billion by 2022. India, the Philippines,China, Mexico, and Brazil are some of the significant players in the outsourcing industry. The report also notes that the US is the largest global market for BPO.

In an episode of Outsource Accelerator Podcast with Derek Gallimore, lead consultant for emerging and reemerging infectious diseases at the WHO Weng Capistrano talked about coronavirus and its impact on the BPO industry. There are nearly 1.5 million Filipino workers in the BPO industry. Most of these employees share confined spaces in high-rise office blocks. They work around the clock with shift work and extra shifts in a high-pressure environment. This industry is prone to colds and flu. Thus, the impact is unimaginable if a major outsourcing company would close down in compliance to quarantine measures.

Most likely, businesses will be hit as several workers fall ill around the same time. Since the virus spreads during close contact, clustered workgroups are an easy target. Problems would also arise from mandatory quarantines, travel controls and limits on public gatherings. Absenteeism will also become prevalent. Not only among sick employees but also the healthy ones who will have to take care of sick family members. Similar to China,transportation might also be limited or worse, shut down.