How to Outsource to Sri Lanka: A Step-by-Step Guide


In today’s competitive business landscape, companies are always looking for ways to reduce costs, improve efficiency, and focus on their core competencies. One strategy that has gained significant traction in recent years is outsourcing. By delegating certain functions to external service providers, businesses can tap into a global pool of talent, access specialized expertise, and achieve significant cost savings.

When it comes to outsourcing destinations, Sri Lanka has emerged as a hidden gem, offering a compelling value proposition for businesses seeking reliable and cost-effective solutions. With its highly skilled workforce, robust infrastructure, and supportive government policies, Sri Lanka has become an attractive choice for companies looking to outsource their business processes.

In this comprehensive guide, we will walk you through the step-by-step process of outsourcing to Sri Lanka. We will explore the benefits and challenges, provide insights into the country’s outsourcing landscape, and offer practical tips to help you navigate the outsourcing journey successfully. Whether you are a small business owner or a corporate executive, this guide will equip you with the knowledge and tools necessary to make informed decisions and leverage the potential of Sri Lanka’s thriving BPO industry.

Understanding the Benefits of Outsourcing to Sri Lanka

Before we delve into the specifics of how to outsource to Sri Lanka, let’s take a closer look at the key benefits that make this island nation an appealing outsourcing destination.

1. Cost-Effectiveness

One of the primary reasons businesses choose to outsource is to reduce costs. Sri Lanka offers a significant cost advantage compared to many other outsourcing destinations. According to the World Bank, labor costs in Sri Lanka are approximately 50% lower than those in India, a country often considered a top outsourcing hub. This cost-effectiveness allows businesses to optimize their budgets without compromising on quality.

2. Skilled and Educated Workforce

Sri Lanka boasts a highly literate and educated workforce, with a literacy rate of 92%. The country places a strong emphasis on education, resulting in a large pool of skilled professionals across various domains. From IT and software development to financial services and customer support, businesses can access a talented and qualified talent pool when outsourcing to Sri Lanka.

3. English Language Proficiency

English is widely spoken in Sri Lanka, and the country has a high level of English language proficiency. This is particularly advantageous for businesses that require seamless communication and collaboration with their outsourcing partners. The ability to communicate effectively in English eliminates language barriers and ensures smooth operations.

4. Time Zone Advantage

Sri Lanka’s time zone (UTC+5:30) is well-suited for businesses in Europe, the Middle East, and parts of Asia. The country’s working hours overlap significantly with these regions, enabling real-time collaboration and faster turnaround times. This time zone advantage enhances productivity and efficiency, allowing businesses to achieve their goals more effectively.

5. Supportive Government Policies

The Sri Lankan government has recognized the importance of the outsourcing industry and has implemented various policies and incentives to support its growth. The Board of Investment (BOI) of Sri Lanka offers attractive incentives for foreign investors, including tax holidays, duty-free imports, and streamlined processes for setting up operations. These supportive policies create a conducive environment for businesses to establish and scale their outsourcing operations in Sri Lanka.

6. Robust Infrastructure

Sri Lanka has made significant investments in developing its IT and telecommunications infrastructure. The country has reliable connectivity, state-of-the-art facilities, and modern technology, providing a solid foundation for seamless outsourcing operations. The government has also established dedicated IT parks and special economic zones to foster the growth of the BPO industry.

7. Cultural Compatibility

Sri Lanka has a rich cultural heritage that blends well with Western business practices. Sri Lankans are known for their strong work ethic, adaptability, and professionalism. They have a keen understanding of Western culture, making it easier for businesses to build rapport and establish effective partnerships. This cultural compatibility facilitates smooth communication and collaboration between outsourcing partners.

Guide to Outsourcing to Sri Lanka

Now that we have explored the benefits of outsourcing to Sri Lanka, let’s dive into the step-by-step process of how to outsource effectively.

How to Outsource to Sri Lanka

Identify Your Outsourcing Needs

The first step in outsourcing to Sri Lanka is to clearly define your business requirements. Take time to assess which tasks or processes are suitable for outsourcing. Consider factors such as the complexity of the tasks, the skills and expertise required, and the potential impact on your core business operations. This exercise will help you determine the scope of your outsourcing initiative and ensure that you are targeting the right functions for delegation.

Set Clear Outsourcing Objectives

Once you have identified your outsourcing needs, it’s crucial to establish clear objectives for your outsourcing initiative. Define specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with your overall business strategy. These objectives will serve as a roadmap for your outsourcing journey and help you track progress, measure success, and make informed decisions along the way.

Research the Sri Lankan Outsourcing Landscape

Before selecting an outsourcing partner in Sri Lanka, conduct thorough research on the country’s outsourcing landscape. Explore industry reports, attend relevant events, and consult with experienced professionals to gain insights into market trends, key players, and best practices. This research will help you understand the capabilities and strengths of different service providers and make an informed decision when choosing your outsourcing partner.

Evaluate Potential Outsourcing Partners

Based on your research, shortlist potential outsourcing partners in Sri Lanka that align with your requirements and objectives. Assess their reputation, experience, capabilities, and cultural fit. Look for providers with a proven track record of delivering high-quality services and a commitment to data security and compliance. Request proposals, conduct interviews, and engage in detailed discussions to evaluate their suitability for your outsourcing needs.

Establish a Clear Service Level Agreement (SLA)

Once you have selected your outsourcing partner, it’s essential to establish a clear and comprehensive Service Level Agreement (SLA). The SLA should define the scope of services, performance metrics, delivery timelines, communication protocols, and any other relevant terms and conditions. Engage in open and transparent negotiations with your outsourcing partner to ensure that the SLA aligns with your expectations and protects your interests.

Implement Effective Communication and Collaboration

Effective communication and collaboration are key to the success of any outsourcing relationship. Invest in robust communication tools and technologies that facilitate seamless interaction between your in-house team and the outsourced staff in Sri Lanka. Regular video conferences, instant messaging platforms, and project management tools can help bridge the geographical gap and ensure transparency and accountability.

Provide Comprehensive Training and Support

To ensure a smooth transition and optimal performance, provide comprehensive training and support to your outsourcing partner. Share your company’s culture, values, and expectations to help them understand your business context. Provide necessary training on your products, services, and processes to enable them to deliver high-quality results. Continuously engage with your outsourcing partner and offer ongoing support to foster a strong and productive working relationship.

Monitor Performance and Maintain Quality

Establish clear key performance indicators (KPIs) and regularly monitor the performance of your outsourcing partner against these metrics. Implement quality assurance measures and conduct periodic reviews to ensure that the outsourced team is meeting your expectations and delivering consistent quality. Provide constructive feedback and work collaboratively with your partner to address any issues or challenges that arise.

Foster a Long-Term Partnership

Approach your outsourcing relationship with a long-term perspective. Treat your outsourcing partner as an extension of your own team and invest in building a strong and mutually beneficial partnership. Encourage open communication, foster trust and transparency, and work towards shared goals. By nurturing a long-term partnership, you can unlock the full potential of outsourcing and achieve sustainable business growth.


Outsourcing to Sri Lanka offers businesses a strategic opportunity to optimize costs, access skilled talent, and focus on core competencies. By following the step-by-step guide and leveraging Sri Lanka’s highly educated workforce, cost-effectiveness, supportive government policies, and robust infrastructure, companies can achieve successful outsourcing outcomes. As the global business landscape evolves, partnering with Sri Lanka’s thriving outsourcing industry can provide a competitive edge and drive growth. Embrace the potential of outsourcing to Sri Lanka and embark on a transformative journey towards achieving your business goals.


Labor Costs in Sri Lanka

SMART criteria

Service-level agreement

Sri Lanka Standard Time

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Business process outsourcing