Friday, 6 March 2009

Philippine outsourcing companies expected to employ more workers amid crisis

BusinessWorld Online

BUSINESS PROCESS outsourcing (BPO) companies expect to employ more workers this year as the slowing global economy forces them to seek alternative and cost-effective ways to provide high-value services, an online survey showed.

Ninety-five percent of 168 industry executives and human resource managers surveyed indicated a positive outlook for job growth this year, with half saying their work force requirement would increase by over 15%.

The survey, done from Feb. 5-22 by Outsource2Philippines, the Business Processing Association of the Philippines (BPA/P) and TeamAsia, also showed that value-added services outsourced to Philippine BPOs were increasing.

Moderate- to very high-value services ranging from financial analysis to knowledge management accounted for 97% of services offered by the companies polled.

More than three-fifths said their organizations provide high- to very high-value services.

Sectors that expected the highest work force increase involved complex services such as backoffice processes, information technology (IT) services and infrastructure management and Web site development. Average demand from these groups is expected to go up by 11%-15% from current staff levels.

BPO companies with 1,000-15,000 employees expect an average increase in staffing requirements of between 6% and 10%, close to the average work force increase expected across all sectors and respondents.

Meanwhile, small- and mid-sized operations expected employment to go up at the same rate.

The biggest growth was expected by companies that employ 5,000 to 10,000 workers, with a third expecting jobs to grow by 11%-15% this year.

"With at least 97% of surveyed companies providing moderate to high-value services, and 95% expecting employment growth, the question for the industry is whether current academic standards and curricula are aligned with the increasingly complex requirements of the BPO industry," BPA/P Executive Director for research Gillian Joyce G. Virata said in a statement.

In a follow-up interview, she said the recent move by US-based call center Accenture to cut jobs did not reflect the employment needs of the sector, pointing out that those laid off were IT personnel.

"Accenture continues to hire for its BPO business... Those released were from their IT department since that company both has BPO and IT operations. The latter, is harder hit by [the slow-down]," she added.

Ms. Virata said their group expected to add 110,000 more jobs this year, higher than the 75,000 it had added to its 370,000-strong work force last year.

She said there is enough talent in the Philippines to fill up demand for high-value services, but the industry must address the perception problem that working for BPOs only involves call center duty.

In an e-mail, Lauro Vives, chief analyst of XMG Global, agreed with the survey, saying "there is still considerable headroom for growth due to untapped talent availability."

Mr. Vives added that services that would remain resilient are customer care, credit and collections and back office processing, both voice and nonvoice.

"Within these growth areas, industries that are forecast to continue to grow is the insurance, health care and banking verticals," he said.

He noted that prospects for subcontracted work from the global banking industry would be mixed since some will freeze expansion plans, while others will expand aggressively.

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