ExcelAsia: Addressing a threat
Michael Alan Hamlin
Posted on June 25, 2008
And recognizing opportunity…
Philippine business faces a number of threats and hurdles to development. Consider the semiconductor industry, which with electronics accounts for about two thirds of all Philippine exports. The semiconductor and electronics industries are struggling to address: 1) High energy costs; 2) High labor costs relative to countries competing for investment, such as Vietnam; and, 3) Prospects for reduced investment incentives, limiting expansion options.
The leisure and business tourism industry suffers from poor infrastructure, limited hotel and convention capacity, and a negative image as well as recent increases in the cost of traveling associated with the dramatic rise in energy costs. And as I discussed last week, the business process outsourcing (BPO) industry is threatened by an inadequate supply of qualified applicants to man contact centers, shared services facilities, and software development laboratories.
Perhaps the most frightening aspect of these threats is their strategic nature. Addressing them is not a matter of simply deciding to do so, like raising or lowering interest rates. As we have seen so clearly in recent weeks, the Philippines’ energy challenge is one that will take decades of investment and enlightened public policy development and implementation to address.
This is also true for tourism. Although the industry is seeing investment and development in this century that eluded the Philippines for most of the last one, it will take a quarter of a century – at least – for the Philippines to fund and build the roads, airports, and ports it requires to fully leverage the potential tourism promises and that neighboring nations have leveraged for at least that long.
In 2006, the Philippines spent a little more than P1,000 per capita on education. According to the Asian Development Bank, participation in elementary school dropped from 97 percent to 84 percent from 2000 to 2006, and investment in education as a percentage of gross domestic product fell from four percent in 1998 to 2.4 percent in 2005. Yet the relationship between education and growth in GDP is clear: If the Philippines doesn’t invest more in education, the majority of its people will remain poor.
Those statistics are sobering. And while they represent a warning often sounded, they also represent an opportunity. I recently met up with a young woman who recognized that opportunity, and acted on it by founding a human resource training and development company she calls ExcelAsia. Rita Trillo-Ugarte, along with her sister, Annie Trillo and other friends and family, set up the company together. Trillo-Ugarte is the president, and Annie plays an important operational role. The company has trained about 16,000 job seekers for the BPO industry since 2005. (Full Disclosure: ExcelAsia recently became a client of my firm.)
In 2006, the administration of President Gloria Macapagal-Arroyo – with the encouragement of the BPO industry – set up The Training for Work Scholarship Program, expanding ExcelAsia’s market. The program provides funding for special training courses for contact center applicants employers believe will be employable following intense, practical English-language training. The industry calls them “near hires.”
Funds are provided through the Technical Education and Skills Development Authority (TESDA), and administered by the Business Processing Association of the Philippines (BPA/P). BPA/P certifies training institutions qualified to deliver the remedial courses. As of the middle of this month, ExcelAsia had trained about 14 percent of the 37,000 near hires that have gone through the program, or about 5,000 applicants.
Up to 50 percent of all job seekers who train with ExcelAsia at the request of potential employers are hired. The hiring rate for the industry averages about five percent according to a Outsource2Philippines survey conducted with BPA/P late last year. Trillo-Ugarte says hiring rates for her clients are up across the board, averaging at a minimum 15-25 percent.
As a result of that track record, demand for ExcelAsia training services has increased significantly. The company is working fast to open new offices around the country, and is expanding its existing training facilities in Manila and Cebu. With four new sites in Alabang in suburban Metro Manila, Baguio, Iloilo and Bacolod, Trillo-Ugarte expects to be training up to 1,000 near hires and other job applicants a month.
There are a number of keys to Trillo-Urgarte’s success. First, she designed the Excel Asia curriculum – consisting of two major study areas: English and Communication Skills and Customer Service Training – herself. Second, she has an intimate understanding of the industry, having worked in the industry herself. Third, Trillo-Ugarte recruited extremely smart, motivated people who believe training near-hires is a mission.
Fourth, she set high goals and expectations for her business, including those exceptional hiring rates. And fifth, she recognized opportunity. Clearly, the Philippines and the thousands of people ExcelAsia trains are benefiting from her insight and determination. And as those earlier, sobering statistics show, the Philippines needs more Filipinos to follow her example.