Talent gap could derail growth in Philippines’ IT-BPO

Michael Alan Hamlin

Posted on June 21, 2012

The business process outsourcing (BPO) industry is expected to more than double in both revenues and direct employment in the next five years, according to Benedict Hernandez, president and CEO of the Business Processing Association of the Philippines (BPAP) and a bevy of analysts. The Philippines is the world leader in voice-based services and is overtaking India, the leader in non-voice services, in key segments of that broad, high-value service area as well.

A study commissioned by BPAP, the IT-BPO Road Map 2011-2016, suggests that the BPO industry has demonstrated potential to grow from a $11-billion industry in 2011 to a $25-billion industry by 2016, providing well-paying jobs to 1.3 million Filipinos as well as millions more indirect jobs. But to achieve that target, Hernandez said the industry must address the looming shortfall of hundreds of thousands of people between now and 2016.

(Disclosure: My firm and a subsidiary, Outsource2Philippines, were engaged along with Everest Group to development the Road Map 2011-2016 study.)

In 2011, the industry directly employed 638,000 people. They provide voice, back-office, creative, information technology (IT) and software development, health information management, and other services to companies around the world from BPO hubs in Manila, tier-two, and Next Wave CitiesTM throughout the Philippines. Demand for talent remains high and is increasing, so much so that the capacity of the industry to grow now largely depends on how many employable graduates can be produced.

To address the talent hurdle, BPAP has undertaken a series of ambitious initiatives in cooperation with key government agencies, multilateral institutions, and the private sector to attract potential hires and improve near-hire skills sets so that more Filipino graduates become employable. The association is also reaching out to individuals—including those already gainfully employed in other industries—who may not be aware of the opportunities the industry provides, especially in complex, non-voice services.

“While many Filipinos apply for work in IT-BPO companies, at present the hiring rate is just five percent to 10%. Most applicants do not make the cut because they lack the necessary qualifications, skills, and professional expertise,” according to Benedict. BPAP coordinates government-funded near-hire remedial training as well as certification programs for potential applicants, volunteer teaching, and train-the-trainer orientation and certification to enhance applicant employability.

It also works with the academe to align tertiary curricula with industry requirements. Other initiatives are meant to cast a wider net and compete for people who might not have considered an IT-BPO career in the past.

“We recently launched a series of educational and information initiatives to encourage Filipinos to work in the IT-BPO industry because we found that, in many cases, people are unaware of the opportunities that our industry provides. Over 30% of industry revenues is generated by non-voice, complex services delivered in a continually expanding, broad range of functional areas and industries.

“We like to say that these opportunities allow people to “work abroad” but “live here” in the Philippines,” said Hernandez. “New graduates and established professionals don’t have to go abroad for international, well-paying jobs,” Gillian Virata, BPAP’s senior executive director says. “Our objective is to increase visibility of the industry here, and the opportunities it offers, so that Filipinos know about and how to find these great jobs.”

BPO companies also acknowledge the critical need to retain and provide for the development of individuals already employed by the industry. “It’s easy to see why we consider talent our most important resource, and most important issue,” said Hernandez. “This industry is people.

“That’s one reason we are working with the International Labor Organization and the Department of Labor and Employment’s Occupational Health and Safety Center to develop an integrated approach to providing responsive working conditions and promoting healthy lifestyles among employees. It is important to understand that IT-BPO companies have at least as large a stake in the health and wellness of their employees as any industry,” Hernandez explained.

“It’s obviously in the best interest of individual IT-BPO companies and the IT-BPO industry as a whole to take care of their employees and balance the impact of work-related factors. Our industry is characterized by organizations that strive to provide a comfortable, interesting work environment; opportunities to pursue outside interests; and, personal development initiatives.”

If those efforts fall short, the IT-BPO industry may find itself in the unsettling circumstance of having more jobs than it can fill. That would be tragic for the economy, the industry, and Filipinos who want to “Work Abroad. Live Here.”

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand. Write him at mahamlin@teamasia.com and follow him on TwitterFacebook and LinkedIn. Copyright © 2012 Michael Alan Hamlin. All Rights Reserved.)

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