Young workforce, gov't support drive BPO industry's growth

The Philippines continues to be one of the top two countries for business process outsourcing (BPO, or IT-BPO) services, thanks to a young and quick-learning workforce and a supportive government, an industry official said Wednesday.

"If you look around the world, there are only two countries these BPO companies are looking at: India and the Philippines. Once they have India, the Philippines is next," said Information Technology and Business Process Association of the Philippines (IBPAP) senior executive director Gillian Joyce Virata.

"We meet with at least two to three [companies] a week. Interest has remained keen in the past ten years. More and more companies are aware that the Philippines is one of the best places for offshore providers.”

In January, services globalization and investment advisory firm Tholons named Manila the third top BPO city in the world, behind only Bangalore and Mumbai, in its annual ranking of the top 100 global outsourcing destinations.

Tholons also said the Philippines' IT-BPO industry has been exerting to maintain its global leadership in voice BPO services while also expanding into other outsourcing sectors like software development and IT outsourcing, animation and game development, and healthcare information management (HIM) outsourcing.

Dynamic workforce

Virata said the country's main advantage is the workforce, which is service-oriented, quick to learn and easy to train.

"Our main advantage is our people, who are well suited for the work because of their temperament, education, and ability to speak other languages. From the companies we've talked with, they said Filipinos are very hardworking, fast to train and work well with cross-cultures," she said.

John Timothy Hickey, general manager of ADP (Philippines) Inc., said the Filipino workforce is young, service-oriented, and learns fast.

“There are a number of reasons why the Philippines is attractive for us. First is the median age of the Philippines, which is about 22.7 years old, so there's a growing workforce. The country also has an abundant workforce and that's important to us as we grow,” he said.

“The Philippines has a dynamic workforce and Filipinos are known the world over for their impressive work performance and stellar service levels. Philippine associates are very competent and work extremely fast,” he added.

“What I like about their talent is their speed to learn. It's quite difficult to learn payroll and tax fundamentals, to learn human capital management as how we serve in other countries. But Filipinos have a great knack of learning and that has provided us a quicker time to perform,” Hickey said.

ADP (Philippines) is the local arm of American firm Automatic Data Processing, Inc., one of the world’s largest providers of business outsourcing solutions with services including payroll, tax and benefits administration, time and labor management, information technology support and benefits administration for clients.

ADP Philippines currently has more than 1,200 associates and looks at doubling it by end-2014, Hickey said.

Government support

Another advantage the local IT-BPO industry has over the rest is its having the government's full support, even though economists have been saying that the BPO industry is not the solution to job generation in the country.

This is one of the reasons why Dutch financial services company ING has recently established a new back office in the Philippines, ING Bank country manager Consuelo Garcia said.

“ING looked for areas of excellence in operation and cost efficiency. The Philippines is a well-known BPO destination. We evaluated the quality of staff we have, got feedback from other companies and we also met with the government to understand the industry and the growth strategies for it,” she said.

The Manila unit of ING Bank BV has been in the country since 1990, offering a wide range of products such as foreign exchange, derivatives, currency financing, corporate lending, mergers and acquisition, debt capital markets, structured finance, and trade finance transactions.

Garcia said the services of the new back office will include doing loan, settlements processing and data management.

“The Philippine's BPO industry has always been strong. It also has support from government and a pool of people with good qualities,” she said.

Virata said the government has been helping the IT-BPO industry by subsidizing training for applicants through Technical Education and Skills Development Authority (TESDA).

"We have been working with government to have training through TESDA. Some course offered are short courses, business communication, medical transcription, 2D and 3D animation and healthcare coding," she said.

In March, Budget Secretary Florencio Abad on Monday assured business process outsourcing stakeholders that the government will "help the industry" as much as it can, citing contributions of the industry to the economy.

In 2012, the BPO industry's revenues rose 18 percent to $13 billion from $11 million in 2011 while workers also rose 21.8 percent to 780,000 from 640,000 in 2011.

Virata said IBPAP is targeting industry revenues of $16 billion and a workforce of around 900,000 by end-2013 and $25 billion in revenues and a workforce of 1.3 million by end-2016. — BM/HS, GMA News