The Outsourcing Week in Review: Thursday, December 1, 2022

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Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

The Philippine outsourcing industry is evolving. An outsourcing-friendly president, and new leadership of CCAP, IBPAP may breathe new life into the sector. Regardless, Inside Outsourcing, has got it covered.

One million jobs and $60 billion in revenue are expected to be generated by the Philippine Information Technology and Business Process Management (IT-BPM) industry by 2028. During a public briefing, IT and Business Process Association of the Philippines (IBPAP) Chief of Policy and Regulatory Affairs Celeste Ilagan said that they are looking to double the sector’s annual revenues and create more jobs during the six-year term of President Ferdinand Marcos Jr. IBPAP added that they are expecting a 10% revenue increase and an 8.5% growth in full-time employees (FTEs) annually for the next six years.

Meanwhile, 2022 may end “on a high note” as the IT-BPM sector is projected to bring nearly $32 billion in revenue by the end of December. IBPAP President Jack Madrid said that this sum would surpass the industry’s eight per cent contribution to the country’s Gross Domestic Product (GDP). The industry is expected to close the year with 1.56 million IT-BPM employees. To add more “employable talent” in the sector, Madrid stated that they are working with their government partners — namely, the Department of Education (DepEd), Commission on Higher Education (CHED), and Technical Education and Skills Development Authority (TESDA) — to help upskill the Filipino workforce. Madrid’s statement echoes the views of Ilagan on ensuring that graduating students have the skills needed to land job roles within the local outsourcing sector. In a separate TV interview, the regulatory affairs officer said that the country gains higher trust from foreign clients through a more digitally-skilled workforce. Ilagan also reiterated that DepEd and CHED must step up and give the students the skills they need to enter the BPO workforce.

Maintaining a hybrid work arrangement would also boost the local IT-BPO scene. Aside from opening more employment opportunities for Filipinos, IBPAP’s Ilagan emphasized that a hybrid setup will allow companies to continue recruiting employees in Metro Manila and the countryside. The IBPAP official added that improving internet connectivity and infrastructure in the country is also vital in the development of the industry as it allows flexibility no matter where outsourcing employees live.

The Contact Center Association of the Philippines (CCAP) is urging IT-BPM companies to focus on customer experience management to create over a million new jobs by 2028. During her keynote presentation at the Payoneer Outsourcing Forum 2022, CCAP Managing Director Rosario Cajucom-Bradbury stated that the Philippines is the “gold label” of customer experience management. However, the country still needs to work on the marketing and brand position of its IT-BPM sector. Bradbury added that customer experience is “the heart of the Philippines,” and now is the perfect time to work on it. A study by the Everest Group projects that the IT-BPM services industry’s contribution to the local GDP will grow from 7.5% to 8.9% in 2028, overtaking Overseas Filipino Workers (OFW) remittances as the Philippines’ biggest source of foreign exchange.

Aside from revenues and employment, City Council’s Committee on Trade and Commerce Councilor George Goking believes that BPOs could help usher recovery in Cagayan de Oro’s property sector. During a briefing, Goking said that BPOs would bolster the demand for more office spaces as the economy gradually opens. Investment decisions from BPO firms could also be affected by the implementation of hybrid work and the availability of IT parks and buildings registered under the Philippine Economic Zone Authority (PEZA). Moreover, the city official is confident that tax incentives “will serve as a guide for the private sector on the potential investment priority areas in the city and the region.”

Speaking of investments, United States (US)-headquartered BPO firm Clark Staff acquired a five-story office building in the central business district of Bacolod City, Negros Occidental. In a press release, the firm said its new facility in the Philippines would ensure that services remain “constant and resilient” for current and prospective clients. Clark Staff added that Bacolod’s popularity as a business and talent hub makes it “one of the best up-and-coming places” in the country to open its newest location. At the same time, the Board of Investments (BOI) approved Optum’s P143.4 million (US$2.52 million) expansion in Cebu. The BOI revealed that the registration is for the firm’s new BPO segment that will provide IT-related services, including coding, testing, maintenance, and help desk troubleshooting support. Department of Trade and Industry (DTI) Undersecretary and BOI Managing Head Ceferino Rodolfo said that the approval of this project proves that the government is “persistent” in its efforts to enhance the growth of the country’s IT-BPM industry, mainly the healthcare information management services (HIMS) sector.

BPO firm and Outsource Accelerator Source Partner Origo recently crossed its 300th employee mark in its Philippine office. In a panel discussion at the Payoneer Outsourcing Forum 2022, Origo CEO Yassin Shaar attributed this milestone to the shift in labor and employment practices ushered in by the pandemic. The company leader added that more companies saw the value proposition offered by the outsourcing industry during the past two years as it provides reasonable staffing costs while delivering more productivity compared to their on-shore counterparts. “We just crossed our 300-employee mark yesterday. It is quite an honor,” Shaar noted. Meanwhile, Knowledge Process Outsourcing (KPO) provider Outsource-Philippines unveiled its redesigned logo and branding in line with its efforts to update its service offerings. The industry pioneer which is in the process of creating a holding company said that its revamped branding signifies its resolve to keep up with the industry’s new trends. Outsource-Philippines President Celina Mercado said in a press release this is inline with their commitment to cater to the diverse needs of their customers around the world. 

In other news, PEZA endorsed the transfer of 163 IT-BPM projects valued at P13.9 billion (US$244 million) to BOI. In a statement, the ecozone authority relayed that the investment bureau is currently processing 55 projects that have already paid the administrative fee. This transfer is in line with the Fiscal Incentives Review Board (FIRB)’s Resolution 026-22, which allows IT-BPM firms to continue adopting a 100% work-from-home arrangement by transferring their registration from the ecozone authority to the investment bureau. However, to prevent further transfers in the future, PEZA is looking to amend its policies to create a better incentives system and create an institutionalized WFH policy for its members. During the agency’s recognition day for investors, PEZA OIC and Deputy Director General for Policy and Planning Tereso Panga said that PEZA’s 27-year-old law needs to be modified to put their agency on equal footing with the BOI. Panga added that they are also pushing for rationalization in the process of the designation of ecozones as they currently lack the independence to make independent decisions on the matter. Nevertheless, Panga assured their IT-BPM members that they would fully support their member companies that would transfer to BOI.

PEZA’s reevaluation of its laws is timely as the Philippines produces the most remote work opportunities in the Asia Pacific (APAC). According to a study by digital marketing firm Hire Digital, 61% of remote job openings across job sites LinkedIn, Glassdoor, and Indeed are based in the country. At the same time, the study revealed that the Philippines is among the APAC nations that are the “most well-adapted” to hybrid and remote work setups. 

The Philippines has great potential to become the next global hub in the ICT industry due to the abundance of young technology enthusiasts across the country, said tech organization Google Developer Group (GDG) Davao. During a Filipino developers event at Mapua Malayan Colleges Mindanao, GDG Davao co-Community Lead Liezlle Wong noted that the country can soar in the ICT sector as it “is one of the top sources of IT talents all over the world.” When asked about present education gaps in the tech industry, GDG Davao co-community leader Kyle Naranjo resonated with IBPAP’s demand to enhance digital skills education in the Philippines. “There is a big gap between what you can learn through formal education and what you can learn as part of the workforce. I hope this will be addressed so that after graduating college, students are more equipped to be part of the workplace,” he added.

Good news! Most industries in the Philippines will likely return to their pre-pandemic levels by the end of 2022. According to the Management Association of the Philippines (MAP), the sectors are now benefiting from economic recovery and eased mobility restrictions across the country. MAP President Rogelio Singson added that the overall outlook for the economy is positive. The organization also revealed that they offered several recommendations to the government that will enable further economic recovery after the COVID-19 pandemic — including creating industry roadmaps in critical industries and pressing for a better investment climate in the country.

Yes! We are back, baby!

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Thursday, December 1, 2022

NEWS THIS WEEK

 

30 November 2022

29 November 2022

  • PH industries back to pre-pandemic levels by year-end, says MAP – read article…
  • PH has ‘great potential’ to be next global ICT hub, says tech group – read article…
  • DTI Secretary lauds investor contributions to PH economy – read article…
  • PH economy projected to grow by 7.4% in 2022 – read article…

28 November 2022

  • PH Senator vows employment for 23K POGO employees  – read article…
  • PEZA to amend policies for better incentives, institutionalized WFH  – read article…
  • Origo BPO crosses 300th employee mark, pandemic a major growth driver  – read article…
  • CCAP tells IT-BPM firms to highlight PH’s ‘gold label’ customer experience management  – read article…

25 November 2022

  • Hybrid work will create more jobs in PH’s IT-BPM sector, says IBPAP official – read article…
  • Outsource-Philippines pushes rebrand with new logo, updated service offerings – read article…
  • PH Gov’t should focus on digital skills development — IBPAP – read article…
  • OFWs falsely recruited as call center agents sent to work as scammers in Myanmar  – read article…

 24  November 2022

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About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.