The Outsourcing Week in Review: Thursday, March 30, 2023

Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

So much has happened in the Philippine outsourcing industry this week! Fortunately, we can narrow it down to less than 1K words. Welcome to Inside Outsourcing: Philippine edition!

Small and medium-sized enterprises (SMEs) from Western countries powered the Philippines’ US$32.4 billion outsourcing growth last year. In an interview with One News’ Agenda, Outsource Accelerator (OA) Founder and CEO Derek Gallimore said that the value, quality of service, and 30 years of executive experience in the industry made the Philippines the best outsourcing destination globally. Gallimore also expects around 40 million new jobs to come offshore over the next 10-20 years as SMEs realize the opportunity of offshore staffing.
Meanwhile, Artificial Intelligence (AI) is expected to help improve the Philippine economy by 12% to US$92 billion in 2030. During a forum about AI and ChatGPT, Erika Fille Legara, Chairman of Aboitiz Data Science, Asian Institute Management, said that AI is now a strategic capability that would improve economic activity and make local companies globally competent. However, Legara also reminded Filipinos to upskill, as humans using AI are expected to replace those who do not.

In other news, Business Process Outsourcing (BPO) firm and OA Source Partner Office Partners 360 (OP360) officially launched their second site in Davao City, which can accommodate 1,029 seats. OP360 President Ben Roberts explained that their expansion in Davao is due to the city’s potential for growth in terms of business. Roberts added that their new site shows OP360’s dedication to providing jobs to local communities and serving more clients worldwide. At the same time, newly rebranded Business Process Management (BPM) firm Foundever opened its first-ever Philippine hub in Cebu City. The firm — known formerly as Sitel Group — is looking to hire 2,400 professionals in Cebu in the first half of the year as they implement a hybrid setup. The new hires will fill positions for several industries, including customer service, technical and telecommunications support, healthcare services, and financial and banking services.

India-based outsourcing provider BLS International Services is set to establish offices in Manila and Cebu following its agreement with the Embassy of Poland in Manila. Under the deal, BLS International will provide outsourced visa services to the Polish Embassy and process 20,000 applications annually. Commenting on the partnership, BLS International Joint Managing Director Shikhar Aggarwal said they are excited about this contract as it commences their association with the Polish embassy and addresses the rising number of demands in the travel industry.

Twelve outsourcing firms were included in Great Place to Work’s Best Workplaces in the Philippines for 2023. Out of 30 companies across three categories, outsourcing providers Synchrony Global Services Philippines, Accenture, PSG Global Solutions, Teleperformance Philippines, Genpact, CGI Philippines, and [24]7.ai were named among the large enterprises. Meanwhile, Genesys, Booth and Partners, Connext, Siegen Solutions, and ECo Global Consulting were featured in the medium and small categories. Industry association IT & Business Process Association of the Philippines (IBPAP) was also recognized as it promotes excellent work culture while playing an indispensable role in the country’s IT-BPM sector.

Similarly, IT-BPM company Flatworld Philippines secured its Great Place to Work certification for the second consecutive year. In a Great Place to Work poll, 85% of Flatworld’s employees affirmed the company’s positive work culture, while 92% felt that the firm is a physically safe workplace. Flatworld Philippines Country Head Ajit Sivarajan said that the certification is evidence of the firm’s “exceptional work culture” and shows its strength as an employer of choice in the Philippines.

Outsourcing solutions provider and OA Source Partner Offshore Business Processing (OBP) recently conducted its Synergy workshop for its management team to encourage the growth of its employees. One of the topics covered during the activity was the Lean Six Sigma methodologies — a team-focused managerial approach that helps accelerates the potential for organizations to achieve their goals. According to OBP, they take pride in having a trained, certified Lean Six Sigma management team keen on implementing and observing the methodology in developing and improving our business processes and workflows. It also assures clients that their operations and methods effectively bring value to businesses.

After two years of negative net absorption, office deals in Metro Manila reached 603,800 square meters (sq.m.) in 2022, up 43% from 2021’s figure. Property consulting firm Colliers highlighted the increase in office transactions from the Healthcare Information Management Service (HIMS) sector, reaching 23,000 sq.m. last year in the capital. According to the report, these companies took advantage of “new, high-quality spaces and rental correction,” as average rents in the capital dropped by 37% from 2020 to 2022. Meanwhile, real estate agency Santos Knight Frank (SKF) said that most property investors are looking into Environmental, Social & Governance (ESG) factors in their decision-making process. During a press conference, SKF explained that ESG helps stakeholders understand how an organization manages risks and opportunities related to environmental, social, and governance criteria. Aside from ESG, SKF added that other property investors are keen on green leasing for sustainability.

Speaking of sustainability, eco-friendly companies could look at SM Prime’s newly launched building, FourE-com Center. Pre-Leadership in Energy and Environmental Design (LEED) Gold-certified office offers over 100,000 sq.m. of leasable area spread across three towers of 15 floors each. Alexis Ortiga, SM Prime VP for Commercial Properties Group, said that the construction of the new office building is supported by return-to-office policies, take-up of office spaces driven by e-commerce, BPOs (business process outsourcing), and data centers, and demand for innovative and sustainable office solutions that necessitate growth in the real estate sector.

The Philippines was voted the worst country to begin a startup business in. According to Business Name Generator, the high procedure costs (23.3%) of the gross national income (GNI) per capita and a high business tax rate of 25% pushed the Philippines to the bottom of the list. Additionally, the country’s low quality of life — 81 from a possible 240 — negatively impacts productivity, employee engagement, and job satisfaction. However, QBO Innovation Hub Executive Director Katrina Chan believes the Philippines startup industry is booming. She pointed out that despite its ranking, the Philippines received US$1 billion in tech investment for the second consecutive year. Additionally, the Department of Trade and Industry (DTI) announced a PHP8 billion (US$147 million) Startup Venture Fund (SVF) for Filipino startups. In a statement, the DTI explained that the fund aims to help grow and accelerate the local startup sector. The trade agency reportedly plans to establish a Creative Venture Fund to help local creative enterprises and workers sustain and expand their operations.

World Bank believes that providing more and better job opportunities for young Filipinos could help the Philippines strengthen its economic recovery and long-term growth. According to World Bank’s report, youth employment in the country remained low in 2022 while overall labor market indicators recovered to the pre-pandemic level. Yoonyoung Cho, Senior Economist at the Social Protection and Jobs Global Practice at the World Bank, said that active labor market initiatives — such as skills training, job search assistance, wage subsidies, public works programs, and entrepreneurship promotion — would help the Filipino youth in their job applications.

Other organizations, meanwhile, are pushing for a salary increase. In the Calabarzon region, 12 labor organizations under the Workers Initiative for Wage Increase (WIN4WIN) petitioned to bring the daily minimum wage from around PHP400 (US$7.36) to PHP750 (US$13.79). According to the group, raising the minimum wage would help workers cope with inflation and the rising prices of everyday goods. The Regional Tripartite Wages and Productivity Board for Calabarzon last issued a wage order in June 2022, with the second tranche of that increase implemented last December.

The Philippines and Croatia agreed to strengthen their long-standing partnership by developing new areas of cooperation. During a recent meeting, both delegations advocated for further cooperation in labor, science, technology and innovation, education, tourism, information and communications technology, and the defense and maritime sectors. A memorandum of Understanding (MoU) will also be signed between Croatia’s University of Zagreb and the Philippines’ Far Eastern University (FEU) to mark the 30th anniversary of bilateral relations between the two countries.

Here’s to sourcing stronger relationships!

Thursday, March 30, 2023

NEWS THIS WEEK

29 March 2023

• P8Bn fund now available for PH startups – read article…
• India seeks stronger business ties in Ilocos Norte – read article…
• BLS International to set up offices in Manila, Cebu – read article…
• New SM office building caters to BPOs – read article…

28 March 2023

• Metro Manila office takeup grew by 43% in 2022 – read article…
• Calabarzon workers seek P750 minimum wage – read article…
• Flatworld PH earns 2nd Great Place to Work Certification – read article…
• PH named worst country to launch startups – read article…

27 March 2023

• Foundever opens 1st PH hub, to hire 2.4K workers – read article…
• OP360 opens second Davao site – read article…
• TaskUs launches ‘greener’ PH site – read article…
• Croatia, PH renew bilateral partnership – read article…

24 March 2023

• ESG emerges as a key trend in PH property sector  – read article…
• Ransomware attacks in PH up 57.4% in 2022 – read article…
• AI to boost PH GDP by 12% in 2030 – read article…
• OBP holds Lean Six Sigma training for management team – read article…

23 March 2023

• Outsourcing expert attributes PH’s $32Bn BPO growth to Western SMEs – read article…
• 12 outsourcing firms among PH’s Best Workplaces 2023 – read article…
• PH senator wants permanent ban on POGOs – read article…
• Better jobs for youth could strengthen PH economy — World Bank – read article…

Read more Inside Outsourcing Newsletters here:

1. The Outsourcing Week in Review: March 28, 2023
2. The Outsourcing Week in Review: April 4, 2023