The Outsourcing Week in Review: Wednesday, July 15, 2020

Welcome to Inside Outsourcing: The Outsourcing Week in Review

THE WEEK IN REVIEW

Nearshore Americas – a nearshoring publication – recently published an article criticising the Philippine BPO industry’s response to COVID.  The title, ”The Philippines BPO Meltdown: What Went Wrong?”, started off the negativity and it went downhill from there. It reported that work-from-home (WFH) arrangements were not working and that internet connectivity and data security issues were undermining any adjustments. It highlighted traffic, transport and accommodation issues for BPO staff, and raised concerns for workforce welfare. It also noted the new anti-terrorism bill and claimed that the country’s “erratic governance” has created a tense climate that “does little to instil certainty in clients”.

Outsource Accelerator is now organizing a podcast interview with the publication’s head to seek clarification and comment – stay tuned…

Luckily, the reality is far from complete doom and gloom.

In mounting government concern for BPO worker’s rights, the House Committee on Labor and Employment directed its Labor Standards Subpanel to consolidate the five measures seeking to provide protection for the workers. DIWA party-list Rep. Michael Edgar Aglipay said that “it is about time for the House to act on the measures that would protect the rights and promote the welfare of the 1.3 million BPO employees”. The same Subpanel has told Sutherland Global Services, a top-tier BPO, that it has kept its employees “in the dark” about their employment status whilst furloughed, and has urged them to pay separation benefits to workers who have opted to resign.

To create a safer working environment for BPO employees in the office, Information Technology and Business Process Association of the Philippines (IBPAP) President and CEO Rey Untal said that companies are taking “extraordinary measures” to balance workers’ welfare and their ability to operate. Untal said that internet connection quality and data protection needs will influence when outsourcing firms fully return to on-site work. He said that as long as workforces remain productive in the WFH arrangement, the transition back to on-site work could be measured in months instead of weeks.

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Despite the pandemic’s brutal impact, the BPO industry is still forecasting a “silver lining” from all this. Teleperformance Philippines COO Mike Lytle painted a positive future suggesting that the COVID-induced recession will force companies to look to save costs across their operations.  He said that Teleperformance –  the country’s second-largest BPO employing 47,000 staff across 21 sites – “is running at about 66 percent of our normal levels”, but remained bullish about the future saying that the Philippines’ strong outsourcing industry will attract a lot of new inquiries as costs become a focus.  This is consistent with Outsource Accelerator’s opinion of a strong countercyclical period of growth for the industry – as Derek Gallimore explained in his recent ANC interview.

Meanwhile, the Healthcare Information Management Association of the Philippines (HIMAP) is already reporting positive signs as demand for Healthcare Information Management Services (HIMS) are on the up. Some BPOs are already expanding with one adding an additional 4,000 jobs by September. HIMAP President Rogelio Salazar Jr. said that as recessions all over the world force companies to move their jobs offshore, the Philippines has the opportunity to acquire a good number of these jobs.

These sentiments are supported by a recent study conducted by Opinium and LiveArea. The research revealed that a third of UK businesses (28%) are looking to outsourcing “as a COVID-19 survival strategy”.

Additionally, the Philippine Economic Zone Authority (PEZA) is supporting this growth as the board is set to approve 27 new projects with a total cost of P2 billion and projected employment of 3,694, according to PEZA chief Charito Plaza.

In economic news, the Philippine Peso is emerging as Asia’s most stable currency, and the Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno has assured markets that the country still has “lots of bullets” to fire if needed to support the economy in its fight against the pandemic.

In more good news for Navegar, they have just announced the final close of its second fund, Navegar II, with $197 million in total capital commitments. Navegar recently made outsourcing industry news as they led a $20 million Series B funding for Australian Pampanga-based BPO Cloudstaff Modern Workforce. Listen to OA’s recent Cloudstaff podcast interview here.

Overseas, Indian IT giant Tata Consultancy Services’ (TCS) CEO Rajesh Gopinathan expressed his concerns with Donald Trump’s latest presidential move – which will suspend the entry of foreign nationals with H-1B, L, H-2B and J temporary visas until at least December 31, 2020. Gopinathan said that this decision will badly hit US firms “as it will prevent intra-company transfers by Indians who are working for American banks, automobile companies, and pharmaceutical firms.”

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The CEO of TCS, which employs over 450,000 people, didn’t hold back, saying “the ignorance around this ruling should be addressed. Playing with the status of people who’ve moved away from families and committed to spending five to six years in a foreign country without immigrant status to deliver value to customers, is a short-term gimmick.”

Reports of the extent of the pandemic’s impact on Indian’s outsourcing industry are starting to emerge.  Official sources are suggesting that COVID has caused 30,000 job losses and 60,000 furloughed workers – however, we would think that those numbers might be somewhat higher.

 

Wednesday, July 15, 2020

NEWS THIS WEEK

 

14 July 2020

  • PH still has “lots of bullets to fire” to support the economy, says BSP – read article…
  • COVID-19 pandemic caused 30,000 job losses in India’s IT-BPO industry – read article…
  • PH BPO sector struggling amid COVID-19 – read article…

13 July 2020

10 July 2020

  • Philippine peso emerges as the most stable currency in Asia – read article…
  • Entrepreneurs advised to speed up digital transformation to hasten recovery – read article…
  • PEZA fair to provide 100,000 job opportunities to displaced workers – read article…
  • Businesses turn to outsourcing as a COVID-19 survival strategy – read article…

9 July 2020

  • House panel tells BPO company to pay separation benefits for workers who resigned during pandemic – read article…
  • BPO workers’ office return to be determined by internet quality and productivity – read article…
  • Navegar exceeds target, closes second fund at $197m – read article…
  • PEZA fears foreign firms’ exodus due to global recession – read article…

8 July 2020

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