The Outsourcing Week in Review: Wednesday, July 22, 2020

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THE WEEK IN REVIEW

Could COVID’s ‘great reset’ create new leaders in the global race for dominance in the BPO industry? According to Philstar’s Rey Gamboa, the industry’s performance is being monitored and bets are being taken on which outsourcing countries can emerge stronger from the crisis. The Philippines’ bumpy adjustment to the Work-From-Home (WFH) might have allowed close competitors in India and Latin America (Argentina, Brazil, and Costa Rica) to sneak ahead. While the Philippines has far superior English proficiency and cultural alignment, rising competitors are better about to provide the necessary internet and digital infrastructure.

In its effort to promote digital transformation and to keep up with the competitors, the Department of Information and Communications Technology (DICT) is seeking Congressional approval of its P46.6-billion budget for fiscal year 2021 to fund programs for digital transformation in the new normal. According to the DICT, the biggest chunk of its proposed budget will go to its Digital Connectivity and Access Programs, particularly the National Broadband Program (NBP), the Free WiFi for All in Public Places and State Universities and Colleges Program, and the Government Emergency Communications System. In line with this, the IT and Business Process Association of the Philippines (IBPAP) is proposing a nationwide upskilling program that will provide learning tools for 1 million workers over a five-year duration. With this initiative, IBPAP is hoping that 73% of full-time IT-BPM workers will be working in mid- to high-level jobs by 2022.

To help the country recover from the economic effects of the pandemic, the Philippine Economic Zone Authority (PEZA) recently approved ten new economic zones for establishment in hopes of luring new investors and locators. In a statement, PEZA said that the bulk of the new tax-free areas will be located in Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon Province) and Central Luzon. However, the agency is setting a “realistic investment target” this year with projections of securing only half of the P117.5 billion-worth of investment deals it approved last year. To counter this, PEZA director-general Charito Plaza said that the agency is partnering with different foreign chambers in Japan, China, Europe, and the United States for virtual conferences. PEZA is marketing the Philippines as an economic destination of choice for foreign backers and has started with luring Qatari investors early this month.

It seems like the fight against furloughing of staff (aka “floating status”) is far from over. Business Process Outsourcing (BPO) workers are seeking to put a stop to this practice, with local union BPO Industry Employees Network (BIEN) saying that this is among their workplace safety and security demands during the COVID-19 pandemic. BIEN has the support of Philippine Senator Leila De Lima, who has filed Senate Resolution No. 462, urging the Senate to probe the status of BPO employees allegedly placed on floating status.

In a statement, De Lima said, “The designation of floating status to employees is a labor practice where employers capitalize on legal loopholes in order to protect assets and capital investments and clear them from any financial obligations they may have to their employees for extended periods of time.”

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The House of Representatives has called on Health Secretary Francisco Duque III to launch mass testing for COVID-19 in efforts to resuscitate the country’s battered economy and get people back to work. However, in Clark’s business district in Pampanga, a reported 65% of the total employees, across BPO, manufacturing, and leisure industries, have already returned to work despite the pandemic. Vince Dizon, president and chief executive officer of Clark’s Bases Conversion and Development Authority (BCDA), said that they can no longer stay in the prolonged lockdown “because the economy is reeling from the effects not only of COVID-19 but of the lockdown.”

Iloilo District 1 Congresswoman and Project ARK-PCR Private Sector Chief Implementer Janette L. Garin shared the sentiment, saying that companies and employees “can exist with COVID-19,” as long as there’s more testing along with mindful adherence to hygiene practices.

It seems that government and industry are beginning to favor returning to work to salvage the economy, over sheltering in place. Is this the right move? What are your thoughts?

Overseas, Accenture’s decision to cut down 900 jobs from its UK workforce could be a sign of what’s to come for the IT sector. Specialist IT outsourcing lawyer Mark Lewis said business levels are down as projects are put on hold. “Times like these force companies to take a much longer, harder look at staffing levels, required skills bases, and the like.  And this is an unprecedented time, so I think that companies are taking the chance now to consider questions they haven’t had the time, inclination or opportunity to do,” Lewis said.

For India, the rating agency ICRA has projected a contraction of the for the country’s IT sector expecting negative growth of up to -3 per cent for the 2021 financial year, as compared to an earlier forecast of 6-8 per cent growth. Despite the gloom, India’s IT-BPM giant Wipro has agreed to acquire Brazil-based IT consulting and services firm IVIA Servicos de Informatica for $22.4 million. IVIA has been providing IT solutions, including system development, maintenance, consulting and project management services to clients in Brazil for 24 years.

 

Wednesday, July 15, 2020

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NEWS THIS WEEK

 

21 July 2020

20 July 2020

17 July 2020

  • PH central bank ‘open to coordination’ on Wirecard probe read article…
  • Only half of surveyed firms plan to continue WFH after quarantine – read article…
  • Accenture’s UK job cuts to affect the IT services industry – read article…
  • Central Luzon reopens economy amid pandemic – read article…

16 July 2020

15 July 2020

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