Derek Gallimore and Arnold San Miguel dive into the difference of captive and non-captive sites within the Outsourcing Industry.
What really drives people to apply for such companies? and an insight to the list of reasons that usually motivates a Filipino employee. Arnold has been in the industry for over 9 years. Giving him knowledge and experience in the BPO industry. He will share with us his insights and knowledge about the BPO industry.
- Big BPO companies are often perceived as stable, well-funded and have the capital to operate for a long time.
- Smaller BPO companies especially the newer ones have the tendency to be associated with the term “fly by night companies”. However, nowadays, all you need is to do your research well to lower the chance of being employed by such companies.
- For big BPO companies, everything is mapped out, there are operation manuals, training, clear KPIs. They have quality assurance, coaches to guide employees, HR departments, and trainers.
- Big BPOs plan ahead of time and they have backups so that work interruptions are lessened. Unlike small BPOS where they might only have one site, one office, if something happens that impacts their business operations, the owner might take the hit.
- Big captive companies like Chevron and a big BPO company like Accenture both offer job security and structure, whereas small BPO and a small captive companies offer the exact opposite. What they offer though is dynamism and excitement.
- Five popular motivations for a Filipino employee are salary, location, job fit, career growth and workplace environment.
- The Philippines is well known for their summer outings and team buildings which, as what Arnold says, team camaraderie is a big indicator of how well a team is going to perform.
- Location is very important to most Filipino workers and working in a different time zone gives them the advantage of avoiding traffic.
- The good thing about working for a BPO company is that employees follow the time zone of the country they serve which is usually outside the “rush hour” traffic time frame.
- Filipino workforce considers the following things when applying for work; salary, location, job fit, career growth and workplace environment.
- While big companies offer stability and structure, smaller or startup companies offer a fresh environment, excitement, and dynamism which could attract highly talented individuals.
- Outsourcing your business to the Philippines gives them the opportunity to work at an uncommon schedule that avoids traffic which makes it easier for people to travel.
Derek: Hi, and welcome to the second episode of the Outsource Accelerator Podcast. My name is Derek Gallimore and we are joined by Arnold San Miguel today.
Today, we talk about big versus small BPOs, and also captives and non-captives. If you are not familiar with this terminology then stay tuned today, it’s a quick episode and a punchy episode and we wanna keep our information reach. So, without further ado, here is our chat between Arnold and myself. Enjoy!
Derek: Arnold, now, the topic I wanna cover today is big BPO versus small BPO, the differences there, and also captive versus non captives.
For those who don’t know the difference between captive and non-captive, captive is If you have ‘Joe Blogs Pizza’ in the states and he sets up a company over in the Philippines to hire staff directly, versus ‘Joe Blogs Pizza’ in the states, going through BPO who have been providing staffing solution. So, there’s a subtle difference but possibly a significant one. Let’s start first on the big versus the small BPO.
Now, Arnold you have had experience of in working with BPOs and working in the Philippines generally. And BPOs, I mean, you might be able to tell us but some have sort of ten thousand seats plus and they are just massive organizations managing people, basically, versus the small startup BPO where they are trying to offer services to people that might have fifty seats or ten seats or even less. What is your experience? What are your opinion on the pros and cons of either?
Arnold: Yeah. It’s actually interesting because I did get a chance to work with a big BPO and a small company and I have been working for the past nine years.
So, for the big BPOs, the good thing there is its stable. The reason why they outsource to the Philippines and build everything from the ground up, is they have the funding, they have the capital. So, we know for a fact that if you go into this company and you make a good effort in working then there is no reason for you to be fired or for you to look for another job.
Unlike in the small BPO especially the newer ones that are recently established, people have the tendency to associate this with “fly by night” type of companies which is, again, a bit of a risk. But nowadays, if you do your research well, I don’t think you are gonna get to that point, so even if we just consider it as a small BPO, it doesn’t necessarily mean it’s a risky venture for you.
Derek: In the Philippines, I mean the big BPOs, they have the processes down path and they are the process engineering experts because, ultimately, BPO stands for Business Process Outsourcing. So, the big BPOs, they cut out a process out of a big organization, they move it over to somewhere like the Philippines which is lower cost base and they just really concentrate on optimizing this process.
So, is it true for the worker then, it means everything is mapped out, there’s operations manuals, there’s process manuals, there is training and there is a heavy reliance on very clear KPIs, which is Key Performance Indicators. Is that true? And then the upside to that is, you know exactly what you are doing but then you are more of a worker and for ones of a better word. Whereas the smaller BPOs, everything is a little bit more chaotic; is that fair?
Arnold: Yeah. That’s a fair assumption but I would say that for big BPOs people normally assume that if I go into this company everything is laid out for me, it’s just a matter of me catching up with what needs to be done in regards to the process, and they rarely make changes, even if they do, it doesn’t get implemented right away. But the benefit there is, you know they have an entire department to train you, so from trainers one by one.
They have a quality assurance, they have coaches to guide you through out your work week, so it’s very structured in terms of, you know, even for escalation, and it’s very structured. So, that’s a benefit that I give to the big BPO as compared to the small BPOs as to what you mentioned earlier.
Derek: Which is an interesting point actually, for the listeners if they are looking for a BPO, then the bigger ones, the more established ones, the more sophisticated ones, they are gonna cost a lot more but it’s because they have an entire departments of trainers, they have entire HR departments, they have many years or decades of sophistication in terms of building these processes; would you agree with that?
Arnold: Yeah, I think it’s simple to say that for big BPO, they have backups of backups, so that there is no downtime for the work that they do for you. Unlike for small BPOS wherein they might only have one site, one office to work with, if something happens that is not good for the business or for the operations, you might take the hit as the owner.
Derek: it’s a really good point, isn’t it? The bigger BPOs, they really do specialize in having failsafe’s and having backup processes, and backup facilities; don’t they?
Arnold: I remember, we have meetings every year and we discuss backup plans, what we need to do if, let’s say level 10 hurricane comes along the way, it might not happen or the chances of it happening are very slim but we need to make a document that outlines what we are going to do if that happens.
Derek: Interesting. The typhoons are a bit of a shocker for the Philippines.
So, we wanna move on to the captive versus non captive, and as I explained before difference is subtle yet tangible, you have worked in both sides of the coins, can you, maybe explain, I suppose briefly, your experience but also what the general perception is by the general employment population about either.
Arnold: Yeah. I think for us or most people who are applying for a job, they don’t really look at the difference between a captive site versus a BPO site. What they look for is, you know, the company mission and value, how big they are, how big their company is and their compensation.
In that sense, there might be a few out there that already has a certain company in mind that they wanna work with and that’s good, for example, big companies like Shell or Petron or chevron, some of them are captive sites. But I think they are mainly applying because of the company itself not because of they are a captive or a BPO site.
Derek: Alright. So, a big captive like chevron versus a big BPO like Accenture, they both offer you good job security and good structure, whereas, a small BPO and a small captive, they offer exactly the opposite but maybe a little bit more dynamism and excitement but less security.
Arnold: Yes, perfect.
Derek: So, drawing on that line of thought then what does motivate a Filipino worker? Is it standard to the West? Is it sort of money? Is it a range of things? Does it depend on the person?
Arnold: Well, for me personally it has to be a mix of five things, first of is salary, how well people are compensated. If the location is very near or very reachable? The third one is job fit, you know, if I took up accounting I would assume that the next job I get relates to numbers at the very least.
The fourth one would be career growth, I wouldn’t want to spend 10 years of my life being an entry level staff. The fifth one which is the workplace environment, of course, I still have to wait a couple of years to be promoted, but during those first few years when I need to make the effort of working, the least I should get in exchange is a very nice office to work in or an environment that would support me and my needs.
Derek: And how important are colleagues, because the Philippines is well known for their summer retreats and their team building whatever, getaways or exercises; how important is the work-colleague unit to the workers?
Arnold: I think team camaraderie is a very big indicator of how well your team is gonna perform, I think that speaks for all team based companies. But the key thing here in the BPO sector is that we have to Keep in mind that these people are gonna be friends eventually, so, it is a big deal for them to be able to spend time outside the office, to relax a bit, to try and get to know each other so that when an issue arises, like someone going on leave for a couple of days or delaying a project if it’s a one-time project.
Then, they will be able to help each other out without pointing fingers as to why it’s gonna be delayed or why there is gonna be like a disruption in the service.
Derek: Cool. And just hijacking one of the other points there, you mentioned convenience to the office. Talk to me about the Manila traffic situation, its infamous to put it best.
Arnold: Yeah, I think we are at the top five, which is top five of the worst places to commute or to drive in.
Derek: The best of the worst.
Arnold: Exactly. But to go back to your question. In my experience, I am used to travelling an hour or two at most to get to a place where I study or where I work, which is, I think the limit for most people like they wouldn’t travel more than two hours, even with the traffic.
Derek: Because you get commuters in Manila and just to sort of frame this for people, Manila is one of the biggest cities in the world and I think that’s sort of great and Manila has about 22 million people. But the traffic is, to put it nicely, atrocious, and within rush hours it could take you an hour to cover 5 or 6 kilometers which is 4 miles, 5 miles.
So, there are then people that actually commute into Manila from one of the provinces or from outer Manila to inner Manila. Not only that, but there are people that or very commonly, people use the public transport which is ‘Jeepneys’, which means, which is effectively buses but they then have to catch a number of buses to join up the routes to get their work place. So, it’s not an enviable process for most people, and what would you say then is the… And it’s also hot.
There is no air conditioning on these things and you can also get very frequent tropical rains. So, what is the average, and what is acceptable, would it be wise to hire someone that’s commuting two and a half hours a day, sort of what is the usual?
Arnold: Yeah. I think for travelling, one thing we have to take note of is the time difference between the Philippines and the countries that we normally serve. One of the popular things that people associate with BPO companies is people work on a night shift, so, the good thing there is we don’t really get a chance to be part of the rush hour time frame.
For us, when we go to work, I remember working 09:00 pm to 06:00 am shift, a couple of years ago, and whenever I travel, it takes me an hour at most, wherein if you travel during rush hour, it’s gonna take you twice or three times longer. And I think that’s one of the benefits of working at a BPO company, especially if the time zone is avoiding the rush hour.
Derek: Perfect. So, keep off the roads during the rush hour, and it’s interesting what you said about time zone working which we are gonna touch on in our next podcast.
So thank you Arnold, great insight.
Derek: Okay, I hope you enjoy that, I hope you got some valuable information from that,
If you want any more information, if you wanna see the show notes or transcripts, go to outsourceaccelerator.com/podcast/episode2.
See you next time.