Keeping BPO investors happy

Now that the BPO industry is closing in on OFW remittances for dollar earnings, keeping investors in this industry happy makes a lot of sense. This is particularly important because 80 percent of the industry is foreign-owned. Unlike manufacturing with factories and large equipment, all they have are computers that can be easily left behind if they decide that it’s too toxic to do business here.

The industry expects to end this year with over 1.8 million direct jobs and generate over $38 billion in revenue, while OFW remittances, according to the World Bank, are projected to reach $40 billion this year. The BPO industry ended last year with 1.7 million jobs and $35.5 billion in revenues compared to $39 billion for OFWs. The industry doesn’t expect AI to slow down its growth here. Only two things can mess things up for them: government red tape and a lack of qualified talent to hire.

“The Philippines is the world capital of this industry,” a spokesman said. “We are number two to India, but they have a population ten times bigger than ours. We are growing faster than India. We’re growing faster than the rest of the world. We should appreciate this industry more and help our investors generate more jobs.”

The good news is, the industry is now hiring senior high school graduates because not every job requires a college degree. It is an opportunity area. It’s one of the programs the industry association is pushing. They want to increase the minimum hours required for Senior High School internships. The present number is 80, and an MoU was signed in Malacañang the other week, increasing the number of immersion hours from 80 to 640 minimum.

The idea is to establish a stronger line from education to employment. So, senior high school students spend time with the call center and train there. With more hours of on-the-job training, that increases the probability of them being hired. But 80 hours is not much. That’s barely two weeks. They believe a whole semester is better.

The industry association recognizes that our country has its share of needless roadblocks, so things move slower than they should. Investors simply want the ease of doing business. Why impose unnecessary rules? The problem with work-from-home, for instance, never seems to go away.

Right after the pandemic alerts were removed, “we had this problem of forcing our workers back on-site or losing tax privileges. That was completely unnecessary. India didn’t have this problem. Our officials were panicking because malls were not getting enough foot traffic to show a return to normalcy, and property companies were putting pressure to sell or rent more space,” a spokesman recalled.

The BPO industry’s point was eventually recognized, and there’s no longer a penalty for their people to work from home.

“It was one of those things that hurt the image of the country as a place to do business,” an industry spokesman observed. “One of the things that investors don’t like is a place where rules and regulations can be changed in the middle of the game. Unfortunately, these types of things still happen, whether it’s at the national level, involving the Bureau of Internal Revenue and Bureau of Customs or even at the LGU level.

“We would really like our investors to spend their time running their operations, instead of having to deal with the disruption of inconsistent implementation and interpretation of rules and processes and incentives. This problem is still recurring. This is not good for our image of reliability for investors.”

Some LGU rules are simply petty and obviously fund raising activities that make no sense for business. A friend of mine who runs a mini BPO operation told me that Makati, for example, requires all his employees to get health certificates, including X-rays, from a favored clinic. But all his employees are working from home in Isabela, Batangas and Laguna. Senseless requirement. Stupid gimmicks like that get on the nerves of entrepreneurs.

The skills gap is probably the biggest challenge for the industry.

“Educational reform is something we should also address, but that’s going to take quite some time. The private sector will have to continue to take on the burden of reskilling and right-skilling our existing workers and then work closely with the academia to try and narrow the gap between job demand, which is strong, versus talent supply, AI or no AI,” the spokesman said.

It’s no longer just India and the Philippines. There is an emerging third layer of locations that are growing their own BPO industry. Countries like South Africa, Mexico, Colombia, and other parts of Latin America, Poland and Egypt are now established BPM destinations. They also have their own challenges, but the Philippines should continue to be above all of these places on the bedrock of Filipino talent. That’s why there is no more important issue to address than the upskilling and right-skilling of our young population, which is a very strong demographic advantage that other countries don’t have.

“What makes us attractive right now is our competitive edge. Despite all these problems over the past decades, we are actually a world leader in this space. We are a golden goose of this economy, and so all I ask is that we allow our investors to run their business as they should, and not harass us with senseless rules that sacrifice the ease of doing business. I can’t think of a bigger economic pillar. Instead of making it harder, let’s make it easier to let us do the one thing we’re good at.”

Indeed. Let us nurture this golden goose. Quezon City and Iloilo City have shown LGUs how to keep the BPO industry happy. Let their experience become the national template.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco.