BPO firms face labor challenges

Human resource, one of the biggest factors that helped the Philippines gain prominence as a business process outsourcing (BPO) service provider in the world, is also the young industry’s nagging concern.

As the estimated 150 BPO companies crow about the number of English-speaking and competent knowledge workers in the country, they also worry that this valuable asset won’t be able to ramp up as fast as needed.

Already, BPO companies in the country are steadily competing for the same select labor pool with the skills and training to drive important business services for their offshore clients. But if finding these people is hard, keeping them is even harder.

BPO companies have to sift out the right people from a long line-up of job applicants, mostly coming from the huge pool of 380,000 fresh graduates every year. Unfortunately, graduates don’t equal instant employability.

"The biggest job generators right now are contact centers and other types of BPOs but there are no course offerings for our industry," says Bong Borja, chairman of the Contact Center Association of the Philippines (CCAP) and the Contact Federation Philippines (CFP).

"Inasmuch as the industry has a lot to do to market our businesses to schools, they also have to determine the course offerings that are needed by business, especially by the time the students graduate," he adds.

Better English

Because good English is the language of the outsourcing business, industry associations are also lobbying for better English communication training in schools. Ramon Dimacali, chairman of the umbrella industry organization Outsource Philippines, says the reason why 95 percent of aspiring call center agents fail to land jobs is poor conversational English skills.

"We know English and speak it better than other Asian countries but only five percent make the passable grade. We need to increase that to at least 10 percent. That’s why we are now working with the academe to offer remedial courses in conversational English," Dimacali says.

As BPO companies put greater effort to finding suitable personnel to scale up their operations, the high demand spawns another problem: manpower piracy.

Human resource managers are realizing that even the most desirable pay and incentive schemes that include luxurious amenities in the office are not enough to slow down the high personnel turnover rate.

Borja says the CFP has been consciously encouraging its members not to poach for people within the industry and not to outbid each other. To augment their manpower needs, CFP members are encouraged to improve their talent expansion programs by recruiting from outside the industry and developing agents from their current pool to become managers to keep them motivated and happy, Borja says.

Labor Laws

There is also the less-told fact about antiquated Philippine labor laws, particularly on working hours for women and the status of contract workers, which create bumps in the local BPO landscape.

Under the Labor Code, em-ployed women are not supposed to work beyond 10 p.m. It also has clear restrictions on the em-ployment of contract workers beyond six months. Both rules clearly failed to anticipate today’s outsourcing business model that caters to clients in another time zone and experiences dips and peaks in the amount of work from abroad.

Ironically, most workers in BPO outfits, especially in call centers, are women who have to work up to late night or till dawn to serve daytime customers in the United States and other parts of the globe.

"Our Labor Code was made at a time when the economy was being geared up more as a manufacturing/industry base type, which is no longer the case now," Borja says.

"But because of globalization, we now have knowledge workers and the so-called anywhere, anytime customers and service providers. How can we be an anytime and anywhere service provider if our people cannot work at night? If we truly want to take advantage of and ride the (BPO) wave, we need to have an infrastructure policy to support it," he adds.

Contract Workers

Borja, who is also president of the Philippine operations of the US-based contact center PeopleSupport, says outsource service providers need more flexibility in hiring contract workers for more than six months.

"The spike in our business is part of how normal contact centers work. If we don’t have flexibility then somehow the scope of opportunities available to us is being limited. We think the two provisions are no longer applicable not only for contact centers but today’s business in general," he says.

The industry looks forward to having the outdated provisions in the Labor Code amended, which, Borja says, would first entail changing mindsets. Meanwhile, it gets around the restrictions by obtaining "blanket exemptions" from the Department of Labor and Employment (DOLE).

"The government has made it almost automatic for any contact center company to get the exemptions just by writing the DOLE… We have not received a formal reply from them yet but any official from DOLE would tell you that an exemption for contact centers is a non-issue," Borja says.

BPO companies believe it is fair and practical that they be allowed to keep contract workers to balance the seasonality of the projects they generate from abroad. Ernest Cu, president and CEO of SPI Technologies Inc., previously raised this point to Networks, explaining how it was operationally challenging to be saddled with lots of people with nothing to work on at any given time.

Borja asserts that the law on contract workers restricts some BPO companies from taking in new business that may take longer than six months. "Because of the seasonality, some BPO companies actually experience peaks in December or February. Whenever we have that opportunity we try to flatten it out and only take the business that our regular workforce can handle and we let go of the spikes," he says.

To strengthen their case, many BPO companies are not averse to compensate contract workers similar to regular employees’ hourly rates. This is one way to ensure that contract workers don’t get the short end of the stick.

"I’m fine with that but I need the flexibility to let them go after the business is gone," says Borja, adding that by having more latitude in the employment of contract workers, BPO companies can help put a dent on the high level of unemployment and underemployment in the country.

Why babysit when you can be a data processor? With the BPO boom, we may hear fewer depressing stories of how young education and nursing graduates work at menial jobs as domestic helpers abroad.

There is now a healthy demand for nursing graduates in companies offering medical transcription, which is another type of BPO business. Underpaid teachers may also find themselves in BPO outfits that deliver modern distance education solutions.

Of course, the BPO wave may partly skew the supply of teachers and nurses in schools and hospitals but Dimacali believes the more important thing is to be able to address the creation of jobs. With opportunities in BPO, teachers, nurses and other caregivers are being transformed into processors of information, he says.

(Next: Profiles of BPOs)