Mahindra to invest $240 M in AsPac

MANILA, Philippines - Indian business process outsourcing (BPO) giant Tech Mahindra and its sister company Mahindra Satyam have expressed their interest in expanding their operations in the Philippines due to the rapid growth of the BPO sector in the country.

“The Philippines is fast becoming the country of choice for BPO investors because of the similarity of cultures between the Philippines and our Western clients, coupled with the lower cost of operations in the country,” Tech Mahindra president and chairman Sujit Baksi said.

Baksi also said investors find it risky to invest in the BPO industry in India due to the sector’s over-saturation in the country, thus making the Philippines’ BPO industry, which is currently in the developing stage, attractive to investors.

“To that end, we will be investing $240 million over the next three years to bolster our operations in the Asia-Pacific region,” he said.

Tech Mahindra entered the Philippine BPO industry in 2010 when it opened its first call center and back office processes service in Eastwood.

Now, the company has over 1,800 employees, nearly all of whom are Filipinos, and it has opened another operations office in Manila and one in Cebu.

“We currently have some 1,800 employees, all of which are Filipinos, except for three positions which are being handled by foreign nationals. Eighty percent of our employees work in our voice services such as call centers while the remaining 20 percent are in non-voice services such as IT services and analytics,” Baksi said.

“We have 1,300 call center seats working 24/7 and we handle 550,000 calls per month while our non-voice services handle 150,000 transactions per month,” Baksi added.

Tech Mahindra is currently handling five clients in the United States, one in the United Kingdom and one in the Philippines, the names of which Baksi refused to divulge, citing client privacy agreements with these companies.

.1-M BPO jobs

According to a study done by the World Bank, there will be 100,000 jobs that will be available in the BPO industry in the Philippines this year.

However, the quality of job applicants has declined, as more companies open their doors to undergraduates who lack the necessary skills for the job.

This is being addressed by the Business Processing Association of the Philippines (BPAP) which has tied up with the Technical Education and Skills Development Authority (TESDA) in offering skills and language training for individuals interested in entering the BPO industry.

According to Baksi, Tech Mahindra has taken steps to address this as well with stricter hiring policies and offering scholarships for undergraduate employees.

“We stick to a global hiring standard. All our employees must be approved not just by the HR office, but also by the Quality and Team Training offices. This is the only way we can assure our clients that we can offer a high level of quality on our services,” he said.

“We also offer scholarship programs for deserving undergraduate employees who are interested in finishing their studies. This assures us that our employees have the chance to grow and lower our attrition rate as well,” he added.

The scholarship program has lowered the attrition rate of Tech Mahindra to 21.1 percent, nearly one-fourth of the industry average.