PHL slowly catches up with India's BPO sector

CEBU, Philippines --The declining attrition rate in the Business Process Outsourcing (BPO) sector would help the countryís attractiveness to the foreign investors.

The Philippines is now overtaking India in terms of lower attrition rate and this signifies rosier prospects for the BPO investments here, said Tholons managing director for South East Asia Jonathan De Luzuriaga.

During the starting years of the Philippine BPO industry, attrition rate reached to as high as 70 percent. Today, de Luzuriaga said BPO companies are reporting low workersí turn-over or attrition rate of less than 50 percent, which is lower compared to India.

De Luzuriaga echoed the feedback of the BPO players in the Philippines, saying that the Philippineís support to boost the BPO industry from private sector, academe and the government has helped significantly in the stability of maintaining highly skilled workforce.

We put a lot of premium in terms of training and education,î he said adding that the Filipinoís good psyche is one of the factors that push up the attractiveness of the Philippines to the worldís BPO investors.

Cebu for instance, is working hard to make the Philippines the number one BPO destination in the world, especially in the non-voice outsourcing investments.

In the next few years, Cebu is moving towards attracting the non-voice BPO investors, or the Knowledge Process Outsourcing (KPO).

Cebu Investments and Promotions Center (CIPC) managing director Joel Mari S. Yu said that, while Cebu has already made its name as the preferred location for voice-related BPO investments, it has to    focus its promotions on inviting the high-value BPO investments KPO.

ìWe have to prove that we are more competitive than India in terms of quality and quantity. Right now, the Philippines is best for voice BPO, but there is bigger market in the non-voice segment,î Yu said.

KPO is an emerging segment in the outsourcing sector that Philippines has yet to penetrate. Currently, this market is dominated by India.  

This middle and higher level outsourcing service will need professionals such as financial analysts, people who have degree and masters in human resource management, accountants, among others.

Cebu, on the other hand, is slowly attracting the software development investments, as it has proven to the existing software development companies, that talents here are far more competitive than that of India.

In a separate interview with Willem-Geert Lagemaat chief executive officer (CEO) of Lighthouse Holdings B.V. a software development company operating in Cebu he said that the firm found out that it is much easier to work with Filipino software developers than Indian.

Although the Philippines is 10 years behind India in terms of accommodating BPO investments, the country is now catching up and holds a total of 21 percent of the global market share in outsourcing.

Although attrition rate is just one of the factors that are considered by investors, it is one of the most important gauges of a mature BPO industry and quality of workers available.