Too many holidays hurting BPO sector

CEBU, Philippines - “We don’t like more holidays,” the Business Process Association of the Philippines (BPAP) is again calling the government to hear their predicament, as the country positions itself to be on top of the list in the world’s outsourcing market.

Raymund Lacdao of BPAP reiterated this call hoping that the Benigno Aquino III administration will hear this call this time, absorbing too many holidays in the Philippines is very costly for the outsourcing sector.

At present, he said there are 22 holidays in a year,which means industry players have to pay extra to its employees in a 24-hour operation.         

“The [declared] holidays in the Philippines has huge impact to our operations. We are serving other countries. It costs us a lot of money.

Already, he said the 60-day maternity for women also add up to the higher cost of operations for the BPO sector. More so, if the pending bill in Congress extending the maternity leave for women to 90 days will be passed into law, this will further give deeper impact to the “cost of doing business” in the Philippines.

The cost of labor in the Philippines is slowly getting expensive, he said adding that the foreign exchange stability is also one of their long-standing concerns, “we build our client and quote them in US dollar, yet we are operating in Peso value,” he said.

Although the outsourcing industry in the Philippines is regarded as one of the sunrise industries, which is seen to bolster economic strength and caution the country’s fragility from being affected from the weakening economic tigers, internal problems in the industry should be taken into serious consideration by the government.

Between the years 2000 to 2004 the industry grew at a rate of 150 percent. But from 2005 to 2008, the growth hit a slower pace with 50 percent average rate.

“We don’t want to lose the opportunity. We are already number one. Hope we can get the attention of the government,” Lacdao said.

Aside from climbing cost of labor in the Philippines, he said the scarcity of talent in the country has also caused alarming signal from the industry players, as well as the potential outsourcing investors across the world.

He said the retention cost, in order to address the high attribution rate within the industry, is adding up to the higher cost of doing business here.

“Retention rate is expensive because there are players trying to get the same talent pool. Thus, they invest more on attractive programs to make sure that the same people will stay with the company,” he said.

He said with the growth of services being done in the Philippines now, from merely voice-service, to the more complex jobs such as accounting, human resources, financial services, among others, the sectors’ potential to employ at least 4.5 million people in the next six years is easily possible.

However, with current problems faced by the industry players, with lesser attention given from the government, the opportunity are being threatened, he said.

More importantly, the BPAP, as well as the Contact Center Association of the Philippines (CCAP) are strongly supporting the National ICT Confederation of the Philippines (NCIP) bid to convince the Aquino administration to set up a dedicated Department for the ICT sector.