The Challenges of The Philippine BPO Industry and How These Are Being Resolved
If you have walked the streets of Manila, the capital of the Philippines, you would notice many high-rise buildings dotting the background, housing business process outsourcing (BPO) companies.
The industry is flourishing, providing economic opportunity to millions of Filipinos. It is a key economic player in the country. In 2018, the industry was expected to have generated between $24.5 billion to $24.8 billion in revenues. Despite this hefty contribution to the economy, the industry faces some challenges.
If there is one thing that best describes outsourcing companies, it is that they are dynamic. This very dynamism, however, keeps employee retention too fluid. The constant comings and goings of BPO employees looking for better opportunities keep the attrition rate high. As a result, companies are forced to constantly spend time and finances on training newly hired employees.
The global nature of outsourcing most often has agents working at odd hours due to time zone differences with the clients. Sleep deprivation is a common issue that BPO employees face, which can cause in the long run.
Unstable internet connection remains to be a big problem when it comes to BPOs. There are so many dropped calls and other communication roadblocks that happen every day, which translate to losses for the company. There are other challenges such as slow internet, power failures, call traffic and crackling phone lines that disrupt the workflow and efficiency of the company as a whole.
One of the most demanding challenges the BPO industry continues to face is the threat of incentive losses due to the increase to 28 percent corporate income tax assessment from the current 5 percent. The proposed law is likely to slow revenue growth.
The danger of fiscal incentives being diluted for the outsourcing industry could mean fewer BPO investors in the country. Consequently, it could mean less hiring capacity and possibly lower salaries for employees.
Threat of Automation
Automation and artificial intelligence (AI) remain to be big threats to Philippine BPO. Much of the world lean towards automated solutions for their businesses, and it definitely has an impact on the services provided by BPO companies. It’s also very attractive for customers because automation can cut as much as two-thirds of the cost of hiring a full-time worker.
There is a big question mark regarding the use of automated services for jobs that are typically realized by call center agents. Although nothing is set in stone, such developments can instill uncertainty and a bit of fear on BPO workers.
BPO Companies Face the Challenges
Despite the many challenges, the BPO industry in the Philippines is fighting to provide quality services. Many BPO companies are shaping policies that aptly benefit employees. Healthcare and paid vacations are just some of the incentives offered to lessen employee attrition and health issues related to the working hours.
As for customer attrition and the threat of automation, BPO companies intend to provide upskilling and reskilling trainings to the workforce. This will enable workers to handle more complex jobs and problem-solving responsibilities outside of repetitive tasks.
The local sector is also looking to allay the fears of investors to match costs and other expenses brought about by the new taxation adjustment. In essence, the Philippines is still one of the most cost-effective BPO industries in the world.
The Philippine BPO industry may be facing uncertainties and threats incessantly, but certainly local companies are moving ahead of the curve to continue their stellar performance now and in the foreseeable future.