The BPO industry, also known as the IT- BPM (Information Technology and Business Process Management) is now the domestically biggest contributor to the country’s gross domestic product. Edging India as the leading call center destination in the world, the sector is one of the biggest and fastest job providers in the country for both mid-level career executives and new college graduates.
The industry continues to entice multinational companies to register their business inside and outside Metro Manila, growing 15% to 18% annually.
Let us breakdown the reasons behind the booming of this industry.
1. Lower labor & operational costs
The low cost of doing business in the Philippines associated with tax incentive programs such as PEZA and BOI have created the right environment for companies looking to outsource and expand their services to the Philippines.
While salaries have been increasing, they have stabilized and remain extremely competitive. The average monthly salary of technical or customer support representatives in the key areas for this industry, ranges from US$300 to US$500.
2. Staff retention rate
The attrition rate in the sector has drastically improved over the years. Data released by the global professional services firm Towers Watson suggests a 50% drop in attrition rate, fewer employees are quitting their job due to improved conditions.
The Towers Watson stated that the lowered attrition rate is credited to the industry’s increased efforts to widen its talent pool to cities/regions such as Cebu, Davao, and Southern Luzon. Higher salaries and bonuses are a key part of this improvement in the turnover rate.
3. Skilled, young workforce
Filipinos have very good command of the English language and excel at customer service. The country’s higher education institutions produce nearly over 500,000 English-speaking graduates per year, hence creating a steady supply of potential BPO employees with skills matched to the BPO industry. Latest studies report that Philippines has an impressive 92.5 percent English proficiency rating.
Today, more than 1 million Filipinos are gainfully employed in the industry. The industry is also projected to add a total of about 1.3 to 1.5 million new jobs in the next three years, directly and indirectly employed.
4. Growth opportunity
As the BPO industry expands, a lot has changed in the outsourcing sector over the years, particularly on how services are offered to offshore companies. There has been a bigger emphasis on giving improved lead generation, resulting to increase of sales revenue, and customer loyalty retention.
With the diversification of services offered, the future and opportunities of this industry stems from more value added services, more specifically, Knowledge Process Outsourcing (KPO).
Triple I have a team of business and legal consultants who can help assist you in establishing a company in the Philippines. From business permitting to regulatory compliance, simplified business is what we have in store for you. Please contact us here to speak with one of our business consultants.