Business process outsourcing sector expects 200% increase in jobs this year

MANILA, Philippines – The business process outsourcing industry is projecting a 200 percent increase in jobs this year as the world’s biggest companies struggle to cut down on costs by outsourcing some of their operations to countries like the Philippines where labor is cheaper.

A survey conducted by the Business Process Association of the Philippines (BPAP) showed that 95 percent of the industry’s executives and human resource (HR) managers indicated a positive outlook for job growth for 2009, forecasting employment growth of up to 200 percent.

The BPO industry is closely watched by the Bangko Sentral ng Pilipinas (BSP) since it is fast becoming one of the country’s biggest source of foreign exchange.

The BSP expects exports to actually decline and remittances from overseas workers to slow down dramatically this year. But officials said foreign exchange is expected to flow into the country particularly through BPO operations.

The survey was conducted by the BPAP with Outsource2Philippines (O2P) and TeamAsia and the results indicated that “about 50 percent” of respondents expected their workforce requirements to increase by over 15 percent.

BPAP said the response rate was 24 percent with 158 responses from 664 invitations sent to industry executives in a wide range of BPO sectors. The survey was conducted online.

The survey results indicated that the value add of services outsourced to Philippine BPOs was increasing, which meant that the industry was beginning to grab higher-paying BPO contracts from high-value BPO operations.

“Moderate to very high-value services ranging from financial analysis to knowledge management comprised 97 percent of the services offered by respondent companies,” BPAP said.

The survey indicated that 67 percent said their organizations provide high to very high-value services. Sectors that expect the highest workforce increases involve complex services such as back-office processes, IT services and infrastructure management, and website development.

“The average expected ramp-up is 11-15 percent from current staff levels,” BPAP said.

BPO companies with workforces ranging from 1,000 to 15,000 employees expect an average increase in staffing requirements of between six percent and 10 percent, close to the average workforce increase expected across all sectors and respondents.

Small- and medium-sized operations are expecting employment to increase at the same rate. The biggest growth is expected from companies that employ 5,000 to 10,000 personnel, with 33 percent expecting jobs to grow between 11 percent and 15 percent in 2009. – Des Ferriols with Elisa Osorio, Philippine Star