Corruption, tight labor top BPO sector concerns

MANILA, Philippines–The business process outsourcing industry, one of the sectors driving growth of the economy, cites widespread corruption and lack of qualified talents as potential hurdles to the growth of the sector in the coming years.

According to a survey commissioned by the Business Processing Association of the Philippines and Outsource2Philippines, 54 percent of BPO executives polled said the tight market for qualified personnel would limit the industry’s growth potential, particularly with respect to high-value knowledge process outsourcing services.

Almost half of those polled, or 46 percent, said retaining knowledge workers was another stumbling block for growth. Other hurdles cited included complex training requirements (34 percent), high wages required to attract skilled personnel (30 percent), and inadequate education infrastructure (29 percent).

Being a labor-intensive industry, 23 percent of those surveyed named the tight labor market as the most significant risk factor in doing business in the country.

Another risk factor associated with business dealings here was government corruption, which was cited by 21 percent of those polled as a top concern. This represented a 10-percentage-point increase from July when a similar survey was conducted.

The negative perception of the Philippines likewise ranked as a significant risk factor, according to 15 percent of respondents.

Compared with global No. 1 BPO player India, however, 52 percent of those polled said it was still less risky to do business in the Philippines.

For 38 percent of respondents, the risks associated with doing business in the country were just equal to those in India, the 160-person survey showed.

Weather disturbances, particularly the devastating Tropical Storm “Ondoy” and Tropical Depression “Pepeng,” barely figured in the list of business risks in the Philippines, as these had almost no impact on BPO operations.

Even at the height of the storms, 49 percent of respondents said they operated normally, while 45 percent said they resumed normal operations within hours or days following the typhoons’ landfall.

Almost all of those surveyed said typhoon-related damage was either minor or nonexistent.

Despite all the hurdles and risks identified by the BPO industry players, majority of them said they would still ramp up employee numbers by 6-50 percent within the next 12 months. –Abigail L. Ho, Philippine Daily Inquirer