Outsourcing jobs good, but conditions could be better — ILO

BACK-OFFICE outsourcing is creating “reasonably good” jobs in poorer countries, but staff are stressed and some work conditions have to be improved, a United Nations study said Wednesday.

Filipino call center personnel attending to their US clients at a business process outsourcing office. Global back-office outsourcing is creating ‘reasonably good’ jobs in poorer countries, but staff are stressed and some work conditions have to be improved, a United Nations study said.

The UN’s International Labor Organization (ILO) said its study of business process outsourcing (BPO) to India, the Philippines, Brazil and Argentina was the first in-depth look at workplaces in the $90-billion industry.

“On the positive side, and unlike previous assumptions, remote work jobs are of a reasonable good quality by local standards,” said senior ILO researcher Jon Messenger.

BPO employees in India, which has the world’s biggest share of the outsourcing market, earned nearly double the wages of same-age workers in other sectors of the nation’s economy, according to the report.

In the Philippines, BPO employees took home 53% more than workers of the same age in other industries. The average monthly salary paid to BPO employees is P16,928, higher than the minimum wage.

However Mr. Messenger said BPO workers suffered from higher-than-normal stress levels, with the industry driven by pressures to cut costs, and this led to a high rate of staff turnover.

“BPO workers face heavy workloads backed by performance targets combined with tight rules and procedures, all this enforced via electronic monitoring,” Mr. Messenger said in a video news conference from the ILO’s Geneva headquarters.

“This type of high-strain work organization is well known to produce high levels of job-related stress,” he said.

Among the stress factors, staff typically worked the telephones all night to serve sometimes difficult customers in distant time zones.

Some companies also controlled when workers could rest and take toilet breaks.

In the Philippines, which has the world’s second biggest share of the market, staff turnover rates averaged about 30% annually, compared with less than 10% in other sectors, Mr. Messenger said.

In some companies in the four countries studied, turnover could reach 100% or more every year, he added.

Work in call centers was generally more stressful, while back office positions, such as in accounting, tended to offer higher quality jobs, the study found.

The ILO called on governments as well as companies to protect the health and safety of BPO staff working at night, and urged call center operators to redesign work processes so staff enjoyed more autonomy at work.

It described the BPO work force as young, generally well educated and predominantly female except in India.

In the Philippines, 59% of outsourcing workers are women.

The ILO did not say how many people worked in the BPO sector. But about 500,000 people work in this sector in the Philippines, according to government data.

Mr. Messenger said even a few changes in BPO work policies could “make the jobs even better, while helping to reduce staff turnover.”

The changes should include regular health assessments in line with the ILO Night Work Convention of 1990 No. 171.

According to Article 4 of the ILO Convention, workers upon their request shall have the right to undergo a health assessment without charge and to receive advice on how to reduce or avoid health problems associated with the work before a night worker takes up an assignment, at regular intervals during assignments and if the workers had experienced health problems during their work.

“Employees need to have greater latitude to take rest and have toilet breaks. Policies and practices aimed at improving workers’ collective voice and social dialogue in the industry such as collective bargaining ultimately will benefit both workers and employers alike,” Mr. Messenger said.

Based on ILO data, night work is common in the Philippine BPO industry with 42.6% of total employees working in night shifts to serve customers in distant time zones such as the United States.

“Night work is often associated with occupational safety and health issues such as sleep problems and fatigue where 47.7% of BPO employees surveyed reported suffering from sleeping disorders or insomnia, and 54% surveyed reported fatigue. Other health concerns are eye strain, neck, shoulder and back pains, and voice problems,” the ILO said.

Another major concern in the BPO industry is work organization.

“The jobs are well-known to produce high levels of job-related stress and 49.2% of the BPO employees surveyed for the study reported that stress was a major concern. The top stress-inducing factors were: harassment from irate clients with 45.6%, excessive and tedious workload with 41%, performance demands with 37.4%, monotony with 33.7% and regular night work with 33.4%,” it added.

Still, hours of work in the industry are reasonable by local standards, with average weekly hours at 44.7 hours per week. Overtime work for employees is also modest, averaging 1.12 hours per week.

Business Processing Association of the Philippines (BPAP) president and chief executive officer Oscar R. Sañez told BusinessWorld in a telephone interview it has been the highest priority of the industry to promote the welfare of the employees.

“We should take note that most of the BPO companies in the country are global companies. They have been in the industry for the longest time and have been doing ways to promote a healthy environment in their workplaces,” he said. — AFP and Aura Marie P. Dagcutan