Outsourcing News for November 2013 | MicroSourcing
Davao to be promoted as backup site for BPO firms
According to property consultancy firm Jones Lang LaSalle (JLL), Davao City is emerging as a viable IT-BPO service destination outside Metro Manila. In fact, three major voice services providers were seen setting up in the city: Teleperformance with 2,400 call center operators, Convergys opened 1,000 seats, and Ibex Global, a new player in the voice segment, also began operations in the city.
Andy Gomez, JLL’s Project Leasing Manager, said Metro Manila and Metro Cebu are already over-saturated, leading to difficulty in finding skilled candidates. He added that JLL accounts for 80 percent of BPO office property deals outside Metro Manila and they are currently working on promoting Davao as a backup site for BPO firms.
For nearly three years now, Davao City has been acknowledged by the Information and Communications Technology Office (ICTO), the multi-sectoral organization responsible for categorizing ICT hubs beyond Manila, as the leader among Next Wave Cities.
Meanwhile, Bert Barriga, Head of ICT Council of Davao, said the city qualifies as a feasible BPO destination because it offers excellent infrastructure, skilled workforce, reasonable costs, sound business environment, and incentives. The city is also said to be the world’s fourth safest destination compared to other major financial districts in the country. In fact, Barriga said Davao City has an end-to-end Public Safety and Security Command Center installed by IBM.
In the wake of the strongest typhoon that devastated provinces in Central Philippines, risk reduction executives from the United Nations warned the private sector to create plans that ensure sustainability of operations despite damages and losses caused by disasters.
Local non-government organizations were also urged to join forces with the domestic government in creating long-term plans seen in Cebu - where public and private groups worked together in reducing challenges when disasters strike.
Risk Reduction and Business Continuity
Margareta Wahlstrom, head of the UN International Strategy for Disaster Reduction (UNISDR), stated that private companies tend to focus on economic and financial risks and overlook disaster risk. Since the private sector is one of the critical players in economic recovery plans, they have to weather through the challenges and stay resilient. In a meeting with the Cebu Chamber of Commerce and Industry, non-government groups, and the academe, Wahlstrom said everybody needs to be prepared for a disaster because nobody knows when it will happen. She added that groups should evaluate their strengths and capabilities for such occasions.
Jerry Velasquez, head of UNISDR in the Asia-Pacific region, said only a small number of companies have business continuity plans that can help the country recover fast enough.
Jose Mari Mercado, President and CEO of the Information Technology and Business Process Association of the Philippines (IBPAP), recently lauded the efforts of member organizations for their support and contribution to regions struck by Typhoon Yolanda. He noted that the unity that spurred within the organizations during and after the traumatic calamity proves that the business process outsourcing (BPO) sector of the Philippines not only focuses on their growth and business success, but the welfare of the Filipino community as well.
Donations from the BPO sector reach P34M in cash and in kind
As of November 15, donations from various outsourcing companies such as Wells Fargo, Genpact, Mondelez International Foundation, Arvato Corporation, e4e Global Services, TeleDevelopment, and Sales Rain have reached ?34 million cash and in-kind.
Majority of IT-BPM firms, specifically the ones spared from the typhoon, demonstrated business continuity. Sadly, one of the contact centers in Leyte which was severely affected by the tropical storm was found to have incurred damages. Shortly after the storm, executives reportedly flew in quickly to help the employees who came in to work. All of the employees were safe and the executives had ensured the employees’ safety and welfare through relief efforts.
IBPAP continues its efforts in Business Continuity Plans for member organizations in case business interruptions happen.
According to commercial real estate consultancy agency Cushman and Wakefield, Manila is 2013 Q3’s leading location for office space market absorption in Asia-Pacific.
PH's Growing BPO Sector
Joe Curran, the firm’s general manager, said Manila outpaced key cities in the Asia-Pacific region when it comes to office space occupancy. In fact, in Cushman and Wakefield’s third quarter report, Manila posted net office absorption of 482,126 square meters (sqm).
Other areas in Asia-Pacific posted lower office space take-up. Mumbai took up 314,528 sqm, Bengaluru had 287,630 sqm, Chennai - 263,303 sqm, Guangzhou - 250,114 sqm, Pune - 225,117 sqm, Chengdu - 222,336 sqm, Shenzhen - 185,450 sqm, Kuala Lumpur occupied 184,925 sqm, and Seoul had 133,604 sqm.
The top office hub in the metro is Taguig City - accounting for 59 percent of the absorption. Makati, the country’s central business district, takes up 29 percent.
Meanwhile, it was found that the vacancy rate in Metro Manila is only 4.3 percent.
One of the crucial drivers for the demand of office space in Metro Manila is the growing business process outsourcing (BPO) industry of the country.
Curran noted that office space occupancy in Manila will increase as demand is expected to grow.
During the recent launch of the $8-million Philippines-Korea Technological and Cooperation Center in Taguig City, Technical Education and Skills Development Authority (TESDA) Secretary Joel Villanueva said there’s a growing demand for health information management, animation, call center processes, and game development in the outsourcing sector of the country. He noted that the organization is eager to provide training programs to develop local talent in the Philippines.
The TESDA executive attended the inauguration of the Human Resource Development Institute - formed through the partnership between TESDA and the South Korean government. It is set to address manpower challenges for complex processes.
Growing demand in the outsourcing sector calls for skills training for graduating students
Non-BPO services are also being eyed for development in the country. Aside from BPO services, students can also improve their skills in construction, tourism, and language.
One of the key skills they are looking to develop is learning the Korean language since there is already a need for the skill, specifically for those who are going to work for Korean companies in Seoul. There are already volunteers from Korea International Cooperation Agency (KOICA) and Filipino trainers who are assigned to assist in teaching the Korean language.
South Korean Ambassador to the Philippines Lee Hyuk said the tech co-op center is donated by the South Korean government for the development of complex digital arts processes. Other segments that South Korea is working on are healthcare, agricultural development, and vocational training.
According to a report created by one of the world’s largest recruitment & HR service providers, Randstand, 66 percent of businesses in Malaysia turn to outsourcing to supply talent for complex processes in niche industries.
Recruitment process outsourcing considered as a business tool
China is the top region with 72 percent, India takes second place with 70 percent, and Malaysia is at the third spot for countries that are considering recruitment process outsourcing (RPO) as a business tool.
Jasmin Kaur, Director at Randstand, said RPO enables companies to come up with a feasible solution to talent shortage challenges particularly for specialized skills by means of organizations focusing on building talent networks. RPO also promotes business continuity and streamlines processes.
Meanwhile, business owners took notice to the fact that they need a stable strategy regarding HR systems, workforce planning models, and recruitment selection processes to reinforce their respective teams and minimize attrition rates.
Kaur believes that proper motivation is necessary to retain skilled talent. The executive also said employers in Malaysia should analyze and collect more information about the local talent to identify the issues as to why Malaysian workers are leaving to work abroad.
Rehabilitation Plans after Typhoon Haiyan
In a press release, the National Economic and Development Authority (NEDA) said they are designing a master plan that will be used for the rehabilitation and reconstruction of several areas in the Philippines that were critically impacted by Typhoon Haiyan.
The organization is spearheading a campaign and was seen meeting with other agencies that are set to help in creating the plan. The strategy will be shown to President Benigno Aquino III and will be applied immediately once relief operations are done.
Meanwhile, Socioeconomic Planning Secretary Arsenio M. Balisacan stated that the recovery plan is set to solve economic and social challenges. Some of the actions included in the plan are damage to infrastructure evaluation and reinforcement plans for housing, hospitals, schools, roads, and other forms of infrastructure.
However, Balisacan said in order for them to establish a swift and accurate strategy, they would have to come up with a concrete evaluation of the total damage and losses.
Another concern of the NEDA executive is the fast reconstruction of infrastructure to improve the delivery of services and relief goods in affected areas.