Senator challenges gov't to rethink incentives for BPO firms.
from INQ7.net

SENATOR Manual Roxas II has challenged government to rethink incentives given to business process outsourcing (BPO) firms and contact center companies locating in the Philippines.

As more BPO firms are expected to establish operations in the country, Roxas said that finding qualified people has become an increasingly pressing issue in this booming industry.

Government incentives, in particular the Department of Trade and Industry's Board of Investments and the Philippine Economic Zone Authority, have been giving fiscal incentives to foreign companies operating backroom and contact center companies in the country.

The Senator said that the current government incentives were designed at a time when the country was still trying to attract foreign investors engaged in business process outsourcing.

However, as industry analysts and stakeholders have pointed out during the eServices Phililippnes conference and exhibit in Manila, there is now a dearth of skilled labor needed to man the growing operations of Philippine-based BPO firms.

Christopher Beshouri, president and chief executive officer of McKinsey Philippines, said that while the Philippines is now considered the "best in class" in terms of providing the lowest cost of labor, the scarcity of middle management skills in the country is also an issue.

Roxas said that government should consider giving incentives to companies involved in training more people, and producing the necessary skills required by the BPO industry.

"We should 'incentivize' the training. We need to modify the government incentive package given to companies locating in the country," he said.

The senator said that the industry and government should both be "consciously expanding the skill-sets" of the country's existing human resource to cope with demand.

There are about 90 call centers employing more than 100,000 people in the Philippines, according to Bong Borja, president of PeopleSupport Philippines.He said that number of people employed increases by several thousand every month.

Ernest Cu, director of the Business Process Association of the Philippines, said that the Philippines BPO industry is expected to grow by 38 percent from 2002 to 2008. China and Central and Eastern Europe will, however, become bigger centers than the Philippines, while India will continue to be the dominant offshore player.

In a forum, Cu agreed with Roxas' suggestion, saying that since manpower and labor is an emerging issue in the industry, the need to give more incentives for training and skills development has become more crucial. "We don't need incentives to purchase a desk. Desk and computers are becoming cheaper. But people and training are very expensive," he added.

Avinash Vashista, co-founder of industry analyst NeoIT and co-author of the "Offshore Nation," acknowledged that giving incentives to companies offering free training has been one of the "best practices" noted in studies made by his company.

Beshouri added that there there is indeed a shift in "getting people to locate in the Philippines to getting people to cooperate."

He stressed that the Philippines should "use incentives sparingly" and focus on closing deals.


These BPO firms don't really care that much about training. All they care about is production. As long as there is a human being at the other end of the line at the far side of the world and can speak conversational english and the agent and the customer can practically understand each other, then that's it! That is better than no Toll-Free Customer Service for a foreign company at all. That is the sad truth from a capitalist's point of view at least from one BSD of a contact center here. Again, people are just commodity to them.