The Outsourcing Week in Review: Wednesday, February 5, 2020

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THE WEEK IN REVIEW

The news last week that New York State has enacted a new law to encourage keeping call centre jobs in the state should cause some concern in BPO boardrooms in the Philippines. According to New York state governor Andrew Cuomo, the law will protect the state’s call centre workers by putting in place serious financial disincentives to companies that want to outsource jobs out of the state.

Adding further to the bad news was the announcement that leading UK telecoms firm BT plans to end all outsourcing of its customer support in the Philippines and India. Australia’s US$670 million plan to outsource the processing of its visa system is also in doubt. It is now likely to receive hostile political scrutiny as it undergoes parliamentary approval.

With China’s novel coronavirus crisis now casting a fearful and uncertain shadow across the Asian region and beyond, it has been a tough end to the first month of 2020. No wonder that finance secretary Carlos G. Dominguez III has called for the immediate re-skilling of the workforce in the IT-BPM sector and other labour-intensive manufacturing sectors because of the external and internal risks the country is facing. Despite this gloom, however, the underlying business fundamentals for the Philippines remain solid.

The country’s economy expanded 6.4% in the fourth quarter last year, its fastest growth rate for any quarter in 2019. The employment outlook for the BPO sector is also robust. Online hiring in the BPO/ITES sector grew 19% in December from 17% in November, according to job search portal Monster.com; and online recruitment was the highest for the IT sector, which posted a growth of 28% in December. IT services and support company CSS Corp said it is aggressively hiring, with an additional 500 employees needed at its new Bonifacio Global City facility, its third in the country. VXI Global Solutions has also appointed four highly experienced senior executives as part of its efforts to drive business expansion.

Moreover, the fact remains that the rising minimum wage in the United States is still likely to buoy the growth of the outsourcing industry in the Philippines. US firms will want to outsource more than ever to cut costs, argues global commercial real estate services firm Colliers International, in spite of efforts such as that of New York to keep jobs at home. And industry stakeholders in the Philippines are busy ensuring that there are suitable office locations for their expansion and qualified staff to fill them.

For example, a PHP360bn (US$7 billion) investment by the consortium of SM and Ayala at the South Road Properties development in Cebu City is expected to create two million jobs, with 480,000 coming from BPO firms. Although, Cebu may have dropped a notch in the Tholons Super Cities ranking from 11^th to 12^th place, Colliers Philippines says the city still is competitive in terms of talent, infrastructure, and innovation. Another fast developing outsourcing region, Negros Oriental, currently employs about 33,000 workers, but the Bacolod-Negros Occidental Federation for Information and Communications Technology believes that this number will hit 60,000 by 2022.

Complementing the industry’s drive to up-skill workers, the Philippine Economic Zone Authority (PEZA) has launched its first Special Economic Zone (SEZ) Institute. In partnership with Mariano Marcos State University, the SEZ Institute will provide skills training and research support, based on the industries identified as relevant to the region.  Local outsourcing firms are also continuing in their drive to maintain global best practice. Pasig-based KPO firm Global Virtuoso has earned the ISO 27001:2013 certification, one of the most widely recognized and globally accepted security standards. Transcom Worldwide Philippines, a BPO company with a strong presence in Iloilo, is cutting down on its ecological footprint, by provided waste-segregation bins to ensure that its waste does not end up clogging the local drainage system.

Wednesday, February 5, 2020

NEWS THIS WEEK

03 February 2020

• Finance Secretary Urges Immediate Reskilling Of IT-BPM Workforce – read article…
• Australia’s Visa Processing Outsourcing Plan Faces Uncertainty – read article…
• Transcom Remains Committed To Reducing Eco Footprints – read article…

31 January 2020

• New York Bans Call Center Outsourcing – read article…
• SRP Investment To Create 480,000 BPO Jobs – read article…
• BPO/ITES Online Hiring Up 19% In December: Monster – read article…

30 January 2020

• BT Moves Customer Service Calls Back To UK From Philippines, India – read article…
• KPO Firm Global Virtuoso Achieves ISO 27001:2013 Certification – read article…
• US Wage Hike Could Drive Outsourcing Growth In PH – read article…

29 January 2020

• IT Support Firm CSS Corp Hiring 500 Workers At New Facility – read article…
• PEZA Launches Economic Zone Institute – read article…
• Cebu Falls One Notch In Tholons’ Super Cities Ranking – read article…

28 January 2020

• PH Economy Grows 6.4% In Q4 – read article…
• BNEFIT Bullish On 60,000 New Jobs By 2022 – read article…

27 January 2020

• VXI Appoints Senior Hires To Drive Business Growth – read article…

Read more Inside Outsourcing Newsletters here:

1. The Outsourcing Week in Review: July 25, 2018
2. The Outsourcing Week in Review: February 12, 2020