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Skills Lack Clouds Call-center Boom
By Sherryl A.G. Quito, The Manila Times
Monday, June 19, 2006—In a sprawling office in the Philippine financial district of Makati, rows and rows of Filipinos sit in front of computers answering calls made by Americans. Although answering calls from the other side of the world may sound too simple, call centers have become a “sunrise industry” in this country. The government sees it as the growth driver of the economy.
The emergence of BPOs (business-process outsourcing) is one of the reasons our economy is holding on despite a lot of difficulties. The BPO industry opens up a whole new world of employment opportunities for Filipinos, generating millions of pesos for the country's economic stability. The BPO industry includes contact call centers, medical transcription, legal transcription and translated legal document editing, animation and other art services, various other back-office services like bookkeeping and auditing, TV services like dubbing and close-captioning and software development and other service activities that are information technology intensive.
A report by the Department of Trade and Industry says the BPO sector reached about $1.6 billion in 2004 from $350 million in 2001.
The World Bank says the BPO industry maintained its growth performance compared to 2004. The revenues from call centers, in particular, grew by 5.3 percent in the second quarter following a 4.6 percent growth in the first quarter of 2005. At present, Makati and Ortigas, the country's top business districts, are the preferred locations of the booming industry.
Other urban cities like Cebu, Davao and Dumaguete have also served as home to US firms providing “cyberservices” including customer service, back-office processing, data transcription and other information technology-related services.
The Philippines ' chief competitor in attracting BPOs is India , but the government and industry leaders say the Philippines has some advantages: a cultural affinity with the United States and its relatively cheap labor and modern telecommunications infrastructure. The country has been a favorite because of the abundance of English speakers that are college graduates and Americanized when it comes to accent.
103,000 new jobs
The local BPO industry, which employs 233,000 workers, is expected to generate 103,000 new jobs this year, mainly in call centers, according to a Business Process Outsourcing Association of the Philippines forecast. The booming industry expects to generate $3.8 billion in revenues this year, 52 percent higher than last year's revenues of $2.5 billion. According to The Philippines' Offshoring Opportunity, a September 2005 report by McKinsey and Company, the demand for global outsourcing services is expected to reach $180 billion by 2010. The Philippines ' outsourcing industry aims to acquire 5 percent of that market, making it a $10-billion industry, up from about $1.6 billion in 2004.
The intensity of the recruitment efforts of contact centers, for one, can be described as a function of the unexpectedly rapid growth of the outsourcing industry over the past five years. In fact, high demand for skilled professionals holds true across all sectors of the industry. In animation alone, there is a need to train 25,000 new industry-ready animators by 2010 to meet global outsourced animation services requirements, said Joy Bacon, Animation Council of the Philippines Inc. executive director.
“There's still a lot more room to grow,” said Fermin Taruc, president of the Philippine Software Industry Association and managing director at software firm Gurango Software Corp. Taruc said that 2006 will see higher value-added work as a function of our people's expertise and a function of market dynamics as well.
Room for improvement
According to a study commissioned by the National Economic and Development Authority and prepared by Prof. Ceferino Rodolfo of the University of Asia and the Pacific, although the Philippines fares favorably in all the performance aspects of the BPO industry, there is much to be improved.
He adds that the sourcing of qualified BPO professionals is increasingly becoming a problem and is predicted to worsen in the long term as the qu alit y of the country's educational system worsens.
“English proficiency is a core human-resource competency that we have to strengthen if we are to attract more BPO providers, particularly call-center operators that deal with the customers of large American firms,” Rep. Eduardo Gullas of Cebu said. “In order to stay competitive, it is absolutely imperative for us to reinforce the English skills of young Filipinos joining the labor force each year.”
To address this growing concern, the administration has started to throw money at the problem. President Arroyo recently earmarked P500 million ($9.8 million) for outsourcing-industry training. As part of the scheme, students interested in outsourcing jobs are given vouchers that may be used for tuition at government-accredited human-resource institutions.
But obviously, the problem is rooted in the declining qu alit y of Philippine education. The Department of Education said its 2006 budget of P8.15-billion education reform program, which will be spent on various programs, includes P1.2 billion for hiring 10,000 new teachers and P1.8 billion for new textbooks.
English, math and science
Education Undersecretary Fe Hidalgo said the 2006 budget will be spent to improve the competence of students and teachers in the three key subjects: math, science and the English language. The department, she said, will invest P581 million in training and development, including in-service training for science teachers and the English Proficiency Program for Teachers.
“We're concerned that there is the need to really improve our proficiency. We've started intensifying the use of English. Today, a majority of the subject areas are taught in English except for two subjects, Filipino and Makabayan.” Hidalgo said. Makabayan covers Sibika, Kultura and Science.
The department has carried out similar programs over the past years. But let's face it. Nothing has happened. The Filipinos' English-language skills have deteriorated further. Hidalgo said that her department will be concentrating on intensifying the training of teachers to improve their proficiency in English this year. “Our objective is to intensify teacher training particularly on communication, and on how to teach. We also have a training program in the regions on how to teach reading effectively.”
The department's “School Mentoring Program,” which seeks to train teachers to mentor, is another project that promotes proficiency in English language. Under the program, some 37,000 public-school teachers will be honed in English, Math and Science. Over 60,000 teachers have already been trained. Under its national reading program, the Department of Education also promotes functional literacy to make every student read and understand what they read. Hidalgo said that student's reading comprehension should be enhanced starting at third grade. The department is also looking into the possibility of requiring incoming or new teachers to take another examination on English proficiency on top of the licensure examination for teachers. It is also planning to require old teachers to undergo a seminar on English, math and science for the same purpose. “Public-school teachers will soon be taking up remedial classes themselves,” Hidalgo ended.
Security concerns
A UA&P professor, however, warned recently in a paper he prepared on commission by the NEDA think-thank PIDS that besides repairing the decline of English proficiency, US and European sources of BPO business are beginning to worry about the Philippines as a site because of the excessive political conflicts, fears for personal safety coming from criminal elements as well as from law-enforcement agents who are in league with criminals and the arbitrariness of officials in treating the rule of law.
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This article was originally published in the Manila Times on June 19, 2006. Reprinted with permission. |
