Where Have All the Good English Speakers Gone?
by Paul Catiang

This article is based on a presentation by Guia Bengzon, Training Manager of PeopleSupport, delivered on July 11, 2007, at the Contact Center Expo of the Contact Center Association of the Philippines.

Where Are We Today?
“Has outsourcing to the Philippines already hit a human resource barrier?” Ms. Bengzon asked, quoting Asia Times’ question in its May 2006 issue. In 2006, according to McKinsey & Co., there were more than 30 countries offering offshoring services with the Philippines ranking #3 behind India and China.

BPA/P 2006 Survey
In that same year, the Business Process Association of the Philippines (BPA/P) conducted a survey which revealed that contact centers earned US$ 3.6 billion in revenue—3 percent of GDP— an increase of 50 percent over 2005. This was also the same year where President Gloria Macapagal-Arroyo allocated PhP 500 million (US$ 9.8 million) for near-hire training to augment university training and to increase the number of call-center-qualified personnel.

Where Are We Going?
Contact centers did witness some growth in their headcounts; according to the BPA/P, near-hire training added up to 240,000 overall in BPO space, with 160,000 of these people going to contact centers. With global sourcing expected to grow to US$ 180 billion by 2010 (McKinsey & Co.), the Philippines is expected to take up to US$ 12 billion (BPA/P). XMG Global has also said that in 2008, the Philippines will surpass India where call centers are concerned. By 2010, the Philippine BPO industry is expected to have over 900,000 employees.

What Will Prevent Us from Getting there?
The picture, however, is far from bright. The Contact Center Association of the Philippines (CCAP) has noted in an attrition rate of 35 percent. In addition, the average number of university graduate immediately employable by call centers remains a low 3 to 5 percent, although this has been reported to go as high as 6 or 10 percent in 2006 for some companies.

Ms. Bengzon, however, predicted a shortfall of qualified candidates: 150,000 to 200,000 in 2010. This is the direct result of the following: the increasing levels of English required for higher value-added voice and knowledge work; the increasing cost in recruiting and training to meet growth and attrition needs; the increased competition for the same candidate pool eroding margins and raising prices for future BPO customers.

The lack of efficient and effective line supervisors and managers, the higher turnover rates and lower quality of work by continuous stream of new hires are only some of the factors that will keep the Philippines from getting its share of the projected US$ 180 billion in 2010.

Results of High Attrition
The lack of proficient speakers in English definitely lowers the quality of service the Philippines can provide as a destination for contact centers, as verbal communication with North Americans makes up the majority of the BPO sub-sector. Increasing training efforts is one such solution to this deficiency, but it raises costs. Those competent English speakers who do get hired are subjected to burnout, as their workloads are increased, and will in turn raise attrition levels more. Costs are once again increased as salaries are raised to compete with existing salary rates and to prevent poaching. The Philippines’ marketability may suffer as agents leave the industry due to burnout and few qualified talents are found to replace them.

Solutions for Recruitment
Ms. Bengzon recommended standardized English language assessments tailored to the BPO industry, which can be used as a selling point in favor of the industry in the Philippines in general. Getting the profile right has to be balanced against filling the pipeline. People have to be compensated fairly and competitively. Part-time workers can be hired to alleviate need for full-time staff. Cost-effective, online assessments can be used for recruitment that goes beyond language requirements to increase throughput and reduce the time-to-hire. She also suggested greater accountability or transparency of recruiters for turnover within the first 90 to 180 days of hiring, and better integration between recruitment and training in partnering with third-party training vendors.

With regard to improving the day-to-day operations, creating a fun work environment that promotes employee satisfaction and morale comes first. Increasing the skills of frontline supervisors and managers in call center operations management, like CIAC or COPC, will raise the quality of service provided and increase operating efficiency. Benefits programs can include profit sharing and other value-added services to provide more incentives for better performance. This is only one of the means to establish the link between exceeding performance targets and reward and recognition programs. Giving high-performing employees a clear path for career advancement and empowering team members through job enrichment and professional development opportunities are also good ways to underscore the importance of high-quality performance. Jobs can be moved up the value chain to more sophisticated knowledge processes from voice work. More opportunities can be created to move people from graveyard and customer service jobs to day shift and back-office positions.

Future Trends
Ms. Bengzon cited several predictions for the BPO industry in the Philippines. The first of these trends is Sizzling Growth in BPO—competition-trained staff who can raise the level service quality. The near-hire phenomenon, which boomed from the large number of almost-qualified candidates, has now opened doors for third-party vendors who can specialize in training near-hires.

In the future, perhaps even high school graduates can serve as a new candidate pool, should a significant number of high school students prove to be proficient enough in English. According to Hewitt, older professionals can also serve as a source of part-time talent, as they are more experienced and are more likely to meet the language requirements of the industry. And lastly, once infrastructure and security issues are resolved, work-at-home arrangements can be made possible.

Industry Solutions:
BPA/P Human Resources and Training Power Team
The Business Processing Association of the Philippines (BPA/P) has the mandate to create demand for business process outsourcing (BPO) services in the Philippines and produce the necessary supply of manpower to deliver the demand. The association has, in previous years, formed the Human Resources Power Team, the purpose of which is to increase the quantity and quality of supply of candidates, thereby meeting the demand for the industry’s future growth in the Philippines. Its secondary purpose is to provide a forum for the exchange of ideas among interested HR and training professionals, industry officials and other interested BPAP members.

The HRT Power Team also aims to establish and promote industry standards for the BPO industry for English language training, operations management, human resources and recruitment; leverage the expertise and experience of HR and training professionals to educate and develop future BPO managers and leaders; improve the overall effectiveness of BPO players through the open sharing of ideas, standards, tools and best practices; conduct workshops, conferences and other promotional events to advance the practices of the BPO industry; promote standards of English language and communications skills training for universities, third-party vendors and sourcing companies; and create a higher level of ethical behavior and leadership to promote goodwill and healthy growth of the overall BPO industry in the Philippines.