HR Challenges Facing the Philippine BPO Industry in 2018

February 09, 2018 | Thought Pieces

HR Challenges Facing the BPO Industry in 2018

After years of rapid growth, the local BPO industry is slowing down. The Information Technology and Business Process Association of the Philippines (IBPAP) expects its annual growth to fall to 9%, a vast difference from 17% in the previous years. Still, it remains a key contributor to the local economy and one of the biggest outsourcing destinations worldwide.

Projected Shift in Workforce

IBPAP predicts the Philippine sector to earn a revenue of $38.9 billion by 2022, contingent on its ability to respond to the changing demands of the market. To gain a foothold in this increasingly competitive industry, BPO companies must leverage their strengths and turn these challenges into opportunities for success.

Attracting high-quality talents
Due to the growing automation of voice services, IBPAP sees the share of low-skill jobs dropping from 47% in 2016 to only 27% by 2022. Demand is shifting to more specialized roles including market research, legal processes, and accounting, thus requiring BPO companies to upgrade the skill sets of their current employees and hire stronger talents. They compete not only with recruiters within the industry but those outside it as well.

This puts employer branding at the forefront of recruitment. BPO companies are tasked to break free from their common perception as call centers and explore differentiation in areas such as their compensation package, company culture, and workplace design.

Managing attrition rate
Although the industry’s attrition rate continues to improve, it remains higher than Philippine standard. This places the burden on the Human Resources department to continually find and hire new talents, costing companies six to nine times an employee’s monthly salary. It also disrupts team dynamics and decreases company morale.
Employees are now seen as consumers requiring more reasons to stay with their company. Aside from giving higher salaries and bonuses, employers need to find ways to enhance their rewards and recognitions programs and offer training opportunities that enable their employees to grow their career within the company.

Boosting employee engagement
Studies show that companies with engaged teams have 65% lower turnover rates, 17% higher productivity, and 21% greater profitability. Employees invested in their work and their company stay and exert more effort because they want it to succeed.

The impact of engagement on retention and productivity necessitates a move toward employee-centered businesses. Companies are challenged to create an environment where employees feel valued, supported, and empowered. This entails understanding the various personalities comprising the workforce and implementing changes to encourage their growth.

impact of disengagement

Source: Gallup and Dale Carnegie

Catering to the needs of a growing workforce
With millennials accounting for 64% of the multi-generational BPO workforce, the one-size-fits-all approach no longer satisfies. Different employees have different needs, and it is difficult to anticipate them all.

While salaries do not leave much room for customization, employers can provide more options when it comes to benefits and rewards. By giving employees the power to choose the benefits and rewards relevant to them, companies address their personal needs and increase their sense of being valued.

The changing landscape of the BPO industry brings with it many challenges, yet it also provides much potential for growth. Companies must remain agile and consider their employees as important partners in achieving success.


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