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BPOs In PH: Rising Above The Challenge

We’ve been seeing growth in the Business Process Outsourcing (BPO) industry even with the pandemic, and it’s evident in the additional 1.32 million headcounts in the Philippine Information Technology and Business Process Management (IT-BPM) sector. 

 

The IT and Business Process Association of the Philippines also reported that the BPO industry improved its gross revenues by 1.8% for the last 12 months.

 

BPO Sector Occupies Vacated Office Spaces In PH

 

The negative effects of the pandemic have caused major tenants such as English as a Secondary Language (ESL) providers and Philippine Offshore Gaming Operators (POGO) to vacate their commercial spaces and ultimately downsize their operations. 

 

Real estate services company Colliers Philippines recommended that landlords should offer their empty spaces to outsourcing firms with quick plug-and-play office space requirements and watch out for BPO firms that carry on with hiring and occupying spaces, such as those providing logistics, healthcare, and e-commerce services.

 

True enough, the BPO sector has made the country’s struggling office segment resilient with its significant support. AREIT Inc., the Philippines’ first real estate investment trust, noted that 99 percent of its buildings are occupied and contracted long-term by BPO tenants. 

 

With the recovery of the global economy, AREIT’s  President and Chief Executive Officer Carol Mills is positive that there will be a continuous need for outsourcing, and this will help manage the operating costs of the office leasing industry.

 

Business Process Outsourcing Firms are Still at 50% Capacity

 

With the health protocols and restrictions in place all over the Philippines, the BPO industry still manages to operate at 50% maximum capacity limit. 

 

Most of the outsourcing firms’ expansion is now focused on remote work. Nevertheless, even at this capacity, the office space demand within the BPO sector increases. 

 

Although Colliers Philippines believed that it may not be able to offset the considerable losses from the withdrawal of POGOs, Morgan McGilvray, the senior director of occupier services Santos Knight Frank, speculated that the BPO office demand might suddenly increase once offices are permitted to return to 100% capacity.

 

More Vaccine Doses for BPO Employees

 

Safety protocols are implemented in Business Process Outsourcing companies to reduce the risk of infection and transmission of COVID-19. Magellan Solutions, a call center company in the Philippines, goes extra by sanitizing all rooms with UVC, wiping down workstation cubicles, installing air filtration systems, and requiring rapid COVID testing for returning employees and new hires. The company sets this example to show that even a small BPO company can get through these difficult times. 

 

With vaccines now available, many BPO companies are also considering to purchase vaccine doses for their own employees to further protect them. Fortunately, investment promotion agency Philippine Economic Zone Authority offered to assist company locators with tax- and duty-free importation of COVID-19 vaccine doses. This will significantly help with the COVID-19 concerns of the BPO industry. 

 

Among the BPO companies that have started a vaccination program for their Filipino employees is the Australian-owned offshore staffing firm Staff Domain. They purchased more than 500 vaccine doses, which will arrive in Q3. These doses will be administered to their employees and their families free of charge as part of their plan to protect their health and maintain safety. 

 

Meanwhile, Emapta, another Australian outsourcing firm, has pre-ordered 7,000 doses of Moderna vaccine for its 3,500 employees in the country.

 

More Opportunities for the Outsourcing Industry 

 

The outsourcing industry continues to become competitive and viable. With the ability of the BPO industry to persist through the pandemic, international clients who plan to outsource from the country can be more optimistic about the services provided by the Philippine BPO companies. 

 

Many job opportunities are now available even in other rising cities outside Metro Manila. Philip Gioca, the country manager of JobStreet Philippines, noted that job offerings in Central and Western Visayas grew by 9% and 44% in job openings, respectively.

 

Moreover, according to the Tholons Services Globalization Index 2020 results, Cebu ranks 15th among the most competitive outsourcing destination in the world. Cebu is one of only two Philippine cities, together with Metro Manila, that made it to the list of Top 100. 

 

Learn more about why Cebu is a preferred hub for business continuity here.

 

References:

 

“2020 Latest Report: BPO Industry in the Philippines Statistics.” Magellan Solutions, www.magellan-solutions.com/blog/whats-the-number-analysis-of-the-latest-statistics-of-the-bpo-industry.

“AREIT’s Office Segment Remain Resilient Due to BPOs.” Outsource Accelerator, 28 Apr. 2021, news.outsourceaccelerator.com/areits-office-segment-remain-resilient-due-to-bpos/?__s=8hstssfntyz6rpjs9oob.

“Cebu Flash | Prospects for Cebu Office Leasing Market’s Growth Beyond 2020.” Colliers, 11 Dec. 2020, www.colliers.com/en-ph/research/cebu-flash-prospects-for-cebu-office-leasing-markets-growth-beyond-2020.

“Office Sector Still Impacted by POGO Exodus.” Outsource Accelerator, 22 Apr. 2021, news.outsourceaccelerator.com/office-sector-still-impacted-by-pogo-exodus.

CREATE Law

The Philippines has a new law called Corporate Recovery and Tax Incentives for Enterprises (CREATE Law). What’s in it for both domestic and foreign investors?

The Philippines is among the ASEAN countries with the highest tax rates, but now, it will be much lesser than you expect it to be. 

From a corporate income tax of 30%, Micro, Small and Medium Enterprises (MSMEs) are now down to 20% while corporations will only have to pay 25%.

This was done in order to give relief to taxpayers suffering from the pandemic and to speed up economic recovery.

The incentives system is also set to be performance-based, time-bound, targeted and transparent.

What The National Government Is Saying

According to National Economic Development Authority (NEDA) acting Socioeconomic Planning Secretary Karl Kendrick Chua, the CREATE law will put the country in a better position to compete for investments.

House Ways and Means Chair Joey Sarte Salceda also mentioned that the CREATE law will boost the innovation performance of the country.

Vetoed Items

President Rodrigo Duterte vetoed some items mentioned in the CREATE law in order to maintain fairness in tax payments and to respect existing tax laws.

Few of these items include:

  1. Increase of the Threshold for Vat Exemption in Residential Lots Worth P1.5 to P2.5 M and Housing from P2.5 M to P4.2 M

The VAT exemption for housing is aimed at giving relief only to buyers of

socialized housing and benefits those from the lower income bracket.

2. Tax Refunds Will Automatically be Processed Within 90 Days

 The president deems this provision inefficient because all taxpayers are required to have a full audit of liabilities and examination of tax payments, books, and returns.

3. Grant of Special Corporate Income Tax (SCIT) to Domestic Market Enterprise

This grant is repetitious since domestic market enterprises sell based on demand with or without incentives. This can also lead to an uneven business field because the tax savings can be used to lower prices and place huge enterprises at a bigger advantage over small ones. 

4. Domestic Market Enterprises are Those Considered 

as Critical to the Economy and have at Least P500 Million Investment Capital

This was deleted in relation to the veto of the grant of SCIT for domestic market enterprises.

5. Availing of Tax Incentives will be Extended

Only new activities and projects will have new incentives to be fair to all taxpayers.

6. Specific Industries will be Under Activity Tiers

This can interfere with the country’s adaptability to technological changes and

New industries that will be developed in the future.

7. Limitations of the Power of the Fiscal Incentives

Review Board (FIRB)

The investment promotion agency (IPA) will retain its power to grant incentives up to P1 billion as delegated by the FIRB.

8. Investment Capital Referred to as the Value of Investment in Philippine Currency Which Excludes the Value of Land and Working Capital and Includes Operating Costs and Tangible Assets

The president finds this item inconsistent with the standard principle on investments.

9. Power of the President to Exempt an Investment

Promotion Agency

This provision might be used to debase the will of Congress or

escape accountability measures regulated in the law and open up discretion and other fixed interests.

10. Automatic Approval of Applications for Incentives

Within 20 Days

This goes against the reform to establish a performance-based

incentive system. Furthermore, applications should be reviewed carefully and not be abandoned for the sake of practicality.

Do you find the impact good or bad for your business and future investment? Leave us a message on our Facebook page about your take on this new law. Follow us on Facebook and Instagram for more business updates.

Sources:

  1. Philippine News Agency.” Philippine News Agency, Philippine News Agency, 29 Mar. 2021, www.pna.gov.ph/articles/1135202
  1. Lozada, Bong. “Salceda: CREATE Bill Will Help PH Boost Innovation.” INQUIRER.Net, 7 Mar. 2021, newsinfo.inquirer.net/1403776/salceda-create-bill-will-help-ph-boost-innovation#ixzz6qxiNZd8V.
  1. IT & Business Process Association of the Philippines, Inc.

Quality Jobs for Quality Businesses

What does your business offer in terms of job stability and quality despite challenges brought about by the pandemic? Find out how quality job packages benefit not just the employee itself, but the economic status of your office location which impacts your business in the long run. 

Philippine Jobs on the Rise

As Philippines’ COVID cases decrease in the last quarter of 2020, the Department of Labor and Employment (DOLE) has also projected a 10 percent decline in unemployed individuals in the country.

DOLE used administrative data submitted by businesses to determine which industries are in demand at this time and their reports show health care as a top  hiring industry followed by information technology, business process management, education, logistics and construction despite the negative impacts of COVID-19.

Recently, the Department of Health (DOH) hired 8,056 health workers for 10,693 job vacancies under the emergency hiring program to counter COVID-19.

The largest number of healthcare workers hired were nurses at 2,701, followed by medical technologists at 1,356 who were deployed in public hospitals, isolation and quarantine sites, diagnostic facilities, local government units, and other COVID-19 facilities.

The business process outsourcing (BPO) industry also played a significant role in generating jobs for Filipinos with 10,000 job vacancies for technical support staff, frontline/specialists, customer service representatives, supervisors, managers, human resources recruitment and training, information technology, finance and marketing sectors.

The construction industry also announced several job openings for safety engineers and heavy equipment operators.

There is also an expressed demand for online instructors and vehicle service drivers as more businesses use e-commerce and online delivery services for consumer goods.

Increased Demand in Online Support Services

While we see a rise in trends such as online shopping and massive use of customer support online for services such as medical insurance, grocery deliveries, online banking and retail purchases,the need for highly-adept professionals who can handle not just the customer relationship but has the skill to use several communication platforms easily.

A rich talent pool with a business-friendly salary still needs to be tapped and aside from the regular screening process to determine the right candidate, medical screenings and compensation programs and rapport need to be established to keep these workers motivated and eliminate barriers to communication online.

What guidelines are you following in hiring candidates for your business? Fine tune your strategies and keep and protect your employees, your most valuable assets in your field of expertise. Contact Tahche today.

The Best Technology Practices

When technology is properly utilized, it can work wonders for your business. As businesses particularly in IT outsourcing firms adapt to the new normal, the use of technology needs to be studied and implemented carefully to promote safety, security and productivity for its employees. 

Implementing Work At Home (WAHA) and Work From Home (WFM)

While IBPAP reports an increase of 85% as opposed to 50% in productivity levels for WFM employees in the Philippines, the remaining 15% of unproductive work still needs to be addressed. WFM and WAHA protocols also need to be carefully assessed in order to protect employees and the sensitive information they carry. 

To ensure that these protocols bring success to IT outsourcing firms Business Continuity Plans (BCD), these business growth elements must be improved:

  1. Service Delivery Models
  2. Office Cloud For Digital Access
  3. Labor Management
  4. Technology Compliance
  1. Secure Service Delivery Models

Most IT outsourcing firms have agreed to the Bring Your Own Device (BYOD) policy since the Employee Provided Device (EPD) policy is limited to a few units provided by the Original Equipment Manufacturer (OEM) vendors. Although, a few risks come with the BYOD policy and these include:

The best practices to avoiding these tech risks are:

  1. Setup mobile management device solutions for multiple access and control over devices.
  2. Create encrypted corporate containers to secure company data from personal devices.
  3. Configure virtual private network to access data safely
  4. Create remote security commands that raise an alarm, lockdown or erase corporate info in the event that devices are stolen or lost. 

2.   Utilize Office Cloud For Digital Access

Storing data in a  secure office cloud keeps confidential data within the corporate network and allows employees to sync documents seamlessly in the network. 

3.    Labor Management

Whether employees work from home or onsite, it is important to secure the health of employees not just upon reporting to the office but starting from their homes. Technology can be used to safely monitor and regulate employee activities in and out of the office. 

Safety Measures such as:

          4.      Lobby for Better Technology Compliance

While IBPAP reports General Data Protection Regulations (GDPR), Payment Card Industry (PCI) and Health Insurance Portability and Accountability Act (HIPAA) policies are in the pipeline for IT outsourcing firms, supporting the progress of these regulations can strengthen cybersecurity in the country and bolster more opportunities for business growth.

Interested in building a secure and proficient IT outsourcing firm in the Philippines? Call Tahche at +1 347-467-1066 or send us a message.

How To Convince Clients To Outsource In The Philippines

More and more businesses are strategizing economically to save their business from the current financial crisis and this means outsourcing with the lowest and sustainable investments possible. As a primary outsourcing hub, the Philippines offers these kinds of investments and more.

Get To Know PH’s Business Climate

Overseas I.T. workers with high-value work skills and experience have returned to the Philippines because of the pandemic and are currently seeking positions in the BPO industry to support their financial needs, this is an opportunity for businesses. It would be a good idea to invest in these rich pools of talents. The Philippines under the build, build program of its government have also opened nine top I.T. centers across the country, easing the need for business startups and existing companies to expand at minimal costs.

Determine and Engage Client Needs

            Get to know what their business is to know what it is that their business needs.  If you find that they lack something in a specific area don’t be afraid to point it out. Tell them what you can do and what will happen if they decide to engage your services. Clients will hire you when they know that you understand them.

Enumerate the Benefits

             After getting to know your clients, go to the specifics and inform them of what you have to offer for their needs.

            Generally, a lot of companies outsource towards the Philippines because of the competitive workforce. In terms of language, the Philippines ranks fourth in the world with the most English proficient workforce because 92% of the population can write and speak English proficiently. So, there definitely is no problem in terms of language barriers.      

          Provide your clients as well with a quick computation on the total costs it will entail to engage your services, show them how much they can save when it comes to outsourcing compared to actually hiring in-house employees especially during this time. Studies have shown that outsourcing to a country like the Philippines will be 50% to 80% cheaper than actually hiring their own employees.

 Show them what you got

            Last but not the least, make the client trust you; show them what you will be bringing to the table. Draft a skeletal output that will help with what the client needs for his business, this will serve as a quick preview of what you can do.

The Government of the Philippines is protective of the outsourcing industry and assures investors that they are well protected. In fact, the Philippines has the Data Privacy Act of 2012, which is a law that the BPO industry strictly abides by. Under this law, personal and sensitive information must be kept confidential in fear of prosecution.  

             If you’re looking towards outsourcing in the Philippines, Tahche Outsourcing Services Inc. is a veteran in the outsourcing industry. With Tahche you can find everything there is to know about outsourcing in the Philippines. Call Tahche now at +1347-467-1066 or email to info@tahche.ph to get a free quote.