By IRMA ISIP

Business process outsourcing companies in the Philippines are expanding and the government is trying to correct the drying talent pool.

Trade secretary Peter Favila told reporters after his speech yesterday at the e-Services Philippines Forum, that one telephone company’s hiring rate has dropped to three percent.

A year ago, BPO firms fret that out of 100 applicants they screen only six qualify. Now it is down to three.

Favila said companies and schools are intensifying English proficiency and technical training to correct the present problem.

Despite the current problems, so many BPO companies are expanding like Ericsson Telecommunications Inc.

Favila said it will triple the number of accountants under its fold.

Other new investments include those of: Genpact, a member of the GE Group which has established an 800-seater contact center and hopes to expand to 3,000 employes in a few years; Dell, for a 700-agent contact center with expansion to 3,000; NetSuite, a global provider for integrated software; Sutherland Global Services, a New York-based company for a 1,000-seat BPO operations; Logica CMG, a London-based BPO firm for financial and accounting outsourcing and; Grand Vision International, a UK firm for a website design center in Clark.

He added that those who have expanded recently include: PeopleSupport, $15 million for its call center operations; Teletech, $75 million in Lipa, Dumaguete and Bacolod; Convergys which intends to hire 700 people by the end of the year and; HSBC which plans to open up another facility in Quezon City.

Favila said the information technology-enabled and business processing outsourcing sector is projected to to triple to a $12.4-billion industry by 2010 from $3.6 billion last year.

Favila said the sector is seen to create 920,764 jobs by that year, about four times the number of jobs as of 2006 which was 244,675.

Favila said the investment is significant since Ericsson’s Manila Shared Services Center is the only one outside the company’s headquarters in Stockholm, Sweden where two others are located.

The company inaugurated its headquarters at the Bonifacio Global City, Taguig last September.

The Center started its operations in July 2004, initially covering seven Southeast Asian countries and has since expanded its coverage to include United States, Canada, Mexico among others.

Ericsson had noted that Philippines as a perfect location due to its highly skilled, competitive and hardworking Filipino workforce.

In his speech, Favila said government is now positioning the country as a location for higher end knowledge work, known as knowledge process outsourcing to grab a slice of the global $17-billion industry.

The Philippines, Favila said, has a vast pool of people that can take on knowledge-intensive jobs like architecture and engineering. The two alone are estimated to reach $10 billion in three to five years.

Currently, the Philippines hosts Fluor Daniel, JGC (Japan, IBM Solutions, Bechtel, among others, for these kinds of work.

Favila said apart from a stock of 75,000 licensed professionals, the Philippines also offers competitive labor costs, at 15 to 30 percent of salaries of those in the US, Japan, and Singapore.

He noted that the Philippines can also make a mark in game development, animation and design.

In his speech, Favila said government is addressing concerns of the sector in sourcing qualified human resources since takeup rate in the sector has fallen drastically. Favila later told reporters that one telco’s hiring rate is a mere 3 percent.

"We are in discussions with our private sector partners and academic institutions to make sure that we have continuous supply of English proficient and highly-skilled professionals for high value jobs," Favila said. He added that the ongoing English Proficiency Enhancement Program being pursued in 30 universities and training institutions nationwide.

Other initiatives involves a focused investment targetting mission in untapped markets in the United States to widen our reach, such as areas like Florida, Atlanta, Houston, Dallas, Phoenix, Seattle and Chicago. Another is an update of our inventory of IT firms and workers to encourage expansion in the regions and provinces.