MANILA: Business-process outsourcing companies in the Philippines are spending about 1.4 billion pesos (US$24 million) a year to upskill their workers, as the industry grapples with talent shortage, artificial intelligence and increased competition.
Each member-company of the 400-strong IT & Business Association of the Philippines has a learning and development team tasked to train new employees, Jack Madrid, the group’s president, told reporters on Wednesday (Jan 28). The amount the firms spend on upskilling is a conservative estimate and is comparable to that of India, the nation’s top competitor, he said.
"Our industry has gone beyond communication. To me, knowledge has become much more important,” Madrid said.
Upskilling is now increasingly crucial as the South-East Asian nation pushes to defend its turf in an industry that has helped bring in dollars and expand its middle class since the 1990s. Outsourcing accounts for around 8% of the Philippines’ gross domestic product.
The Philippines corners about a fifth of the global outsourcing market. But over the years, companies have been looking to new outsourcing destinations such as South Africa, Colombia, Costa Rica, Egypt and Poland, Madrid said. In South-East Asia, Malaysia and Vietnam have also been carving a niche.
"Vietnam is a bigger threat,” he said, citing the country’s "quite advanced” educational system and the perception that it is "extremely strong in technology talent.”
The Philippine outsourcing group aims to increase its total workers to nearly two million this year and boost revenue to $42 billion this year from a forecast $40 billion in 2025.
"My concern is to make sure that we are a strong number two,” next to India, Madrid said. - Bloomberg
