Industry Research : Talent Pool a Challenge in Southeast Asia BPO -- Tholons
Global Consultancy firm Tholons, Inc. has cited talent pool as a challenge to the Southeast Asian countries’ business process outsourcing (BPO) industry but said it foresees niche specializations of the sector to continue to grow.
This, as 12 cities from the Southeast Asian region, including five from the Philippines, made it to Tholons’ Top 100 outsourcing destinations.
The five Philippine cities are Manila (4th), Cebu (9th), Davao (69th), Sta. Rosa (86th), and Iloilo (92nd).
"Addressing talent pool shortages will be the most critical issue in the Southeast Asian region’s IT (information and technology)-BPO industry as a whole. These should be immediately addressed to further drive the growth of the services outsourcing industry," the firm said in its 2012 Tholons Top 100 Outsourcing Destinations: Southeast Asia executive summary released yesterday.
"This is especially significant as widespread cost-cutting measures brought upon by the recession in the US and UK markets are being pursued, which in turn, are driving up the demand for outsourcing," the document read.
Tholons said BPO firms are experiencing difficulty in hiring and retaining "capable employees," thus, resulting in higher attrition rates and an increase in hiring and retention costs.
"[Such] has resulted in greater initiatives by service providers to train fresh graduates or reskill lateral hires themselves, an exercise becoming increasingly common albeit more costly," Tholons said.
Already, Tholons noted an initiative for skills development currently being undertaken in Manila is needed to increase the country’s talent supply.
"The Technical Education and Skills Development Authority (TESDA) of the Philippines, for example, has been continuously providing Finishing Courses for Call Center Agents targeted to near-hires in the Contact Support space," the document read.
Despite the region’s foreseen supply problems, Tholons said niche specializations offered are expected to grow.
"Tholons sees that the region’s current niche specializations will continue to grow and pave the way for the development of higher-value services in Southeast Asia," the document read.
Tholons said that in 2011, Southeast Asian countries have been steadily building their own outsourcing identities.
The Philippines has continued to be the premier contact support services destination, while Singapore and Malaysia have become financial and accounting outsourcing and back-office process outsourcing pillars, Tholons said.
Vietnam and Indonesia, meanwhile, have established themselves as strong providers of IT services, Tholons said.
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"As confidence and maturity builds, process and delivery innovation will thrive as well. Tholons sees this as necessitating Southeast Asia’s smooth transition up the services value chain," the document read.
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The local BPO sector is expected to have booked $11 billion in revenues in 2011, then to grow by at least 20% from this number by yearend, the Business Processing Association of the Philippines previously said.
By 2016, the sector is expected to deliver $25 billion in revenues, after recording $9 billion in revenues in 2010.
Posted by Veronica Silva Cusi, news correspondent
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