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ASK the
executives from the country’s leading knowledge process
outsourcing (KPO) companies and they will tell you the
Philippines will soon suffer a serious talent crunch.
Give it
three or four years, said one KPO executive, and we will
feel the pain of that talent scarcity, unless the
universities, educational system, industry and the
government could sit down together and develop a modus
vivendi to address the challenge.
Too bad
because KPO is where the future of the country’s
fast-growing business process outsourcing (BPO) lies.
And its continuing growth would determine the extent to
which the country could hold on to its talents, many of
whom are being pirated for jobs in Singapore, the United
States, London, the Bahamas, and even the Gulf states.
KPO is
Integreon Managed Solutions—owned by the Ayala
family—doing market research, risk analysis, business
plans for global investment companies, legal firms and
investment houses. KPO is Thomsom Philippines doing bond
and equity research, perception studies, loans and
project finance and facilitating investment deals and
providing financial analysis to Fortune 500 companies.
And it’s about Deutsche Knowledge Services providing
high-end accounting and financial services for Deutsche
Bank Group Worldwide.
It is a
high value-added form of outsourcing that employs
high-end skills, expertise and judgment. We are talking
here about hot-shot MBAs, software engineers,
accountants, management engineering experts and
mathematicians doing a lot of think work.
This is
in contrast to most BPOs where workers simply follow
detailed processes and procedures determined by firms
and companies in the United States.
Right
now industry sources say there are probably around 5,000
people engaged in KPO. But this number is rising.
Thomson Philippines’s staff, for instance, is expected
to grow by 10 percent this year. Integreon is set to
open a 250-seat KPO in Makati. And there’s another KPO
that is hiring people at the rate of 50 talents a month.
Many
more are hiring. The problem is that talents these days
are getting scarce. It’s a roadblock the country should
remove if KPO is to attain its full potential. The
scarcity of talents is due to several reasons.
First,
there is an ongoing war for talent these days. The
country’s labor market has totally globalized such that
it’s a lot easier for other countries to lure talents
off the Philippine soil. These days, an accountant with
four years experience and good knowledge of SAP, one of
the leading business software that competes with Oracle,
could command as much as a seven-digit salary. The
Singaporeans, however, are willing to pay double that
amount.
What
makes it hard to keep them here is that such talents are
being sought by headhunters for the big accounting firms
like Deloitte Touche Tohmatsu, Ersnt and Young, KPMG and
Price Waterhouse. These four are willing to pay top
dollar including family relocation to places like New
York, London, the Bahamas and other financial centers of
the world. And it’s so easy for local talents to leave
because they are usually just in their mid-twenties,
many of whom are unmarried and therefore excited by the
high adventure of working in the world’s financial
centers and global cities.
Second,
the country’s educational institutions are increasingly
lagging behind the requirements of the business
community. For instance, KPOs are in dire need of people
with specific skills in enterprise resource planning,
process mapping engineering, financial markets, process
control, international financial reporting system,
Oracle, SAP, and the Sarbanes-Oxley financial and
accounting disclosure system.
Yet most
accounting graduates are simply taught the generic
accounting principles and skills that are increasingly
becoming obsolete. The same is true in many other
technical professions like engineering.
And the
third reason is that some educational institutions are
resisting change and innovation being proposed by the
industry. They are just too risk-averse to invest in new
curricula, facilities and equipment.
One KPO
executive, for instance, noted that the state schools
like the University of the
Philippines
are suspicious of the industry’s efforts to introduce
reforms in the curriculum, as its Board of Regents feel
such changes would constitute “violation of academic
freedom.”
In fact,
many schools, even until now, think that the problem of
KPOs as well as BPOs in general are the private sector’s
problem and not of the university system, whose mission
is to provide “holistic” and general education to the
young.
Of
course, universities like Ateneo and
La Salle are supposedly responding to the industry’s needs, but these
two universities alone cannot redress the talent
scarcity. The entire educational system must pull in
weight if only to maximize the economy’s gains and
spread the benefits of job opportunities fostered by
outsourcing.
It’s no
exaggeration to say that the future of this country is
at stake in the timely redressing of this problem. As it
is, we’ve missed so many boats and we can’t afford to
miss the opportunity to be a major KPO player in the
world.
We
missed the opportunity in agrarian revolution by
dilly-dallying with the implementation of the agrarian
reform law that created uncertainties, thus driving away
potential investments in farms. We missed an export-led
revolution in the ’80s and the ’90s, catalyzed by flows
of Japanese and Taiwanese investments, by shielding the
manufacturing sector with dirigiste policies.
And now,
we could miss the services revolution if we dilly-dally
with our response to the growing opportunities offered
by outsourcing.
We
always think
India
whenever we hear the word “outsourcing.” The truth is
that Ireland pioneered in outsourcing and sophisticated
financial services long before India did, and is now
among the countries with the highest per capita incomes
($48,604), next only to Luxembourg ($80,000), Norway
($64,000), Iceland ($52,000), and Switzerland ($50,000).
Some
economists are smirking about a services-driven growth,
but India followed the same path and has grown at 7
percent to 10 percent a year in the last decade.
Now, the
Philippines has a crack at a similar chance and one
wonders why policymakers and the educational system are
not moving heaven and earth to ensure that our initial
success in outsourcing is sustained.
Of
course, we don’t have to abandon our farms and
factories; we just have to put in place certain
initiatives like upgrading the education system to make
the services sector competitive. These same policies can
actually enhance the global competitiveness of the rest
of the economy.
Right
now, policymakers in both public and private sectors are
content to say the BPO and KPO sectors are growing at 50
percent a year. Had we taken care of the problems in the
educational system, these sectors, according to industry
experts, could have been growing by 100 percent to 200
percent, thus cutting the rate of joblessness. |
