Hypergrowth and pride, but also salary wars and poaching

You are in the perfect place.”

“You’re changing the world.”

“We are again on hypergrowth.”

A super pep talk praising the Philippine’s spot as a top global  destination of contact centers closed a  three-day international industry conference held for the first time in Cebu.

“Everything is on a roll,” said Benedict Fernandez, president of the Contact Center Assocation of the Philippines, who gave the final message to over 2,000 delegates at the Shangrila Mactan Resort on Friday.

At the same time, the reality of cut-throat competition for talent,  had to be acknoweldged, as stakeholders in various forums earlier  complained that signing bonuses and ultra-aggressive recruitment make it harder to keep employees or develop loyalty.

Fernandez  led the assembly in a pledge of commitment of further growth for the Philippine industry, which notched 18 percent year-on-year revenue growth in 2012,  hiring almost 500,000 employees and earning US$8.7 billion.

At the end of the pledge, the assembly broke out in laughter when the CCAP president asked them all to repeat: “I promise not to poach.”

STARTING PAY

With starting pay of a call center agent, often  a fresh college graduate, ranging from P15,000 to P20,000, and a signing bonus of up to P10,000 thrown it, it’s easy to see why a job in Business Process Outsourcing (BPO) is a magnet for  qualified, English-speaking applicants.  (The rate is basically the same in Metro Manila and Cebu, said CCAP officials.)

And with a young population – the median age in the Philippines is  23 years old – the  BPO sector benefits greatly from the demographics.

“Tell the young:  This is our time. You are in the perfect sunrise industry.  This is the the happening place.  We are blessed,” said Fernandez in his speech.

The war for talent also reflects a common struggle of BPO companies to find and keep employees, many of whom  tend to hop to a rival firm for   higher pay.

In a panel discussion, representatives of major  call centers were reluctant to disclose their attrition levels, despite prodding from the moderator Rico Hizon of BBC World News.

Fernandez, who works with Accenture, finally came across with a  figure.  He said that based on feedback from CCAP’s over 80 member companies, the average attitition is 55 percent, and “in some companies as high as 80 percent to 90 percent.”

During the open forum, a foreign representative of a start-up company asked why some BPOs offer applicants “double the entry level pay”  and offer a sign-up bonus.  He asked whether “this will lead to a salary war”.

“Where is the restraint in the industry?” he asked.

RETENTION

Attracting and keeping employees remains the top challenge for Philippine contact centers because of the mismatch between companies’ efforts to reduce costs and employees’ desire for higher pay, an expert from a human resources consulting firm said.

Basic monthly pay was cited as the number one reason contact center agents leave their companies, with some transferring for as little as a P300 difference in guaranteed monthly take-home wages, said Patrick Marquina of Towers Watsons Philippines in a session on employee retention and compensation on day 2 of the conference.

“This presents a “misalignment” between an organization’s need to manage costs and its employees’ demand for higher wages.”

Marquina said retention is a “perpetual problem,” not just locally, but all over the world, unaffected by changing economic conditions.

“For companies, ultimately it comes down to ‘the give’ — what they are willing to pay — and ‘the get’ — what value and commitment they can expect from employees,” he added.

The “war for talent in an increasingly crowded” market had driven companies to other locations that are less saturated but can still deliver a large pool of potential employees.

When the ASEAN becomes an integrated economic bloc by 2015, this could mean greater business competition from other countries, such as Vietnam, although the Philippines’ large English-speaking population still offers a competitive edge, he said.

IMAGE PERCEPTION

CCAP chairman Raffy David, in his final remarks at the conference on Friday, said  “The biggest challenge remains our talent supply.”

Better education is needed, as well as a change in “image perception of parents of our employees and the would-be applicants,” said David.

He was referring to the “misconception” that working in a BPO was a temporary, dead end job and not a career.

With over 500,000 BPO employees in the country, the industry is a hungry employer for university graduates, as the Philippines dominates the global field for voice contact services.

BE PROUD

“We should be proud of our role in society.  If we can start being proud of what we are achieving, then this will be bigger than any program (in CCAP) that we do,” said David, who urged member companies to be active in the organization.

Sen. Alan Peter Cayetano, the closing keynote speaker, said Filpinos should be proud of working in a call center, just as Filipinos are proud of nurses and medical workers abroad.

“We are talking about having jobs in the country where you can earn higher and stay close to your family,” said Cayetano.

He said the BPO industry is fueling other economic activity  such as retail and construction.

“Most of the buildings  under construction are for call centers and when there are call centers in the area, other businesses like coffee shops and fast food chains open and create more indirect jobs.” Cayetano said that there used to be just the OFWs or Overseas Filipino Workers who were considered catalysts of change but now there are two – OFWs  and call center workers.

“You’re changing the world.  Keep at it.  You’re a blessing,”  Cayetano told the conference.

PRIDE

This, too,  is a frequent theme of  CCAP president Fernandez, who said the biggest contribution of the industry is the transformation of the “image” of Filipinos in the world stage.

Where before the Philippines was associated as having the “most corrupt” political  leaders or being “the most dangerous place” for journalists, the country is considered today by experts as the no. 1 destination of contact center professionals, he said.

He said this window of opportunity should be valued:  an economy on the upswing and a generation of “young, highly educated graduates with an affinity to  US culture, connected to the world”.

“We’re changing the face of the Philippines,”   with the  reputation of BPO workers, said Fernandez.

“Filipino knowledge professionals are the best in the world.” With a report from Writer’s Edge