The growth of the Philippines’ information technology-business process outsourcing (IT-BPO) industry is expected to be flat this year as the gap between talent supply and growing demand remains a challenge.

Lauro Vives, founding president and chief analyst of XMG Global, told Malaya Business Insight that the local BPO industry’s expected growth will be flat between 19 percent and 21 percent for 2012.

For 2011, the Business Process Outsourcing Association of the Philippines (BPAP) estimated that the industry must have grown 20 percent.

The challenges that the BPO industry will face this year will center on talent, Vives said.

Vives said there is a trend for companies to recruit from other countries to fill higher positions because as the industry matures towards higher-value services, they look for quality workforce fit to handle the complex job.

“The hiring of qualified talents will be the major concern as the industry matures towards higher-value services. There is now a genuine trend for companies to recruit from other countries to fill higher-value positions,” Vives said.

He added that the alarming migration of experienced local IT talents to Asean countries, particularly Malaysia, may affect the supply of talents in the country.

Vives further said that the cost of labor in the country is expected to double, driven by the shortage of talent.

“Labor costs grow between 5 and 12 percent annually. Although from 2010 to 2012, benchmark results show that the cost of labor in the Philippines continues to remain competitive across offshoring nations,” Vives said. XMG further forecasts that by 2015, the number of college-eligible high school graduates would decline by 1 percent over five years due to the high attrition rate among students in the primary and lower secondary school system.

However, the global crisis is unlikely to have an impact on the local call center industry.

“The sovereign debt crisis in Europe is unlikely seen to affect the call center industry in the Philippines. Although Europe’s revenue contribution is slowly rising, its impact on the country’s revenue is minimal,” Vives said.

The crisis in Europe, however, “can also be a defining moment for the Philippines to attract further investments from Europe,” Vives said.

At present, the bulk of BPO industry clients is in the US with about 70 percent.

To date, in every 100 applicants, only 5 to 6 are qualified to handle complex jobs in a call center company.

BPAP had signed a memorandum of cooperation with the Commission on Higher Education (CHEd) for a five-year partnership.

Both groups aim to revise college curricula, provide training programs for teachers, and evaluate student graduates’ skills.

There is also a proposal to include “BPO 101″ to the core curriculum.

Through partnership with TESDA, English teachers will be trained to develop their competencies.

The BPAP will also establish a standard test for college graduates who want to enter the call center industry through a global competitive test (GCAT).

The IT-BPO Road Map 2011-2016 study developed by a joint venture between Everest Group and Outsource2Philippine in conjunction with the BPAP, showed the IT-BPO industry revenue is projected to reach $20 billion or 900,000 jobs by 2016, from the present $9 billion or 500,000 jobs.

Source:http://www.malaya.com.ph/01232012/busi3.html