BPO phenomenon

WHO hasn’t heard of BPO? No, I am not talking of Banco De Oro. That would be BDO, although I am certain that most people know all about BDO and its current domination of the Philippine banking scene.

I am talking about BPO as in business process outsourcing. I would imagine that as many people who have heard about BDO would have also come across a BPO, in some way or other.

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It is hard to miss the ubiquitous structures where these companies are located. In many places where they are, the buildings housing them are prominently clustered together, making them visible for all to see.

In Metro Manila, there are four centers where these BPOs are mostly situated—Makati, Alabang, Eastwood (Quezon City) and Ortigas. Cubao and the area around UP Diliman are also fast becoming magnets for these companies to locate in, thanks to generous incentives from the site’s developers. There are also many centers outside of Manila, like Clark (Pampanga), Cebu, Davao, Baguio and Iloilo.
Or, if someone has not noticed (a bit difficult to believe) these places, perhaps one has a relative or a friend who happens to be connected with a BPO organization. After all, apart from nursing and leaving for abroad, going into a BPO seems to be the career of choice for many of our young graduates.

Generically called call centers (although believe it or not, there are many types of BPOs, and call centers are only a segment of the industry), these companies have attracted a large number of our young working population. By the Business Processing Association of the Philippines’ own estimates, one million of them will have been working in some type of BPO within five years’ time. Had it not been for the global financial crisis, the five years would have even been shorter.

But just what does a BPO do? Well, everything really that a business organization does can be outsourced, or done by a third-party organization. For example, to answer calls from its customers, an American utility company may choose to have those calls answered in the Philippines, instead of in the United States. The advantage is obvious. Each customer service representative in the US probably earns the equivalent of about four or five customer service representatives in the Philippines. So obviously, as long as it takes less than four or five Filipinos to do the job of one American, it makes sense to locate the process here.

The even better thing, of course, is that it does not take four or five Filipinos to do the job. In some cases, it even takes less than one.

How does this happen? Well, by the simple phenomenon called underemployment. Let me qualify this statement by calling it “relative underemployment.”

Why relative? Because in the United States, a customer service representative does not need to have graduated from college to do the job. A simple high school leaver will be fine, thank you very much. Here in the Philippines, however, it is a slightly different story.

People who work in BPOs here have all invariably completed some kind of college degree. For the most part, they would have done something like a business-related, or perhaps communications-related, course. That is a minimum requirement for acceptance to the job.

Happy Christmas to all our readers, and their families and loved ones. May this holiday season be truly blessed for us all!

More next week...
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Published in the Sun.Star Cebu newspaper on December 19, 2009