Growth of local BPO sector threatened by attribution:

Though it remains largely unaffected by the global financial crisis, the country’s BPO (business process outsourcing) sector is being hounded by issues associated with booming growth — shortage of available talent and demand for higher salaries. This is according to a recently released report by IT research firm XMG, which noted that the high inflation rate is driving employees to seek employment elsewhere or demand higher wages.

As of June 2008, current inflation in the Philippines has reached 11.4 percent – the highest in more than a decade.XMG said its research revealed that call center, IT, and BPO companies in Metro Manila should brace themselves for increasing sentiments from employees for a salary adjustment as a form of lifeline support to combat inflation. Figures derived from the XMG Employment Lifestyle Index conducted in Q3 2008 indicate that more than 73 percent of the respondents from the total pool of 100 ICT talents working in Metro Manila feel the need to increase compensation from their employers.

"Only 12 percent are currently satisfied with their current salaries. Of the 73 percent, over 70 percent are actively looking for better opportunities within the city or overseas," the report said. Compared to the traditional regular day job, ICT workers are given higher net compensation including night differential, transportation and clothing allowance, food subsidy, and bonuses.

"Our numbers show there is a genuine trend for the constant clamor by employees to increase the cash component of their remuneration," XMG research statistician Emerson Fababaer said. Since the outsourcing industry is likely to grow despite the financial turmoil, XMG said HR practitioners will face the dilemma of addressing the immediate needs of employees to manage attrition.

The study also showed that highly technical professionals such as those in IT and engineering are seeking potential employment opportunity in Singapore, Australia, Canada, the United States and the Middle East to increase household savings."There are very few extrinsic options. Either provide a relief in the form of increased compensation, subsidy or allowance or position the current compensation package as being above industry," XMG chief analyst Lauro Vives said.

Based on client studies it completed in the past, XMG said the prescription that worked in the long run have been performing regular compensation benchmarks combined with the deliberate alignment of both employee attitude and value in building a sense of ownership in the company. "This means a shift from a monetary based attitude to a self-fulfillment outlook," said Vives, who is also XMG’s founder. To raise employees’ level of commitment and overall productivity, the report said organizations ought to frequently review its incentive structure and independently monitor employee perception and behavior to accurately gauge employee sentiments towards the organization.