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BPOs scale down jobs goal from 1M to .7M

Written by Max V. de Leon / Reporter
Monday, 26 January 2009 00:30
THE target of the outsourcing and offshoring (O&O;) sector to employ 1 million people by 2010 is no longer achievable with the crisis undercutting its robust growth, according to Canadian-based ICT research and advisory firm XMG Inc.

With various segments of the O&O; sector getting hit by the global economic slowdown, sector leaders have downgraded their growth projection for the industry to 26 percent this year from the original 34 percent, Lauro Vives, founding president and chief analyst of XMG, said.

With this, Vives said the 2010 goal set by the Business Process Association of the Philippines (BPA/P) to have 1 million employees is no longer achievable mathematically.

At the maximum, he said, XMG is projecting the Philippine business- process outsourcing (BPO) sector to have 650,000 to 700,000 employees by 2010.

The soonest that the 1 million jobs target can be achieved, he said, is in 2012.

Even the prime movers in the BPO sector, Vives said, are beginning to accept it, although they are still making this pitch in promotional campaigns to exude more confidence and bullishness in the industry.

"I think they are coming to the realization that the 1 million will not be achievable, and that is already being confirmed by other associations, especially now with the crisis," Vives told the BusinessMirror at the sidelines of the launch of the eServices Global Sourcing Conference and Exhibition over the weekend.

Vives said there will be a slowdown in the traditional BPO areas, particularly voice customer care.

To be hit, he said, are those outsourcing companies servicing clients in the financial and capital markets, manufacturing and travel.

"The original growth projection for O&O; last year was about 34 percent, but because of the economic downturn, we had to adjust it to about 26 percent. But those numbers are still very good, considering that the total ICT growth that includes IT is only about 6.9 percent, so the BPO segment is still very attractive," he said.

Expected to grow, Vives said, are those in the captive segment. These are the companies like Dell and HSBC, which service the needs of their own clients and requirements of their own companies.

SC Johnson, for instance, will hire 200 workers in the Philippines to consolidate its global back-office operations in financial and accounting in the country.

Trade Senior Undersecretary Thomas Aquino said the Philippine O&O; sector has built the right fundamentals to withstand the crisis, and its achievements last year have put it in a good position to catch up on new opportunities in the services sector.

The eServices this year, Aquino said, is meant to keep the Philippines in the minds of global businessmen as an ICT/BPO powerhouse of the world.

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