Skills development in the IT-BPM sector
(Part 1)
If there is an industry sector in which an optimistic or aggressive growth scenario can be sustained, it is the information technology and business process management (IT-BPM) sector.
Recently Jack Madrid, President of the IT and Business Process Association of the Philippines (IBPAP) told this newspaper that the industry expects to create an additional 1.1 million jobs by the end of the Marcos Jr. admin-istration from its present 1.7 million.
Already this sector, that has been extremely resilient in times of crises (pandemic and global recession), is earning some $40 billion for the economy representing some 10% of our GDP. In no time at all, its earnings will sur-pass the remittances of our OFWs (overseas Filipino workers) that are growing at a slower pace of 3-5% annually. Annual growth of 6% or more is within range for the IT-BPM sector, especially with prospects of our market diver-sifying from its heavy dependence on the US towards the European Union (EU) after the Philippines and EU earlier this month formally resumed free trade agreement (FTA) negotiations, seven years after stalling because of concerns over the human rights record of then President Rodrigo R. Duterte. In fact, the industry leaders are embarking on an industry rebranding initiative that targets total direct earnings of $59 billion by 2028.
Just recently, the Philippines’ IT-BPM industry was recognized as the home to some of the Philippines’ Best Workplaces 2024, an award given on March 19 by Great Place to Work that cited the IT-BPM companies for their excellence in workplace culture.
The industry has a place for large companies with tens of thousands of workers such as award-winning Synchrony, Accenture, Lexmark Research and Development Corp., Teleperformance, Capital One, DXC Technology, and CGI Philippines. Among the award winners in the Medium Category were Via Appia Philippines, Inc., GM Philippines, Inc., Lingaro Philippines, Inc., Amadeus Marketing Philippines, S. C. Johnson Philippines ROHQ, and Thumb-tack Shared Services Philippines, Inc.
The industry also makes room for small enterprises, especially as more and more millennials and centennials prefer to do freelance work based in their homes. In the Small Category, among the winners was Limitless Contact PH, Inc.
Even the larger corporations will benefit from the young workers’ preference to work from home. That is why officials of IBPAP are supporting an amendment to the Corporate Recovery and Tax Incentives for Enterpris-es (CREATE) to allow IT-BPM employees to work from home. This work flexibility will help the large- and medium-sized corporations in employee attraction and retention. It will also enable more free lancers to use their talents, especially in the creative industries, to work in the IT-BPM industry. In giving his support for this amendment, Mr. Madrid commented that “the future of work is about flexible work arrangement. It has been well proven that the services being performed by our 1.7 million strong workforce can be done in a hybrid environment.” He added that the main challenge to the industry is to find enough skilled talent to meet the expanding demand.
Like other industries encountering difficulties in employing products of our schools who have the appropriate skills or talents that are in demand (there is a serious mismatch), the IBPAP has been for some time calling for the upskilling and retooling of the existing workers of the sector. At the height of the pandemic in 2022, the National Skills Mapping Survey (NSMS) revealed that preparedness of graduates for the knowledge-based (in contrast with the contact centers that account for some 60% of the entire sector) segments of the industry like animation, game development, software industry and health information, is low. There was a call for strengthening indus-try-academe linkages so that globally competitive workers can be trained in more appropriate work-study programs. The NSMS was an initiative of the Board of Investment (BoI) and the Commission on Higher Education.
In presenting the results of the Survey, Ana Maria Bongato, an HR practitioner for more than two decades and former Executive Director of Talent Development of the IBPAP, commented that the industry has been changing at a very fast pace, particularly during the pandemic when people were working in the comfort and safety of their homes. In her own words: “We have to work faster and together… companies must continue to intervene to prepare new hires for actual work to be done… quality of talents needs to be addressed for us to be competitive.”
In fact, since the NSMS was completed, there have been significant increases in the demand for workers who are highly skilled in the newer applications of artificial intelligence (AI) and big data. From my own experience as an educator, I have seen a big demand for courses on data analytics as a response to the establishment of data centers within large financial institutions and as independent businesses. In my own university, the University of Asia and the Pacific, a new masteral program in business analytics has been attracting an ever-bigger number of students and more and more business enterprises, especially from the banking sector, have been partnering with our university in work-study or apprenticeship programs that provide our students opportunities for on-the-job training. Needless to say, these masteral students in business analytics have no problem finding a job even before they graduate.
Ms. Bongato also provided a very important insight into how to upskill and reskill some of the existing 1.7 million workers of the industry so that they can move to jobs within the same industry that would require higher knowledge-based skills. It is inevitable that those now employed in the contact centers (who still represent most of the 1.7 million labor force of the industry) will be made redundant by AI. The work of a customer relations agent is the easiest to automate through AI or robotization. A good number of these redundant workers can benefit from what Ms. Bongato suggested: “Soft skills continue to be one of the main concerns of the sectors, which include the following: communication, work ethics, problem-solving, and critical thinking.”
A good number of those working as call center agents are college graduates with degrees in such areas as nursing, accounting, education, and business administration. Their academic preparation could have been seriously lacking in the liberal arts courses for which the best Philippine universities like UP, Ateneo, De La Salle, UST, etc. are famous.
I am reminded of a reskilling and retooling effort that SGV conducted in the 1970s with their accountants. Under the leadership of then Head of Management Services Robert V. Ongpin (who subsequently became Min-ister of Trade and Industry), an industry-academe partnership (of which the original CRC Graduate School was part) offered a liberal arts upskilling and retooling course to some of the top CPAs who did not have the op-portunity to take a liberal arts program. Together with some UP professors, we tutored the SGV accountants in the fields of Literature, History, Social Sciences, Mathematics, and the Sciences to upgrade their ability for critical thinking, effective communication, and the ability to relate the various human disciplines to one another. With hindsight I must say that this was a successful effort in upskilling because I saw many of those whom we tutored rise on the management ladder, not only of SGV, but of some of the top corporations of the country.
As UA&P, we did the same thing for some employees of the Canadian IT-BPM company, Telus. Some of their more promising employees took liberal arts courses in our university or we sent some of our liberal arts professors to conduct classes or workshops on their premises to select workers.
(To be continued.)
Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.
