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Homegrown startups tap into Philippine outsourcing boom

MANILA -- The offshore outsourcing industry loves the Philippines. English is widely used there, the population is generally well-educated and wages are low -- all reasons why the country is a magnet for overseas companies looking to farm out administrative and other tasks.

     The booming industry raked in $13.34 billion in the Philippines last year, up 15% on the year, according to the country's central bank. A survey by global outsourcing consultancy Tholons found that Manila has overtaken Mumbai as the world's No. 2 business process outsourcing (BPO) destination. Call centers account for most of the country's outsourcing activity, but the industry is diversifying. New types of startups are popping up to capitalize on the various opportunities arising in this growth sector.

Helping the underdogs     

One such company is Bagosphere. Launched last year in Bago City, in Negros Occidental Province, it specializes in providing training for people hoping to work in the industry.

     Social responsibility is a big theme at the company. One of its aims is to empower young people from rural areas and marginalized segments of society by providing a "study now, pay later" program that also covers equipment and transportation costs. According to the company, nearly 90% of its graduates land jobs at call centers within two months and earn four times what typical unskilled jobs pay.

     Zhihan Lee, co-founder and CEO, says students are taken through the same tests and evaluation processes that BPO companies use for hiring. The startup has four outsourcing partners so far, major call centers Teletech, Teleperformance, Transcom and Panasiatic.

     Bago means "new" in Tagalog, and Bagosphere's founders say this is fitting because they are employing a new model for helping young people living outside big cities. "Rural youths form a large base of untapped talent in the country," says Lee. "Helping people in this segment start their careers will enable them to pursue professional and personal development goals far beyond their capabilities if they are otherwise left untrained."

     Another company exploring the outsourcing industry from a staffing perspective is Kalibrr, which helps businesses in the sector find suitable employees through its online platform.

     Employee burnout is a big problem in the industry. Call centers have one of the lowest staff-retention rates in the country, with 55% of employees leaving each year, according to a 2013 study by the Call Center Association of the Philippines.

     Paul Rivera, Kalibrr's co-founder and CEO, says many people in outsourcing jobs quit after only a couple of months because they do not like the work or it is not what they were expecting. Kalibrr is trying to help reduce the high turnover by improving the assessment process for job candidates.

     "An assessment should be used not only to measure a candidate's proficiency in skills that are important for a job, but also to profile candidates so they are matched to jobs they can succeed in," he said.

     Kalibrr started as an online training platform for improving the English skills of people aspiring to be call center agents. Today, it has evolved into a cloud-based skill-assessment and job-matching system. Outsourcing companies direct job candidates to the website, where they can take aptitude tests designed to help determine, for example, whether a candidate is better suited for a job in a call center or for doing back-end accounting work. The assessment process also helps find out whether an individual is able to work night shifts for extended periods -- a common practice at call centers and a big reason why they find it so hard to retain staff.

Creative accounting

A company called PayrollHero, based in the Makati area of Metro Manila, is among the growing number of companies handling back-end administrative processes for clients who would rather just focus on their core competencies.

     Payroll Hero automatically calculates salaries for each pay period based on an employee's working hours and deductibles, says co-founder and Stephen Jagger. For many companies, this is done either through manual entry or, increasingly, through time-tracking methods based on biometrics, such as fingerprint scanning. With PayrollHero, employees can clock in at the workplace by taking a "selfie" with a smartphone or with a computer webcam.

     The system records attendance through images, computes salaries at the end of each pay period, then instructs the bank to make money transfers. PayrollHero also uses the data to study and track productivity. The facial recognition system can help determine employees' moods, which it then correlates with other factors, such as employee output, company output, traffic and even the weather.

     The emergence of companies offering better training approaches and innovative technologies for the outsourcing industry will likely help make the sector an even more important growth engine for the Philippine economy.

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About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

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