To Sustain Competitiveness, Cebu must keep business costs at bay

By Ehda M. Dagooc (The Freeman) Updated July 14, 2011 12:00 AM

CEBU, Philippines - Aside from pursuing strong collaborative efforts to provide enough manpower supply for the growing demand of Business Process Outsourcing (BPO) companies, Cebu is also trying to keep the cost of doing business to sustain its competitiveness.

“What’s the use of having brilliant Java programmers, and highly skilled manpower pool, if we are going to charge even higher than those in New York? We have to compete in sustaining the cost of rentals, manpower, and others,” said Cebu Investment and Promotions Center (CIPC) managing director Joel Mari S. Yu.

According to Yu, for Cebu step up its position as one of the world’s top 10 “Emerged BPO destination,” it has to seriously leverage on the cost. This means, that rental rates and employees’ pay should remain competitive, otherwise, prospective investors will consider other destinations, which are also trying to get a chunk of the multi-billion-dollar BPO market.

“The one that will break the decision of an investor is cost,” Yu emphasized.

He said building developers attracting BPO companies should consider its rental rates, that should not level off with Metro Manila, and other “emerged” BPO destinations, so that Cebu can sustain its niche, and move up to the higher rank in its positioning.

During the recently concluded “ICT and BPO Summit,” BPO stakeholders revealed that manpower supply is one of the primary problems faced by the industry today.

Cost, of doing business however, came as secondary concern by BPO stakeholders-- the immediate need now is how Cebu can supply the fast growing manpower requirement of expanding BPO firms, as well as companies that plan to operate in Cebu.

Butch Sison of Convergys said that about two-thirds of the company’s clients are pleading to be serviced from its Cebu operation. However, Convergys had to turn down these clients whom Sison described as “pleading to be here (Cebu),” because of manpower shortage.



Thus, these clients had to be sent to its Manila operation. This could supposedly provide about 1,500 jobs.

“The challenge now of the BPO industry is not how to grow, but how to minimize the lost of opportunity cost,” Sison said.

Jojo Ligan of the Contact Center Association of the Philippines (CCAP) said that the Philippine BPO industry could probably reach the 50 percent growth, but its projection is lowered due to the obvious problem of manpower scarcity.

“There are a lot of BPO companies that wanted to expand, but we couldn’t provide them the manpower requirement,” Ligan stressed.

Sison added that Cebu for instance, because of its strength to invite BPO companies, existing BPO stakeholders had to get their manpower needs from the neighboring regions and provinces.

CCAP said that the BPO sector in the Philippines is still facing low hiring rate condition, as record showed that out of 100 applicants in the BPO sector only 20 percent to 30 percent can be hired.

Despite this problem, of which industry players said that it’s not only unique to Cebu, but a nationwide problem.

However, industry players, are hopeful that Cebu could immediately address the manpower supply deterioration, because considering that the province is known for its active public-private collaboration, which primarily brought Cebu to where it is now in the ICT worldwide map.

Yu, said aside from addressing the manpower, sustaining a lower cost of doing business in Cebu should also be taken into serious consideration. - THE FREEMAN