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Education

With more than 2 million high school graduates yearly, the Philippines has a stable source of manpower. The country also maintains a literacy rate of more than 95%.

The Philippine Educational system continues to churn out graduates which can potentially supply the demand of the industry. For instance, there are 2.4 million Filipinos presently enrolled in College/University education. Of this figure, 557 thousand is related to business administration, 260 thousand to math and computer related, and 352 thousand to engineering related courses. Moreover, there are also 319 thousand College students enrolled in medical and allied courses.

A survey by Kelly Services, Inc. based in Michigan, showed that India is no longer the first choice of U.S. companies looking to setup their offshore backroom operations. The study also cited companies eyeing the Philippines as the better site due to quality. Filipinos enjoy a comparative advantage over American workers since (1) labor costs in the Philippines are a fraction of US labor costs (average hourly wage of US$2.50 for Filipino Call Center Representatives as of August 2013 compared to the minimum hourly rate of US$8.50 for Americans in the same industry), and (2) most BPO workers in the Philippines are college graduates. Many overseas labor outsource entities also prefer Filipinos over Indians when it comes to customer support and customer interaction due to Filipinos' relative ease and familiarity with American culture and US slang.

Employment

The BPO industry in the Philippines has grown 46% annually since 2006. In its 2013 top 100 ranking of global outsourcing destinations, Tholons, a US-based strategic advisory firm for global outsourcing and investments, has ranked the Philippine capital Manila number 3, lifting it 1 notch to knock off India’s New Delhi from number 3 spot in 2012 to number 4 in 2013. The top spots remained unchanged, where Bangalore is first and Mumbai is second. This boom is led by demand for lower labor costs, a highly skilled and educated work force, and high proficiency in spoken English.

Philippine BPO revenues have risen steadily since 2009. In 2012 alone, BPO companies raked in $13.5 billion in revenues, which is 22 percent higher than 2011.  The Philippine BPO industry will continue its upward momentum, with annual revenues seen hitting $16 billion in 2013 as the country remains one of the world's top BPO destinations.  It is expected to further grow in the next three years with revenues reaching $25 billion by 2016 while providing direct employment to 1.3 million Filipinos, and supporting 3.2 million indirect jobs.

On a base line scenario, the BPO industry will need at the least a yearly additional of 45,000 qualified personnel over the next few years.

Call Center Industry Demand for Personnel

 Ratio of Seats to Employees

 Seats

42,000

 Employees

67,000

 Ratio

1.6

 

2010

2011
Est.

2012
Est.

2013
Est.

2014
Est.

2015
Est.

2016
Est. 

 Total Seats

45,000

100,000

130,000

160,000

190,000

220,000

250,000 

 Employee /
 Seat Multiple (X)

1.5

1.5

1.5

1.5

1.5

1.5

1.5 

 Total Industry  Demand

150,000

195,000

240,000

285,000

330,000

375,000 

 Net Addition per Year

45,000

45,000

45,000

45,000

45,000 

 Net Addition per  Month

3,750

3,750

3,750

3,750

3,750 

Ensuring a stable supply of quality manpower will make the local call center business a continuing attractive proposition. In order to this, what is needed is to raise the probability that the College graduate can be hired, and that means raising up the acceptance rate or hiring rate, currently at around 25%. This can be done if CITE Asia Pacific will offer free, high quality supplementary IT education. Assuming that the acceptance rate can be raised to 40% with a CITE Asia Pacific education, the industry will have a steady supply of college graduates for call centers and other outsourcing services at around 80 thousand additions per year.

Hiring Rate, Attrition, and Labor Supply

 

2010

2011
Est.

2012
Est.

2013
Est.

2014
Est.

2015
Est.

2016
Est. 

 College Graduates

 

 

 

 

 

 

 

 IT/Computer Science

70,000

 Business Admin./  Commerce

100,000

 Engineering

35,000

 Total College  Graduates

205,000

209,100

213,282

217,548

221,899

226,337

230,863 

 Acceptance Rate

25%

25%

25%

30%

40%

40%

40% 

 Graduates Trained/  Hired

51,250

52,275

53,321

65,264

88,759

90,535

92,345 

 Less Attrition (15% of  workforce)

10,050

8,543

7,261

6,172

5,246

4,459 

 Net Increase in Available  Personnel

42,225

44,778

58,003

82,587

85,288

87,886 

   

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