South East Asian BPO faces talent challenge: Tholons Study

January 18, 2012: According to Tholons, a consultancy firm, the business process outsourcing in the South East Asia faces the challenge with the talent pool. It also predicted that niche specializations of the industry will continue to expand.

The study observes that responding to the talent pool shortage is an urgent issue in the region’s Information Technology and Business Process Outsourcing industry. This issue should be urgently attended to further drive the growth of the industry. The observations were made in the executive summary of the study that was published yesterday.

Addressing the issues gains importance as the industries in the west are resorting to huge cost cutting measures as a result of the recession in these regions, which in turn drives the companies to outsource their business functions to service providers in Asia.

The consulting firm said that the BPO companies are facing trouble in hiring and retaining competent employees, thus leading to higher employee turnover rates and an increase in hiring and retention costs. This has resulted in increased initiatives by service providers to train fresh graduates or re-skill employees, which is becoming increasingly expensive these days. The firm observed an initiative aimed at skill development which is now being undertaken in manila is required to improve the talent supply in the country.

The Technical Education and Skills Development Authority (TESDA) of Philippines, has been offering finishing courses for candidates who wish to pursue a career in call centers.

Even though the area faces problem with talent acquisition, Tholons observes that niche specializations are expected to expand. The firm predicts that the niche specialization in the area will continue to grow and will lead to the development of high value services in South East Asia. It says that the countries in the region have been creating their own outsourcing identities in 2011.

Philippines is considered as a favorite location for outsourcing contact support services, while Singapore and Malaysia are well known as locations for outsourcing financial and accounting services and back office activities. Vietnam and Indonesia are also emerging as favorable destination for Information Technology outsourcing.

Tholons says that as the industry becomes mature and as confidence is built up, process and delivery innovation will follow. It is predicted that the industry will generate revenue to the tune of USD 25 billion by 2016. The industry had generated revenue of USD 9 billion in 2010 which was expected to generate revenue of USD 11 billion in 2011.

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