In a March 2013 briefing* for business process outsourcing industry stakeholders, participants identified a number of risk factors for Philippine BPOs. On top of the list were talent retention and development, as well as the relative strength of the local currency that was viewed as exacerbating the issue of rising operating costs. Meanwhile, among priority “ecosystem” concerns were investment incentives and the legal and regulatory framework.

This bulletin organizes brief articles on points of interest for BPOs and investors in the industry, including a summary of current incentive programs and a Department of Labor and Employment (DOLE) issuance meant to address special aspects of employment in call centers and other BPOs.

*IBPAP-02P CEO Briefing: Taking Care of Business, 2013 IT-BPM Industry Outlook, held on 19 March 2013.

When management of local outsourcing companies call their lawyers, a number of topics are raised more than most. Some of those concerns are noted below, as well as practical suggestions for persons (especially foreign investors) eager to avail of the competitive advantages of a Philippine-based BPO.

Worry: Human resources are key to successful BPOs and the Philippine labor force is, as a rule, talented and reliable. But it’s important for companies to understand the legal framework of their dealings with employees and even independent service providers. For instance, some foreign investors are surprised that employees cannot simply be let go, and that termination of employment needs to follow a particular procedure, otherwise the dismissal could be considered unlawful. Other new companies offer significant compensation packages at the very start of operations not realizing that they may not be able to scale these back later on because of the local legal regime’s principle of non-diminution of benefits.

Suggestion: BPO companies should...

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