Why staff turnover in Philippine BPO industry is falling

ABS-CBN News

Posted at Feb 18 2015 12:46 PM | Updated as of Feb 19 2015 05:53 PM

MANILA, Philippines -- Staff turnover has always been a big concern for business process outsourcing (BPO) companies in the Philippines.

But it seems that many BPO companies have found new ways to keep their employees.

A recent survey by global professional services company Towers Watson showed that the staff turnover rate in the Philippine BPO industry has fallen to 20 percent in 2014, the lowest since 2007.

This is an improvement from the 33 percent, 24 percent and 26 percent attrition rates in 2011, 2012 and 2013 respectively.

Vangie Daquilanea, Global Data Services Practice Head of Towers Watson Philippines, noted the BPO industry has adopted various strategies in talent acquisition, such as expanding operations outside the National Capital Region (NCR).

"The sector, though fast-growing, has adopted various strategies in talent acquisition... to tap talent in Cebu, Davao and Southern Luzon. This has, in turn, minimized talent movements within the NCR, registering the lowest attrition rate in the last seven years," she said.

The Towers Watson survey also showed salaries in Central Visayas are about 23 percent lower compared to salaries in the NCR.

"(This makes Central Visayas) a viable location for BPO companies to operate in. This further supports an international research on the top global outsourcing destinations, identifying Cebu in the top 8," the company said.

Higher salaries

Another possible reason why BPO employees are staying with their companies is the increase in salaries.

The Towers Watson survey showed salary increases in the BPO industry in the Philippines averaged 7 percent in 2014.

Salary increases in the industry are expected to be stable at 7 to 7.5 percent increase in the next two years.

"The companies budgeting for this salary increase rate typically use a performance matrix where exemplary performers are greatly rewarded, and non-performers are given zero to minimal increases. This is being done by companies to give emphasis on their compensation principle of paying for performance," the company added.

Employees in the outsourcing sector usually have a compensation mix where they receive high guaranteed compensation and a minimal annual performance bonus equivalent to about 1 month to 1.5 months' pay.

BPO employees are also being taken care of by their employers. The Towers Watson survey also shed light on the benefit programs of BPO companies, which have some of the most robust health and wellness programs.

Companies offers various programs for employees such as stress/risk assessment programs, health screening, counselling, fitness competitions, and smoking cessation programs.

Towers Watson’s annual BPO/Shared Services/Call Center Industry Total Rewards Survey is the largest compensation survey report in the Philippines. Eight companies, including those from IT, knowledge process and business process outsourcing sectors, participated in the survey.

"Our survey contains comprehensive analysis and findings that provides insights into current compensation practices and trends in the industry, helping companies make informed decisions about total reward programs for its employees," Daquilanea said.