A fight for the fate of work: As gov't nixes WFH, BPOs say hybrid is the future

Jessica Fenol and Art Fuentes, ABS-CBN News

Posted at Mar 28 2022 08:54 AM | Updated as of Mar 28 2022 10:24 AM

People doing remote work in a cafe in Quezon City on June 18, 2018. Mark Demayo, ABS-CBN News
People doing remote work in a cafe in Quezon City on June 18, 2018. Mark Demayo, ABS-CBN News
  • Many BPO employees want to keep working from home, but the government wants firms to get their employees to return to their workplace by the end of the month or risk losing tax perks. 
  • The government said the return of employees to their workplaces is necessary for the economy’s recovery as this will boost consumption in the areas where BPOs are located.
  • Major business groups back the government’s call for return-to-workplace.
  • IBPAP, an industry group, has asked the government to consider hybrid work, saying this is needed to keep workers satisfied and the industry growing

MANILA - Since early 2020, content moderator Shiela has been able to save P5,000 per month as her company implemented a work-from-home (WFH) policy.

Like many other industries, business process outsourcing (BPO) firms shifted to the work-from-home arrangement to ensure continued operations amid the disruptions of the COVID-19 pandemic. 

Sheila, 24, said she is grateful for the switch to remote work. 

"It helps me to save money because I am no longer paying for rent and transportation," Shiela, who asked to keep her company details confidential, told ABS-CBN News.

But aside from the savings, the young BPO worker who is now based in Ilocos Sur instead of their office in Taguig, said freedom from traffic and stress has also done wonders for her mental health. 

"We also have more time with ourselves and for our family, especially those who are working from [the] province," she said. 

Michelle, a 28-year-old reservation sales specialist, agrees. The mother of one said after working in the office for 5 years, she feels more at ease with the Work From Home arrangement.

"Working from home is much more comfortable for me, especially since I'm a mom. It gives me more time for my family," said Michelle. 

Like Shiela, Michelle said the savings from her WFH setup was also substantial.

"I'm able to save and buy more groceries not just for my own family but also for my parents," she said. 

BACK TO BASE

But work-from-home is about to end for BPO workers like Michelle and Sheila. After March 31, they may have to go back to their offices.

The Fiscal Incentives Review Board, which grants tax perks, has said WFH arrangements for registered IT-Business Process Management firms would only be allowed until the end of March.

IT-BPM firms enjoy incentives such as an income tax holiday or a 5 percent special corporate income tax in lieu of all taxes, such as the VAT, income tax, and local business tax. 

But the Department of Finance has said that to enjoy these tax perks, these firms also have to comply with Section 309 of the Tax Code, which says that these companies “shall be exclusively conducted or operated within the geographical boundaries of the zone or freeport.” 

In other words, these firms need to move their employees back to their offices or risk paying higher corporate taxes.

The government has denied earlier appeals for the remote work extension and pushed for "physical reporting" to offices especially those within ecozones and free ports. 

Finance Secretary Carlos Dominguez said the workers' return to office would pave the way for the recovery of micro, small and medium enterprises that depend on the sector.

Big business groups and firms have backed the government’s policy.

In a joint statement, major mall operators Ayala Land, SM Prime, Megaworld as well as restaurant group Resto Ph said the government’s policy was “a significant step to the country’s journey to post-pandemic recovery.”

The Philippine Chamber of Commerce and Industry, the Financial Executives Institute of the Philippines, and the Management Association of the Philippines, also signed the statement.

“We look forward to heightened business activity which will benefit the entire nation and spur its return to economic wellness,” the major business groups said. 

HYBRID WORK

Many BPO workers are not happy with the government’s decision. 

"I'm really disappointed. Aren't we working in the BPO industry contributing so much already since the start of the pandemic? I think it is really unfair for us, especially since we're able to contribute even though we're not working in the office," Michelle said. 

The IT and Business Process Association of the Philippines (IBPAP), a group representing some of the biggest BPO players in the country, is backing its workers. 

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IBPAP president and CEO Jack Madrid has said that while they support the full reopening of the economy, they also see merit in continuing to allow employees to work remotely, even for just part of the workweek. 

“But as IT-BPM employees have an overwhelming preference for a balanced, hybrid work arrangement, we are working with our government partners to provide the industry a smooth transition to onsite operations towards a WFH/Hybrid model in the longer term," Madrid said. 

A study last year said that almost half of workers who had the WFH option preferred to shift to a hybrid work setup.

According to the 2021 PhilCare Wellness Index, 48.7 percent of employees prefer hybrid work arrangements, 35 percent were willing to go back to their workplaces, while 16 percent want to work entirely from their homes. 

Optum, a healthcare BPO that employs 19,000 people across the Philippines, said that up to 70 percent of its employees worked remotely as of early March, and that the company is comfortable with a remote work setup. 

Its officials also said allowing a hybrid work setup is important to keeping their “talents”-- an industry term for highly skilled and specialized workers
-- happy. 

“I think it’s the future for us. Ultimately, this is about what the talent requires what the talent needs,” Optum Philippines Managing Director Ivic Mueco said during an online briefing.

FUTURE OF WORK?

Even as the COVID-19 pandemic moves to the rearview mirror of public consciousness, many companies, especially in the BPO and tech sectors, see remote work becoming part of how they do business. 

In the US, tech giant Google initially wanted all of its employees to go back to the office once the pandemic faded. But early March, Reuters reported that Google would implement a hybrid work setup where employees were required to report to the office only thrice a week. 

There are economics studies too that say that working from home can lead to a boost in productivity. 

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“The future of work is happening now and I think what makes our industry unique is that it is work that can actually be performed from anywhere,” Madrid said during an interview with ANC. 

Madrid also argued that hybrid work is the “future” in another sense, as it is key to keeping the Philippine IT-BPM industry competitive and growing. 

With many highly skilled workers not keen on purely office-based work, a hybrid setup is seen as key to keeping the talents in the industry, as well as attracting new talents.

IBPAP, Madrid said, is optimistic about the growth of the industry this year. 

In 2020, despite the pandemic, the industry booked $26.7 billion in revenues. In 2021, the second year of the pandemic, revenues grew to $29 billion, with 100,000 new jobs added to the sector.

“I think our only constraint is really the ability to provide the talent and serve this growing demand,” Madrid said. 

Mueco, meanwhile, has said that a work-from-anywhere setup also “democratizes” where a BPO like Optum finds talent. 

“You want to tap a talent in Zamboanga, Davao or Jolo or Benguet? As long as internet connection is stable, we can tap talent anywhere in the Philippines,” Mueco said. 

For Michelle, a hybrid work arrangement is better than the onsite option.

"I can consider the hybrid working setup. But still, I'm gonna choose to work at home so I can enjoy working together with my family," she said. 

The IT-BPM industry is estimated to directly employ some 1.4 million Filipinos.

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