India and Philippines – The BPO Home War

This IT revolution and easy access of internet has made the world business very challenging and revolutionary. India is considered to be back office of the world and internet is not a rare phenomenon here. Companies outsourced there work to India as a preferred location, but now other locations also are providing the back-office space to the companies.

Philippines are one of the many countries which are giving India a tough competition in terms of getting the back office business. As per the reports about 250 companies have set up there offices in Philippines. But the major part of there outsourcing shares comes from Voice based services. It is claimed that there accent is very close to the US accent, even though they are in Asia. So, the question comes is – Is Philippines the new BPO home? We will try to answer this below.

Voice Accent – India is a multilingual country with Hindi as its National Language. In India, majority of people know, speak and write more than 1 Language. English is also a language which is known to a vast population. The more than 1 language edge enables the Indian population to be flexible with learning the different accents and foreign languages. Philippines accent is close to American accent and about 20,000 people speak Spanish also, but the Spanish speaking population is aged. As compared to Indian neutral accent, people in Philippines have an accent which is similar to Americans but due to this high resemblance, it’s difficult for them to adopt or learn to any other accent as all business is not from US. On the other hand, India produces around 20,000 foreign language speaking professionals every year.

Infrastructure Base – India is 7th largest country in the world in terms of land area while Philippines stand at 72nd position. In India, there are many locations where industries and offices can be set-up and abundance of Manpower is also there as India holds the second largest population of this world while Philippines has got 72nd rank in world population. So India is a better choice in this regard also. India is 33rd in population density while Philippines are on 32nd position, so India has more space for industries and offices.

Climate – Climate wise India has got a mixed climate. It has got Himalayas in the North and East, desert in west while ocean in the south. So, it’s a pretty diverse and non-monotonous climate. While Philippines is a collection of 7,107 islands in the Pacific Ocean, and to add it’s mostly a mountainous region which is covered with tropical forest and volcanic mountains. The country also lies within the typhoon belt of the Western Pacific and about 19 typhoons strike per year. So, India encounters lesser number of natural calamities every year.

Literacy – In Literacy, India stands at 60.3% while its youth literacy rate is 71.3%. Literacy was 92.6% in 2003, which is more than of India. If calculated in terms of numbers, Philippines has a literate population of 82,020,092 while India has 619,290,194 so in this also, India shows an edge. Moreover UNESCO and India have set the target together for 2015 for a 100% literate nation.

GDP – Per capita GDP of India is $977 (132nd) while for Philippines it is $5,365.287(99th) which means that Philippines may prove to be expensive in terms of cost. And due to higher abundance of skilled talent, India proves to be a cheaper generation.

Economy – Indian economy has been repeatedly rated by the many economics experts as one of the most promising and growing economy with good amount of stability while Philippines is still to be considered. So, India is a set market with lesser number of risks.

VISA – Indian VISA rules are easy and flexible. For foreigners to come and work with a work visa is not a tough job. Philippines VISA rules are not that flexible. Indian hospitality is world known with quite a good number of tourist locations as well.

These are few of the points on which it can be judged which is a preferred outsourcing location, but this series will continue…

Employee Retention Tools

In the present scenario, world is turning into a global village and the whole globe is reachable from any destination. In this small world even companies are reachable to the people and vice versa. And so their jobs are also easily accessible for everyone. In this situation, the biggest challenge for a company is to retain its workforce intact especially the Knowledge Banks.

All the companies are planning to increase their turnover every moment of time. While in all this workout of increasing the turnover they forget about their loss incurred by the resignation of employees and the expenses of hiring new employees (Hiring Cost, Training Cost, Productivity Loss etc.). This hiring of a new employee normally costs around 35% or more of the average employee salary. For example- let us consider average salary of an employee per year as Rs.20, 000, and then the cost of hiring a new employee and other expenses come around Rs.7, 000. If you have 2 employees resigning per month the cost comes to Rs.14, 000 and taking the same for 12 months comes to around Rs.168, 000, which is a direct loss from the turnover of the company. And after all this there is always a risk of getting a right employee for the right position with a right attitude.

If an employee resigns, then good amount of time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed। And even after this you cannot assure us of the same efficiency from the new employee (He might be better and might not be)। You require time to judge his capabilities and work nature। The loss is even graver if he/she is Your Knowledge Bank, this can bring your process to a stand still even. And above all these things, one resignation many a times triggers a chain reaction among other employees, leading to a negative effect.

For all these and many other reasons you need to retain your employees. For retaining your employees, you need to understand the requirements of the employees and at the same time should make them clear about the expectations of the company from them. It’s a general human tendency that each human being thinks himself as important and expects the same from the other side, so the company management should make their employees accountable for their respective jobs and make them feel that they are very important for the smooth processing of that process(At the same time create a backup for him). Care and importance are two things of which every human being is mad of.

Below are few of the tools for Employee Retention:-
1. Employee Reward Program- You can make a provision of Monthly or Quarterly Award (depending upon the budget) for the best employee, Awarding 2 or 3 best workers each month. The award can be in terms of gifts or money. If it is money then it should be divided into two parts, first part to be given with the next month salary and the remaining after 6 months. In this way he/she can be retained for 6 more months. These rewards shall be considered at the time of appraisal.

2. Career Development Program- Every individual is worried about his/her career. You can provide them conditional assistance for certain courses which are beneficial from your business point of view. Conditional assistance means the company will bear the expenses only if he/she gets an aggregate of certain percentage of marks. And entrance to that course should be on the basis of a Test and the number of seats to be limited. For getting admitted to such program, You can propose them to sign a bond with the company, like they cannot leave the company for 2 years or something after the successful completion of the course.

3. Performance based Bonus- The employee always comes to know about the profit of the company which is of course based on the strategic planning of the top management and the productivity of the employee. To get more work out of the employee, You can make a provision of Bonus. By this employee will be able to relate himself with the company’s profit and hence will work hard. This bonus should be productivity based. You can make sure that this bonus is not adding extra-pressure on the budget of Your Company and you can arrange this by cutting a part of the salary hikes and presenting it to the employees in the form of bonus.

4. Employee Referral Plan- You can introduce Employee Referral Plan. This will reduce your cost (charges of external consultants and searching agencies) of hiring a new employee and up to an extent you can rely on this new resource. On every successful referral, employee can be given a referral bonus after 6 or 9 months of continuous working of the new employee as well as the existing employee. By this you can get a new employee at a reduced cost as well as are retaining the existing one for a longer period of time.

5. Loyalty Bonus- You can introduce a Loyalty Bonus Program in which you can reward your employee after a successful completion of a specified period of time. This can be in the form of Money or Position. This will encourage the fellow employees as well whether they are interested in money or position, they will feel fascinated.

6. Giving a voice to the Knowledge Banks- First of all you should try to retain your workforce intact, as they are the intellectual asset of the company. And above that you can’t afford losing your knowledge banks. These are the people who stabilize the process. You can involve them in some of the decisions.

7. Employee Recreation- You should also let your employees enjoy in a light mood. You can take your employees to a trip or for an outing every year or bi-yearly. You can make use of this trip as well. You can start this trip with an opening note about the management views and plans, strategies etc. At the same time you can involve your top management into some of the fun activities as this will make feel the employees that they are very close to the management and everybody is same.

8. Gifts at some Occasions- You can give some gifts at the time of one or two festivals to the employees making them feel good and understand that the management is concerned about them.

9. Accountability- You should make each employee accountable so that he can also feel that he is as important as his manager. If he/she will be filled with this sense, he/she will seldom think of leaving the company.

10. Making the managers effective and easily accessible- You should make the management easily accessible so that the employee expectations can be clearly communicated to the top management, as it is impossible for the top management to reach each employee frequently.

11. Surveys- You should conduct regular surveys for feedbacks from employee about their superiors as well as other issues like food, development plans and other suggestions. This will make them feel of their importance and the caring nature of the company. Some of the suggestions might be of real good use for the company.

For a company, the workforce is like an intellectual property, both in terms of skills and money. A trained and content workforce can lead a company to new heights while a opposite one can hamper it badly. So, every resignation saved is every dollar earned.