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10.12.2006

The Competitive Advantage of the Philippines

As India gets too costly, BPOs turn to Philippines

"HIGH salary and transfer rates in India are making that country less appealing to business process outsourcing (BPO) firms --a trend the Philippines can take advantage of by accelerating information technology (IT) training among students, an executive of a US firm said Monday.

Jim Sanderson, vice president and chairman of applications developer Lawson Software, said India could readily provide large companies with 10,000 people or more with its big number of IT professionals but its BPO costs were rising 15 percent, compared with relatively stable costs in the Philippines.

“We see that small to medium sized companies looking to hire a few hundred to a few thousand professionals with three to five years’ experience have a better environment in the Philippines,” Sanders told the Inquirer.

He also noted that the attrition rate in India is about 30 percent, compared with 10 percent or so in the Philippines.

“A new Indian IT person expects to be promoted within six months and (to get) a 20-percent raise in six months, then another 20 percent on his first year, and so on,” Sanders said. “If he doesn’t get it, he will go to another company. Being a software developer, rather than being a project-related company, we [at Lawson Software] can’t have that kind of attrition.”

Sanderson said his company is optimistic that its investment in Filipino technology workers will result in a long-term partnership with the local workforce.

The potentials and skills of the workers were what drew them to the Philippines, preferring it over other countries in the region, he said.

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