Philippine BPOs court Democrats’, Republicans’ goodwill

Anti-outsourcing sentiment is high in the U.S., the country that provides the majority of work for Philippine outsourcing firms

MANILA, Philippines – With a rise in anti-outsourcing sentiment in the United States, firms are eager to rebrand the business process to make outsourcing to the Philippines more palatable to American Democrats and Republicans.

Since U.S. companies provide the clear majority of Philippine outsourcing work, winning over American support for the industry is imperative, explained Alfredo Ayala, Chairman of the Business Processing Association of the Philippines (BPAP) at an annual outsourcing summit on October 8.

“We want to make sure to keep the market leadership in the U.S.,” said BPAP President and CEO Benedict Hernandez. “From a market perspective the U.S. is the biggest market in all categories. It’s still dominating globally…. About 74% is the U.S. market (for) business. [About] 26% is the rest of the world.”

Filipino firms are cautious not to outrightly support either candidate and say they are making efforts to talk to legislators on both sides of the aisle. The outcome of the election is still in question so Business Process Outsourcing (BPO) firms could be dealing with either candidate’s policy platform for the next 4 years.

“I don’t like the word ‘lobbying.’ I prefer the word ‘dialogue.’ I think we cannot ignore the fact that it is such a big part of the discussion in so much of the developed world’s political economy. So it is incumbent on us to make sure people understand all sides of the discussion,” said Ayala.

It’s about changing the mindset towards outsourcing, he explained. “When you say technology, no one has a negative reaction to it, even though at the end of the day, it’s technology that is probably quote-unquote the biggest destroyer of jobs. Things get more efficient and you do it in a different way. I think that would be the [goal], so people can view [outsourcing] objectively in terms of the pros and cons,” said Ayala.

Outsourcing firms as far as India believe they should take the a bipartisan approach to courting more positive business sentiment, said Som Mittal, the President of the National Association of Software & Service Companies (NASSCOM), an organization of Indian information and technology business process outsourcing (IT-BPO) firms.

“For us our focus is business. We are all bipartisan. We have to be bipartisan right? It doesn’t matter. We have thrived at a time when Republicans were in the seat. We have done well when Democrats have been (in power),” he said.

“From my vantage point, we work as much with the Democrats as with Republicans. And we have the same situation in our countries where we have multiple political parties at various federal and state levels. I don’t think we as organizations would take sides on backing one or the other,” he added.

A real need for good will

With the American election season underway and unemployment a crucial election issue, both parties’ candidates have pointed the finger at outsourcing.

A central talking point of Barack Obama’s campaign has been Mick Romney’s involvement in Bain Capital, a private investment firm that Democrats say bought companies, laid off many American and sent their jobs abroad where they could pay less.

“You got to give Romney credit. He’s a job creator – in Singapore, China, India. He’s been very good at creating jobs, overseas,” said Obama’s Vice President, Joe Biden in June. 


In July, Romney called Obama the real “outsourcer-in-chief” for giving stimulus funds to companies that “end up making their products outside the United States. 

So far the sentiment has been confined to a word war and has not translated into new legislation, though a bill was put to the Senate to end existing tax breaks for employers who send their jobs overseas. The US Senate killed the bill before it was put to a final vote. 

“It’s effecting economies that are not doing so well so when you say outsourcing (the mindset is) you’re taking out our jobs instead of looking at it as a better service provider,” acknowledged Mitch Locsin, Vice President And Head of Corporate Relationship Management for Philippine Long Distance Telephone Co. (PLDT).

Many BPO firms in the Philippines claim they make American businesses more cost effective. “We make U.S. companies more competitive” said Hernandez.

Local firms point out that many of the jobs that have gone abroad are in manufacturing, which is not a specialty of the Philippines. While some jobs have come back to the U.S., many haven’t.

Philippine firms realize it’s a sensitive subject for their former colonizer.

“We need to be very sensitive,” said Hernandez.

“There are companies whose philosophy is, ‘No, I am not going to ship out any jobs,’ And that’s their right,” he said. “And our job as the delivery executer is to deliver really well so they know [they are getting the] value being paid for.”

The negative connotations that these local firms have to combat are strong, especially during the election season.

“The changing of branding is going to be a tough job on finding the right niche of how it should be branded because it will still be affiliated with outsourcing no matter what,” said Locsin. – Rappler.com

 

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