The Philippines IT business process management (ITBPM) industry is facing high attrition rate and pressing talent scarcity as the new generation of workers demand flexibility on where and how work gets done, and rising salary rates.

In a speech at the virtual event of the European Chamber of Commerce of the Philippines (ECCP), IT Business Process Association of the Philippines (IBPAP) President and CEO Jack Madrid said the attrition rate in the country’s ITBPM industry is between 30 to 40 percent as average attrition has increased by over 10 points since 2021.

He cited the group’s recent survey, which indicated that 40 percent of employees are looking to change jobs in the next four to six months. While that is one specific survey for the Philippines, Madrid believes that it could be a global trend also.

“This younger generation, their behaviors and expectations are a little bit different. So it's something to incorporate into our people strategy because attrition and retention and attraction of people are very, very important,” he pointed out.

While the industry is optimistic about growth in 2022, he said one of the challenges facing the industry is “pressing talent shortage.”

“There is difficulty in finding enough people to fill roles. There is too much attrition in our industry, which has put price pressure on our salaries there is also a misalignment of talent and supply, and access to this talent,” he said. Another challenge is the fast rising salaries, especially for niche skills.

He reiterated that high demand skills are in short supply, and employers are having difficulty attracting and retaining talent.

In addition, digital workers want flexibility on where and how work gets done. He recalled the “Great Resignation” study which showed workers resigning despite the pandemic.

As such, Madrid said, “We need to continue to deliver services beyond the traditional work streams and in terms of operating and working models, we have been increasing and seeing our members increase location diversity to achieve a more robust business continuity plan, extended workforce is the next frontier for disruption and innovation.”

The industry has been pushing for the legislation of a kind of hybrid work arrangement combining onsite and work from home modes. This new work arrangement is not only unique to the Philippines, but is already a global trend that is shaping the business landscape.

He cited the required changes for the future of work, which includes the adoption of new business models from silos, fragmented institutions to organizations with comprehensive technology implementations. Other requirements include infrastructure, application and systems, resiliency playbooks, and work from home arrangements.

It could be recalled that the industry has been pushing for the legislation of a kind of hybrid work arrangement combining onsite and work from home modes. This new work arrangement is not only unique to the Philippines, but is already a global trend that is shaping the business landscape.

“We need to retain our country's competitiveness in terms of costs and operating flexibility. And there are employees and also clients who are not expecting us to go hybrid. We also need to decongest Metro Manila while reducing carbon footprint, sustaining and improving productivity due to optimize work being after all, commuting or lack of community or reducing the time of community is always a good thing,” he pointed out, justifying the benefits of WFH arrangement than requiring enterprises to go back to their physical offices.

He urged government to come up with a legislation allowing work from home arrangement to be able to sustain growth both in jobs creation and revenue.

In 2020, the industry grew to 1.32 million jobs and $26.7 billion in revenues, a modest 1.4 percent growth from 2019.

Despite challenges, the domestic ITBPM sector was expected to have grown as much 12 percent in revenues and 8 percent in jobs in 2021, driven by strong demand from creatives , healthcare, and IT services.

He further noted that the ITBPM sector has contributed P329 billion in investments in the country in the past 20 years. “That's over 12 percent of the total investments in PEZA resulting in almost 1 million direct jobs. So our sector is expected to continue to lead in diversifying the export base of the Philippines,” he added.