Jobs in Philippines and India at risk as tech evolves faster than people

A wave of automation is forcing the industry to retrain workers for higher skilled jobs

Call center agents work overnight daily to cater to United States clients in Manila's Makati financial district February 6, 2012. The number of Filipinos who work graveyard shifts to answer calls on behalf of big multinational companies like Citigroup and JPMorgan Chase is now greater than India's 350,000, earning the Philippine's the title - Call Centre Capital of the World. By 2016, the Philippines wants to double the size of the local BPO market to $25 billion, employing 1.3 million workers from 640,000 at the end of 2011. But to be able to that the Southeast Asian nation must convince investors it has more to offer than a huge pool of english-speaking talent. Picture taken February 6, 2012. To match Analysis OUTSOURCING/PHILIPPINES   REUTERS/Erik De Castro (PHILIPPINES - Tags: BUSINESS EMPLOYMENT) - GM1E8381AD401
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Since the early 2000s, the Philippines added more than a million jobs as foreign companies outsourced customer support and sales tasks to the South East Asian nation.

Now a looming wave of automation is threatening employment at call centres and forcing the industry to retrain workers to meet the demand for higher skilled jobs in areas such as health care, banking, finance and insurance, according to Bloomberg.

"The biggest challenge is people," says Jojo Uligan, the president of the Contact Centre Association of the Philippines (CCAP) at his office in Manila. "We lack people with enough technical expertise and experience to service emerging needs."

The Philippines is the world's top call centre destination with companies like Accenture and American Express among those that have set up shop in the South East Asian nation. They have been lured by cheaper wages, Filipinos' cultural affinity with the West, and a 100 million population that is mostly fluent in English.


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With technology constantly advancing, machines are now able to replicate some of the tasks that people do, including customer relations. More than half of outsourced jobs could be lost in a few years unless significant retraining is done, according to a study by Tholons Capital, a consultancy in New York.

In India, robots are now replacing warehouse workers, for example.

Rapidly improving automation technology is allowing software to carry out routine IT support work and repetitive back office tasks previously performed by humans – the very tasks global companies originally outsourced to India to take advantage of cheaper labour, according to the BBC.

In February, the IT companuy Cognizant said it would "aggressively" employ automation to "optimise" its services. Meanwhile, India's third-largest IT firm, Infosys, said automation allowed it to shift 9,000 workers from low-skill jobs to more advanced projects, like machine learning and artificial intelligence, last year. Its competitor Wipro redeployed 3,200 in 2016, and predicts it will move another 4,500 this year.

Yet this has been accompanied by a significant slowing in hiring. The IT body Nasscom's annual review predicted a 20 to 25 per cent reduction in jobs in the industry over the next three years.

Leaders of some of the biggest outsourcing companies in the world will meet this month in the Philippines to craft fresh strategies to counter the impact of automation, Mr Uligan says.

The country is home to the Global In-House Centre Council Philippines, the trade association of shared service/in-house centres. It represents more than 30 members, predominantly Fortune 500 companies, and more than 100,000 jobs.

"We help set, develop and share best practices, serve as a forum for a maturing industry, and collaborate to maintain, grow and validate the Philippines' edge in high-value work in the global business services sector," it says.

Companies are increasingly seeking workers who are college educated, experienced, have technical expertise and can easily be retrained, Mr Uligan says.

"There is a lot of complex work now. It's no longer mere directory assistance or taking orders."

These concerns are tempering the outlook for the industry, Bloomberg says. The CCAP estimates that revenue will grow as much as 8 per cent this year until 2022, compared with growth rates exceeding 10 per cent in the past.

"People don't evolve as fast as technology," Mr Uligan says.


With agencies