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News » AI, talent deficit threaten Philippine BPO industry

AI, talent deficit threaten Philippine BPO industry

AI talent deficit threaten PH BPO
Photo from Business World

MANILA, PHILIPPINES — The Business Process Outsourcing (BPO) sector in the Philippines faces dual challenges from emerging artificial intelligence (AI) technology and a talent shortage, threatening its stake in the global $300 billion BPO market. 

Industry group IT & Business Process Association of the Philippines (IBPAP) warns that the country is generating a low ratio of graduates with the necessary communication and technical skills, potentially missing out on adding 800,000 jobs in the next five years.

“The most common challenge I hear is comprehension… I think they fail at a more basic level,” said IBPAP President and CEO Jack Madrid.

The country’s quality of education has slipped, with nine out of 10 Filipino children unable to comprehend simple text by age 10, as per World Bank data.

Madrid also noted a gap in basic IT skills, such as programming and troubleshooting, which BPOs increasingly require. Due to this employability crisis, only one gets hired for every 10 outsourcing job applicants.

The country also faces a threat from AI and similar technologies, expected to displace nearly a quarter of the workforce in the Philippine outsourcing industry by 2030, as estimated by the Asian Development Bank.

“There are some fundamental weaknesses in our educational system… It’s an old problem, but it’s just become much more urgent now,” Madrid added.

Earlier this year, Philippine Senator Risa Hontiveros expressed concern over AI’s impact on the local outsourcing industry, particularly its employees. Hontiveros suggested launching training programs to help Filipinos to work “alongside” intelligent machines.

Despite these trials, the IBPAP chief remains hopeful, projecting a growth of 6%-7% in full-time BPO employees and a revenue surge of 7%-8% to roughly $35 billion this year. 

Madrid also revealed that IBPAP had partnered with the Philippines’ Commission on Higher Education (CHED) on initiatives, including a revamp of the IT education program to align with current trends and develop competencies in the sector.

Read more here.

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