Daydreamers: The future
career aspirations of
business process
outsourcing workers in
Cebu City, the
Philippines
Pegah Bazogh Hadi Kiyashari July 2015
Master’s Thesis I ter atio al Develop e t Studies Graduate School of Social Sciences
University of Amsterdam
Supervisor: Dr. N.P.C. Beerepoot
Daydreamers: The future career aspirations of
business process outsourcing workers in Cebu City,
the Philippines
Pegah Bazogh Hadi Kiyashari Student Number: 10861343
pegah_bazogh@msn.com
July 1st, 2015
Contents
Table of Contents iii
List of Figures v
List of Tables v
List of Abbreviations vi
Acknowledgements vii
Chapter I: Introduction
1.1 Background to the study 1
1.2 Main objectives and relevance 3
1.3 Outline of the study 5
Chapter II: Theoretical framework
2.1 Service sector as driver for economic growth 7
2.2 Business process outsourcing in the Philippines 10
a. Industry overview
b. BPO workers in the Philippines
2.3 Employability and generic Skills 14
a. Employability and generic skills framework
b. The concept of employability
c. Employability dimensions and indicators
2.4 Concluding remarks 18
Chapter III: Research framework
3.1 Research questions 19 3.2 Conceptual scheme 20 3.3 Operationalisation of Concepts 21 3.4 Research location 23 a. The Philippines b. Cebu City 3.5 Methodology 25 a. Qualitative techniques b. Quantitative techniques c. Sampling procedure d. Limitations e. Ethical considerations 3.6 Concluding remarks 31
Chapter IV: Contextual Background: the Philippines
4.1 The Philippines: History and context 32
a. Brief economic overview
b. Growth of the services sector in the Philippines
4.2 BPO in Cebu 37
4.3 Employee profile 39
4.4 Concluding remarks 44
Chapter V: BPO Employment in Cebu City: Characteristics
5.1 Income 45
5.2 Impact of night shift work 47
5.3 Employee training 53
5.4 Access to employment 53
5.5 Promotional opportunities within the Cebu City BPO industry 55
5.6 Concluding remarks 57
Chapter VI: Employability and Future Career Aspirations
6.1 Skills and employability improvements 59
6.2 Impacts of improved employability on upward labour mobility 67
6.3 Perceived career opportunities within the BPO 70
6.4 Perceived career opportunities outside of the BPO 73
a. Why workers leave the industry
b. Future career aspirations
6.5 Concluding remarks 80
Chapter VII: Conclusion and Recommendations
7.1 Summary and conclusion of findings 82
a. Employee perceptions of career opportunities and
labour market position
b. The knowledge and skills gained during BPO
employment
c. Impacts of BPO experience on former employees
d. The BPO industry as a transition stage
7.2 Recommendations and lines of further research 85
a. Recommendations
b. Lines of further research
References 88
List of Figures
Figure 3.1 Conceptual scheme 20
Figure 3.2 Map of the Philippines 24
Figure 4.1 Educational level of respondents 41
Figure 4.2 Distribution of job positions within the survey sample 42
Figure 5.1 Code linkages between night shift work and social nature of 51
BPO employment
Figure 5.2 Code linkages between young graduates in the industry and 52
The BPO as a transition stage
Figure 5.3 Training received in Cebu City BPO industry 53
Figure 6.1 Skills improvements since working in the BPO industry 61
Figure 6.2 Hard skills improvements according to level of employment 64
Figure 6.4 Future career aspirations by specific professions 78
List of Tables
Table 4.1 Job Position in relation to years of work experience in the BPO 44
Table 5.1 Decision to work in the BPO industry 46
Table 5.2 Wage satisfaction according to position in BPO 48
Table 6.1 Soft skills improvements based on level of employment 66
Table 6.2 Impacts of improved employability on future career 68
Table 6.3 Feeling challenged at work in relation to long-run career 70
List of Abbreviations BPAP BPO EPZ FDI FTE ICT IMF ISI IT PHP R&D SEZ TESDA
IT & Business Process Association of the Philippines Business Process Outsourcing
Export Processing Zone Foreign Direct Investment Full Time Equivalent
Information and Communication Technology International Monetary Fund
Import Substitution Industrialization Information Technology
Philippine Pesos
Research and Development Special Economic Zone
Acknowledgements
I would like to express my gratitude to the kind individuals that I had the fortune of meeting in Cebu, all those who gave their time to participate in my study, as well as the people who taught me so much about life in the city and Cebuano culture. I would not have known where to begin had it not been for the warmth, hospitality, and guidance of the Panganiban girls, to whom I am extremely grateful. I’d also like to thank Aurelija and Bernardo for welcoming me into their house, their lives, and for reminding me to live my Philippine experience to the fullest.
I am deeply grateful to my supervisor Niels Beerepoot for sharing with me his expertise of the research as well as of the Philippines. His feedback throughout this process has pushed me to be more critical and to look toward the bigger picture. To my friends, my Dutch family, and my uncles, thank you for your patience and your invaluable support throughout this year of ups and downs. To my classmates, thank you for the adventure, for the coffee breaks, and for always putting a smile on my face.
Lastly, I’d like to thank parents and my brother, Kavin, for their love and support, and for being with me through it all, even though they were halfway across the world.
Chapter I: Introduction
1.1 Background to the studySince the 1990s, the Business Process Outsourcing (BPO) industry has been growing rapidly, especially in India and the Philippines (Deery, Nath, & Walsh 2013). In a 2014 visit, the World Bank president Dr. Jim Yong Kim declared that the Philippines would become the next Asian Miracle . (e attributed this to the country s rapid economic growth, which will continue to strengthen because of the young, English-speaking labour force in the Philippines (Straits Times 2014). The BPO industry in the Philippines has been growing at a rate of thirty percent annually, making it the country with the fastest growing BPO sector in the world, and the number one largest industry for voice-based services (IT & Business Process Association 2012). The low cost and high availability of educated youngsters with a good grasp of the English language is what makes the Philippines such a popular BPO destination (Bird & Ernst 2009). Call centre work makes up the majority of the Philippines BPO sector, accounting for 60% of BPO firms (Beerepoot & Hendriks 2013). However, these educated youngsters are often seen as over-qualified for the simple and routine tasks that they have to carry out, leading many of them to leave the industry after a few years (Deery et al. 2013).
Bird and Ernst (2009) found three main causes for high turnover rates in the Philippine BPO industry. These were: competition from other BPO firms, the increasing share of overseas workers (migration), and working conditions. This last factor is a rather complex one. Within the category of poor working conditions we can include: difficulties with accent modification, racial abuse, routinisation of work, overnight shifts, short breaks, improper office conditions, and limited prospects for promotion (Deery et al. 2013, Taylor & Bain 2005, Bird & Ernst 2009). Routinisation of work goes hand in hand with limited prospects for promotion; the former is often seen as acceptable as long as upward labour mobility is considered a possibility, but the combination of the two is problematic. The decision to leave also hinges on the conditions of the labour market (Das et al. 2013). Individuals in positions that lack
variety, without promotional opportunities, are likely to want to quit if the labour market conditions allow it (Taylor & Bain 2005).
This draws attention to the opportunities available to individuals once they leave the BPO industry. In India, 20% pursued further education and training after they left, and 28% showed vertical mobility (Vira & James 2012). Post-call centre pay appeared to be higher for those with degrees and temporarily lower for those without degrees, the five most significant job destinations being: banking, insurance, information technology (IT), and marketing and finance (Vira & James 2012). However, Benner and Mane (2009) found that per year, only less than 10% of call centre employees are promoted. This includes promotions within the call centre itself and elsewhere in the business.
In the Philippines, unlike in the majority of developed and developing economies, economic growth is centered around the offshore services industry rather than manufacturing. The offshore service sector is seen as a success for countries such as India and the Philippines, and as an opportunity for other poorer countries to grow (Dossani & Kenney 2007). On the other hand, many criticize the service sector as being insufficient for economic growth. For example, the large number of university graduates needed for the success of the services and continuation of growth does not appear to be sustainable unless investments are made in human capital and institutions (Rodrik 2014). Further, export-oriented industrial growth is still seen as an opportunity in developing nations where labour is cheap and raw materials, capable manufacturers, and domestic markets are abundant (Gereffi 2014). As the offshore services sector provides jobs for university graduates, who are likely to already be part of the middle class (Murphy 2011), it is important to see whether growth in the Philippines provides employability improvements and upward social and labour mobility as well as economic growth. Upward labour mobility as a result of the BPO industry can be assessed through a focus on the experiences and perceptions of current and former BPO workers.
offshore service sector in the Philippines. In their 2013 study, Niels Beerepoot and Mitch Hendriks (2013) researched the long-term employment perceptions of BPO employees in Baguio City, the Philippines, through a focus on improvements in employability and generic skills. They conclude that while the BPO industry does not enable the workers to realize their full potential, it provides the opportunity to improve individual employability by strengthening generic skills, indicating that employees work in this industry because they believe it will benefit them in the future. What these workers intend to do with the skills that they obtain, and the opportunities available to them within the Philippine labour market requires further investigation.
1.2. Main objectives and relevance
The main objective of the study is to contribute to an improved understanding of the long-term impacts of the BPO industry on its employees by learning about why they entered the industry, what they think they are gaining from it, and why they choose to stay or leave. Workers perceptions on what they can gain from working in the industry will contribute to an understanding of whether the industry benefits the individuals it employs, or whether BPO work simply acts as a form of temporary employment without contributing to future career goals. This requires a focus on the aspirations of employees within the BPO industry in order to learn about what employee goals are for the future and what plans they have in place to achieve these goals. Perceptions will be considered from a variety of angles, including the perceptions of those who are working in the industry and hoping for upward improvements, those who have experienced promotions within the industry, as well as those who have left the industry. A compilation of the future work aspirations and the actual experiences of those who have left the industry will provide important insight into future upward labour mobility and the opportunities (or lack thereof) provided by the BPO industry, shedding light on the ways in which employees think BPO work will benefit them in the long run, as well as the actual benefits that experience in the industry provides. This will contribute not only to the
existing debates on the high turn-over rates in the industry and the working conditions involved (see e.g. Das et al. 2013, Deery et al. 2013, Thite & Russell 2010, Taylor & Bain 2005), but also to the overall role of the offshore services industry as a substitute for manufacturing in the growth of a developing economy.
The second objective is to learn about the ways in which BPO work enhances workers employability. This will be done using the framework established by Beerepoot and Hendriks (2013), to learn about the specific skills and employability improvements that employees gain throughout their experience in the BPO industry, as trainees as well as on the job. This area of the research will also be aimed at individuals who have work experience in the BPO industry and have now left, in order to learn about how their BPO experiences compare to the labour market that is available to them upon leaving.
Together, these objectives provide insight on the role of the BPO industry as a driver for economic growth by considering the opportunities for upward labour mobility that exist within the industry, as well as the employability improvements that can contribute to a successful career outside of the industry. Not only can this shed light on the implications of services sector-led economic growth, it can also address the problems of attrition and high turnover rates within the BPO industry. By gaining an understanding of employee perspectives, human resource departments can work towards the alignment of the goals of the BPO industry with those of employees, and begin reducing the problems of labour shortages and high rates of attrition.
Cebu City is the second largest city in the Philippines, and is also the country s second largest BPO destination, ranking eighth in the top BPO destination globally (Tholons 2015). This means that the industry has established a solid foundation in the city, providing access to workers with extensive BPO experience as well as recent graduates who have newly entered the industry. As the majority of the city s BPO firms are centralized within the Cebu City IT Park, the research location fits within the scope of a two month research project while still providing a
destination in the world, a larger destination such as Manila would overwhelm the research (Tholons 2015).
1.3. Outline of the study
This study is based upon open-ended interviews with individuals currently employed in a range of positions within the BPO industry, as well as a few who have left the industry. A survey yielding 100 responses was also distributed amongst BPO employees. All data was collected in Cebu City during a two month period in the start of 2015.
The research is organized in seven chapters, which together provide a glimpse into the skills and employability improvements that are experienced within the BPO industry and the different purposes that BPO experience has in the long-term career trajectories of employees. Chapters two and three lay the groundwork of the study, as chapter two provides the theoretical framework within which the study is positioned, explaining the role of the services sector as a driver for economic growth compared to the role that manufacturing growth has played in the development trajectories of other countries. Furthermore the chapter provides an overview of the services sector within the Philippines, before going on to explore employability and generic skills, and their importance in a neo-liberal approach towards labour. Chapter three presents the research questions that are explored in the study, and the methodological approaches used to answer these questions. The chapter explains the locational choice of the research as well as the limitations and ethical considerations involved.
Chapter four begins by providing a historical context for the economic situation in the Philippines, taking into account the country s low-growth trajectory in the past, and the reasons for which services-led growth has had greater success. The chapter begins to delve into the empirical findings by providing an overview of the research participants, formulating a general profile of BPO employees in Cebu City to lay the groundwork for the findings that are presented in chapters five and six.
Chapters five and six present the empirical findings, beginning with the characteristics of BPO employment in Cebu City, and the difficulties involved in this line of work. Chapter six explains the specific employability and generic skills improvements as experienced by employees, as well as the impacts that these improvements are expected to have. Furthermore, this chapter assesses the future career aspirations of employees and the role that BPO employment plays in their long-term career trajectories.
The final chapter summarizes and concludes on the findings of the research, providing suggestions for the industry as it moves forward, as well as for further lines of research that will aid in developing an understanding of the role that the services sector plays in the long-term growth trajectories of individuals as well as the country as a whole.
Chapter II: Theoretical Framework
2.1. The service sector as a driver for economic growthBusiness Process Outsourcing can be seen as an alternative to manufacturing in the creation of economic growth for countries such as the Philippines. Gereffi and Fernandez-Stark describe outsourcing as the action of contracting a special function or service from a legally separate unit (outside of the boundaries of the company , rather than using the company s own internal resources and capabilities (2010 pg. 3). This means that companies in North America, for example, hire a call centre firm in the Philippines to handle their customer support and other such call centre duties rather than providing customer support from within their own company. This works out to cost the company much less than it would to provide customer support from within North America as wages are significantly lower in the Philippines.
Technological advances in Information and Communication Technology (ICT) along with the spread of neoliberal policies are accredited with the changes in the world economy that have taken place, allowing for a progression from local industrial production and manufacturing to an increased focus on the production of services. What began with a rise in productivity due to technical changes during the British Industrial Revolution, transitioned to the 1st unbundling of production and after 1995, the 2nd unbundling of production (Kloosterman, Beerepoot, & Lambregts 2015). The phase of the first unbundling of production consisted of the division of the value chain, spatially separating the processes of raw material extraction, production, and consumption. This phase required the global spread of neo-liberal policies along with ICT improvements in order for governments across the world to cooperate with one another and allow for the unbundling of labour across space. Global competition led to further ICT improvements and liberalization, allowing for the operation of financial activities and services across space at affordable rates (Kloosterman et al. 2015).
Ghani and O Connel argue that because of globalization s expansion of
growth. Countries such as the Philippines, with a comparative advantage in the services, do not have to wait to become competitive in manufacturing and can instead experience economic growth by refining and expanding their services (pg. . They refer to the rise of the services sector as the Third )ndustrial Revolution, pointing out ways in which such growth has been strengthening (Ghani and O Connel , pg. -3). The first being the role that technology has played in allowing for the trade of services at a distance, without requiring face-to-face interaction as was necessary in the past. Next, they point to the decline in the cost of trading goods and rapid expansion of global trade in services. The third area of improvement is productivity, as the extension of trade, technology, and global supply chains to the service sector has led to increased productivity of the services sector. They point out that between 1990 and 2012, both developing and developed economies have grown more through services than other sectors, while …latecomers to development have benefitted more from the service sector Ghani
and O Connel , pg. and . Further, while in the past, job creation was mainly
through the manufacturing sector, technological improvements have led to a decline in manufacturing jobs while the number of jobs in the services sector has been on the rise. Not only is job-creation in the services greater, service jobs are also being created at an earlier stage of development.
However, they stress that this does not mean the services sector is more important that the manufacturing sector, nor is the manufacturing sector more important than the services sector. In a similar vein, Eichengreen and Gupta (2011) argue that it is not necessary for an economy to choose to focus on one or the other, and that services and manufacturing complement each other rather than act as substitutes or alternatives. Labour supply from the agricultural sector needs to be shifted into both services and manufacturing. Furthermore, they point out that the concern that service sector employment does not provide opportunities for low-skilled individuals does not mean that economies should focus on the manufacturing sector instead, as both industries are moving towards high-skilled employment
The somewhat more optimistic Dossani and Kenney (2007) indicated that services offshoring has the potential to reorganize the global economy more profoundly than did the movement of manufacturing from developed to developing
countries pg. . While they also stress the importance of an educated
workforce in the success of this industry in the developing world, they suggest that developed countries will have to show that their industries are more creative to be able to compete with the low costs of services in the developing world (Dossani & Kenney 2007).
Daniel Rodrik (2014) on the other hand argues that the services industry cannot lead to economic growth in the same way that manufacturing did. His first point is that most services require an extremely high skill level, which the labour forces of most developing countries do not have. As such, developing countries will have to concentrate on low-skilled areas of the industry, which are not as productive or profitable. These areas still require some skill level, which limits access to the industry to individuals who can speak English for example, while manufacturing could employ a greater range of individuals. The manufacturing industry also has the highest intersectoral linkages, meaning that manufacturing is most likely to spark growth in other sectors of the economy. On the other hand, the BPO industry s intersectoral linkage indices are much lower than other sectors, limiting the growth that it can stimulate (Usui 2012). Secondly, he argues that in order to expand a country s services sector, productivity in other areas of a county s economy is needed. In manufacturing, countries could profit enough from a few successful exports to be able to diversify and expand without a need for growth in other areas of the economy. He therefore claims that the services sector alone cannot lead a country to grow in the same way that manufacturing has in the past (Rodrik 2014).
2.2. Business process outsourcing in the Philippines
a. Industry overview
The Philippines and India provide some of the lowest costs of labour when it comes to offshoring professionals (Beshouri & Farrell 2005). Entry-level labour supply is abundant in the Philippines, though managerial ability may be lacking (Beshouri & Farrell 2005). This is attributed to the dominance of small and medium-sized enterprises, which do not provide the appropriate experience required for managerial work. Further, Filipinos are unlikely to gain significant managerial experience abroad as many leave the country due to a lack of job opportunities and end up working in lower level jobs abroad because the pay is much higher than the work they would find in the Philippines. Thus, while remittances are high, immigrants who return to the Philippines are unlikely to provide a supply of managerial labour (Beshouri & Farrell 2005). It would therefore make sense for there to be a high demand for managerial workers, enabling upward labour mobility for experienced call centre workers. However, it is unclear whether this is actually the case.
Ofreneo, Ng, and Marasigan-Pasumbal identify two sectors of the BPO industry: the voice sector and the non-voice sector (2007). The voice sector involves communicating with customers over the phone, for various reasons including customer support and telemarketing. The non-voice sector consists of behind the scenes business-related activities such as database development, market research, payroll, and account management for example (Ofreneo et al. 2007). The voice sector of the BPO industry requires employees to work night shifts to account for the time difference that exists, as workers in India and the Philippines for example service customers in Europe and North America (Ofreneo et al. 2007). The calls made by call centre workers can be identified as either inbound or outbound. Inbound calls are ones addressing customer needs or concerns while outbound calls target sales and promotions; outbound call agents are telemarketers (Ofreneo et al.
Massini and Miozzo (2010) distinguish between three different forms of outsourcing. The first form is domestic outsourcing, which is when part of an activity is outsourced, but there is also a portion that operates domestically within the firm. In such a situation, the domestic firm and the outsourcing firm must be able to coordinate the work well. An example of domestic outsourcing is in Research and Development (R&D), where maintaining all operations domestically becomes too costly, but complete outsourcing limits the technology and knowledge available (2010). The second form, international in-sourcing, is when foreign firms transfer activities from their domestic location to a foreign location. Instead of outsourcing the activities to a foreign firm, activities continue to be conducted by the firm itself, but are simply relocated to a location abroad, where labour and business costs are lower, and local knowledge may be relevant to the activity at hand (2010). Lastly, offshore outsourcing refers to the delegation of activities to an external organization that exists independently from the firm. Similar to international in-sourcing, the entire process of the activity takes place abroad. However, the domestic firm does not invest in a foreign location for the activity to take place, but simply hires an external firm to conduct the activity (2010)
Kiran Mirchandani (2003) argues that instead of providing a labour source with skills and employability, call centre work should be seen as a top-down approach to globalization, aiming to Americanize call centre workers in their cultural awareness, language, and overall nature of work, through routinized, simplistic tasks. Taylor and Bain (2005) also point out the routinized nature of call centre work, comparing it to a Taylorised assembly-line form of providing services to the West. These theories suggest that BPO workers are not given freedom or agency over their tasks and are therefore also constricted in terms of what they are able to learn or gain from their employment.
Furthermore, great emphasis has been placed upon the difficulties associated with BPO employment and the strains faced by call center workers in particular. Taylor and Bain (2005) point to problems of identity loss and cultural assimilation as well as stressful working conditions and repetitive tasks that they are overqualified for. In order to be able to connect with customers, call center agents
are trained to know about the cultures of their clients and also to adapt their accents to be more neutral or similar to the ways in which their clients speak. Workers also learn to use more Westernized names as to avoid customer anger and frustration over receiving service from over-seas. Agents often deal with irate customers who are unsatisfied with the product of the firm that the agents are servicing, and their anger is sometimes amplified by learning that the agents are at a distance, for fear of the distance resulting in inferior service. Such difficulties associated with BPO employment are contributing to the high attrition rates. During a case study conducted in India for example, agents who felt as though they are incapable of modifying their accents were much more likely to intend to leave their positions (Deery et al. 2013). It is suggested that in the long-run, problems with accent modification, language clarity, and cultural differences may even discourage the off-shoring of call center services (Taylor & Bain 2005).
Aside from the stress of handling angry customers, BPO workers also have to deal with long working hours and the lifestyle associated with night-shift work, which can lead to health problems. Health issues include vision problems and loss of voice due to handling phone calls at a high frequency for extended periods of time, as well as burnout stress syndrome, which includes fatigue and insomnia due to having to sleep during the daytime instead of the night time. Further issues include permanent ear damage and muscle pain (Ofreneo et al. 2007). The health problems associated with night-shift work make it difficult for employees to build a career in the BPO industry.
Recommendations for solving the problems of employee attrition due to the emotionally challenging and stressful nature of BPO work include having supervisors provide more social support for employees, by making it clear that racial abuse by customers is unacceptable for example, as well as to focus more on slowing down the pace at which agents speak rather than on accent modification (Deery et al. 2013). Ofreneo et al. (2007) argue that BPO workers need more of a voice, as they do not receive the appropriate opportunities to communicate their
daily goings on of the industry. Furthermore, the weak implementation of labour laws and protests against the unionization of the industry are blamed for the poor working conditions of BPO employees, and their limited opportunities to voice their opinions on the situation. Foreign firms have been against unionization of the BPO industry as it is likely to increase their costs; one American firm in the Philippines even indicated that they would pull out their business if unionization occurred (Ofreneo et al. 2007). The formation of labour unions and stricter implementation of labour laws is expected to not only result in more qualified employees, but also satisfied employees who are less likely to leave their positions.
b. BPO workers in the Philippines
Internationally, the majority of BPO workers have been found to be quite young. Murphy found that when comparing Indian call centre workers to international ones, 93% of workers were under the age of thirty (2011, pg. 424). The Philippines produces over 400,000 college graduates a year (KPMG 2010). While older workers are preferred in some cases because they are considered more stable and less likely to leave their jobs, young graduates looking for entry-level jobs are less costly, especially due to the abundance of workers produced each year (Ofreneo et al. 2007). Further, young Filipino graduates are considered to be highly suitable for employment, sometimes more so than graduates in other countries (Beshouri & Farrell 2005).
The lifestyles of BPO workers in the Philippines are known to contrast with those of other young workers in the country. Most prominently, BPO workers often work night shifts in order to account for time differences, as they work for firms in North America and Europe for example (Kabamalan et al. 2010). Such unconventional working hours not only impact their sleeping habits and overall health, they are also associated with increased fast-food consumption, alcohol consumption, and smoking, especially with fellow co-workers. In Metro Manila, . % of call centre workers listed drinking as the most common leisure activity done with office mates (Kabamalan et al. 2010, pg. 51).
Considering the young age of the workers and factors involved with night shift work, it is unsurprising that the attrition rates in the BPO industry are so high. Given these conditions, it may be likely that educated youngsters enter the industry with the intention of leaving after a few years, identifying the BPO sector as a type of transition stage between graduating from university and pursuing their long-term careers. Furthermore, it will be interesting to see how young BPO workers adapt to more conventional working hours when they leave the industry, as well as the social changes that accompany their new lifestyles.
2.3. Employability and generic skills
a. Employability and generic skills framework
I have applied the employability and generic skills framework presented by Beerepoot and Hendriks (2013), which focuses on whether skills and employability are improved by working in the BPO sector. Because the BPO sector is critiqued for placing educated individuals in routine work, Beerepoot and Hendriks assessed whether BPO work improves employability and generic skills for future upward labour mobility in Baguio City, the Philippines. Their results indicated that workers strategically pursued BPO employment for the generic skills that they could acquire to improve their employability, meaning that in Baguio City the decision to work within the BPO sector was a reflection on the future work aspirations of the individual. As such, the skills that are pursued should also be a reflection on the labour market and resources available for the improvement of employability and future employment. However, as mentioned earlier, studies such as this one have not had the opportunity to look at workers after they have left the sector to find out whether BPO work actually did improve their employability.
Clarke and Patrickson define employability as a capability that is
realised as an outcome of an individual s assets, such as skills, qualifications and personal attributes, the way in which those assets are used, how they are presented
(pg. 122). While it is left to the employee to realize this capability, Clarke and Patrickson stress the role of the employer in enabling the employee, and the mutual benefits that can result from such a relationship (2008). A comprehensive definition of employability can also include context-related factors such as the labour market and training provided by the employer, which prevent individuals from making use of their employability (Forrier & Sels 2003). This is especially applicable to BPO workers in the Philippines, as although they all have college degrees, they are reliant on BPO employment as well as improved employability through BPO work due to the limitations of the labour market. Beerepoot and Hendriks (2013) point out that beyond the employee and employer, the market structure within which these employees find themselves impacts their perceptions of what makes a person employable. It is therefore not only important to take into account perceptions of employability improvements, but also to gain an understanding of whether employees are given the opportunity to pursue the factors that make them employable and whether the market structure actually provides the framework needed to make use of improved employability. Improved employability without upward labour mobility does not benefit individuals who are already employed.
b. The concept of employability
According to McQuaid and Lindsay (2005), the concept of employability emerged in labour market policy to emphasize the importance of maintaining employment for those who were already employed, and encourage employment for the unemployed, including young people and disadvantaged groups. In order to remain employed throughout one s lifetime, it was seen as necessary to maintain and continuously
improve employability. They point out that initially in the 20th century,
employability became known as dichotomic , referring to individuals who were able and willing to work as employable, and to those who were on welfare as unemployable (McQuaid and Lindsay 2005, pg. 200). As such, employability can be considered a neo-liberal concept, encouraging self-sufficient employment and a move away from government spending on social welfare.
The concept of employability, and its importance, came to the forefront as job security began to dwindle, as labour markets moved from providing lifetime employment to placing the responsibility of maintaining employment upon the individual (Forrier & Sells 2003). As international competition and technological advancements in the 1980s led industrialized countries away from the manufacturing industry and towards skills-based labour, the strengthening of skills became crucial for individuals to remain employable (Cornford 2005). Growth had become limited due to Fordist production methods which de-skilled labourers and impeded upon international competitiveness (Kenney & Florida 1988). As the routine assembly line tasks of labourers within the manufacturing industry began to be replaced by technology, and the growth of global networks led to the relocation of manufacturing to areas with cheap raw materials and labour, an educated and skilled labour force became more and more important. The importance of lifelong learning and skill development continues today as continued technological advances begin to impede on the jobs of workers in the services industry. Nouriel Roubini (2014) explains that while in the past, job growth in the service sector could be relied on to replace manufacturing work, not only has service work been offshored to countries in Asia, in the future the service-sector jobs in Asia will be replaced by technology. Robotics and automation are expected to replace low skilled jobs in the services as well as in manufacturing. He stresses the importance of continued skills development and education, especially for those who do not have easy access (Roubini 2014). With these expected advances in labour-saving technology, responsibility is put into the hands of individual workers as a neoliberal approach towards labour. In order for BPO workers to be able to remain employable and continue their participation in the labour pool, they need to build on their education and skills.
c. Employability dimensions and indicators
of employability (Forrier & Sels 2003, pg. 110). The two dimensions of movement capital clarify the importance of studying the career aspirations of BPO workers and their perceptions on employability improvements. The first dimension consists of the individual s abilities and knowledge of the labour market. Such knowledge allows individuals to be aware of their positions within the labour market, thereby knowing the adjustments that need to be made to improve their employability. The second dimension consists of the motivation behind the career decisions of individuals, as this guides the direction of a person s career and therefore impacts their position in the labour market (Forrier & Sels 2003). An understanding of the career ambitions of BPO workers is therefore crucial for comprehending any possible upward labour mobility.
According to Nauta et al. (2009), turnover intentions and interest in improving employability are dependent on career satisfaction as well as an individual s confidence in their current position and their ability to extend beyond this position. Thus, if a worker is dissatisfied with his or her career or believes that he or she is capable of more, the worker is more likely to pursue employability and to have turnover intentions. Based on the high rates of attrition within the BPO sector, it is likely that workers are dissatisfied with their jobs and feel as though they are not reaching their full potential. In a similar vein, Rothwell and Arnold (2007) point out the correlation between subjective career success and self-perceived employability. Subjective career success is indicative of what individuals have achieved in their careers thus far, while self-perceived employability includes perspectives on future employment. As such, it is important to have some understanding of where individuals place themselves in terms of success within their current careers before being able to grasp their perceived employability for the future. Since the majority of BPO workers are still in the early phases of their careers, subjective career success is not addressed extensively, but will still play a meaningful role in the assessment of perceived employability.
Forrier and Sels explain that employability indicators are difficult to generalize, as they are dependent on specific labour markets. As I am interested in employee perceptions on employability, it is important to focus on the indicators
that BPO workers find relevant to or impactful on their future employment. Thus the indicators identified by Beerepoot and Hendriks as important to the employability of BPO workers in the Philippines in their 2013 study are combined with any new indicators that emerged during interviews. As I am not interested in measuring the actual employability of BPO workers, but rather the perceived improvements that BPO work brings to employability, the abilities of individuals are not assessed (Forrier & Sels 2003).
2.4 Concluding remarks
This chapter has provided an explanation of the theoretical foundation upon which the study had been formed. The role of the BPO industry has been placed within an economic and historical context, explaining its importance on the global scale as well as specifically in the Philippines. Aside from giving an overview of the various ways in which BPO firms can exist, and the implications of employment in the industry, the chapter largely focuses upon the conflicting arguments regarding services-led growth as a substitute for industrial expansion. The dominance of services-sector employment in the Philippines, and the high attrition rates involved, bring into question the employability improvements that the BPO workforce is after, as well as what the implications of these improvements are for the futures of employees. An explanation of how this topic is explored follows in the next chapter.
Chapter III: Research Framework
This chapter outlines the research problem and the ways in which it will be addressed. The goal of the research is to learn about BPO workers perceptions of their future working opportunities and impacts of their current work on their employability, which requires scrutiny of the BPO industry, as well as the concepts of employability and upward labour mobility within and outside of the industry. Employee perceptions link these three factors together and are therefore at the core of the research. After presenting the main research question and sub-questions, this chapter goes on to explain the selection of the research location, and finally the research methodology that is used.
3.1 Research questions
How do BPO workers in Cebu City perceive their future working opportunities and how does their current work help enhance their employability?
Sub-questions:
How do BPO workers perceive the career opportunities within and outside the BPO sector and what efforts do they take to enhance their positions in internal and external labour markets?
What knowledge and skills have workers gained during BPO employment?
How did experience in the BPO industry impact the career prospects and employability of former BPO employees?
3.1 Conceptual scheme (figure 3.1)
The above scheme provides a visual for the impact of the BPO sector on upward labour mobility and improved employability in Cebu City. BPO work is intended to improve employability through the enhancement of generic skills, and as employability improves, it will enable individuals to find higher-level work in terms of pay, working conditions, and complexity. Upward labour mobility as a result of employability can happen within the BPO as well as in external labour markets.
Workers perceptions are positioned at the centre, as the study aims to gain insight into the ways in which workers perceive the BPO industry and its impact on upward labour mobility and employability. The future work aspirations of employees as well as the improvements in employability that are seen as necessary to achieve such aspirations will also be analysed.
3.3 Operationalisation of concepts
Concepts Dimensions Variables Example Indicators
BPO employment
Employment experience
Income What are the income levels of BPO workers?
Working conditions
What are the working hours?
Is the working environment comfortable? Impacts of BPO employment on health
Social impacts Impacts of BPO employment on social lives
Access to employment
How were workers recruited?
Have workers been recruited for other work? What jobs are available to workers?
Opportunities for training
What sort of training do workers undergo? Is there additional training available? Opportunities and plans to pursue further education Upward labour mobility w/in call centres Promotional opportunities
The likelihood of being promoted within the sector
Employability
Perceived improvements
Generic skills
Perceived improvements on: communication skills basic computer skills, multi-tasking, time/stress/ emotions management, people management/ interpersonal skills, research/problem solving skills, management/ leadership skills
Have these improvements increased employability?
What other skills have been gained through BPO employment? Have they improved employability? Personal labour
potential
Has BPO helped workers to realize their potential? Do workers feel confident in their current
positions
and in their ability to pursue further employment? Impacts on labour
market position Direct effects
Has improved employability impacted upward labour mobility?
Upward labour mobility Perceived career opportunities within BPO Future aspirations
What sorts of careers do workers aspire to have? Desires for increased wealth
Desires for improved working conditions
Do workers think they can move upwards within the BPO sector?
Jobs available within BPO
What sorts of jobs are available according to workers? Perceived career opportunities outside BPO Future aspirations
What sorts of careers do workers aspire to have? Desires for increased wealth
Desires for improved working conditions
Do workers think they can move upwards outside the BPO sector?
Jobs available outside BPO
What sorts of jobs are available according to workers? Personal experience Improved job status and pay
Changes in wage levels as experienced by workers Improved working conditions as experienced by workers
Ability to move upward
Do workers feel stuck in their current positions? Are inabilities to move up acredited to the industry
or to personal ambition?
3.4 Research location
a. The Philippines
The Republic of the Philippines is a country made up of 7,107 islands positioned on the western Pacific Ocean in Southeast Asia. Taiwan is to the north of the country while Vietnam is to the east and Indonesia to the south. With a population of 100
million people, the Philippines is the 12th most populous country in the world, with
the country s population continuing to grow rapidly. The country s rapid population growth means that 54% of the population is under the age of 25 and must be educated and prepared to become part of the labour force (The Guardian 2014).
In terms of human development, the Philippines rank below the average for East Asia and the Pacific. The country s (uman Development )ndex value is 0.654, while the average for East Asia and the Pacific is 0.683. However, when it comes to expected years of schooling, the Philippines ranks below the average by only one tenth of a year and actually surpasses the mean years of schooling for East Asia and the Pacific by 1.7 years (UNDP 2013).
The Philippine economy has been remarkable in its growth in recent years, growing by 6.6 percent in 2012. Production side growth has been attributed largely to the sustained growth of the services sector, which expanded by 7.4 percent in 2012, as almost all subsectors in the industry expanded by more than 7 percent. The services sector is also seen as responsible for increasing consumption, which along with construction, public spending, and net exports has been driving the high level of growth in the country (World Bank 2013). The Philippines has been recognized as the world s leader in voice-based BPO services (KPMG 2010). The industry is believed capable of continuing its growth in the Philippines, however, such growth requires investments in human infrastructure, as well as physical infrastructure,
entrepreneurship, and trade connectivity Ghani and O Connel , pg. .
According to KPMG s debrief of the )nternational Outsourcing summit,
government support is needed to facilitate these changes as well as to market and promote the Philippines as a centre for more complex services on a global level. Not only is this expected to increase the country s services sector success, but it will also
allow BPO employees to apply and make better use of their high education levels. Furthermore, they pointed to a need for the annual expansion of the labour pool available for BPO work. Even though the country produces enough graduates for the continued growth of BPO services, an increase in the number of graduates that become BPO workers is needed (KPMG 2010).
Figure 3.2 Map of the Philippines
Source: http://d-maps.com/carte.php?num_car=582&lang=en
b. Cebu City
After Metro Manila, Metro Cebu is the second most populous area of the Philippines, with the population in Cebu City being 610,417 (National Statistics Office 2010). Cebu City is ranked 8th in the top 100 list of outsourcing destinations in the world,
making it the second best outsourcing destination in the Philippines, as Manila is
ranked 2nd on the list (Tholons 2015). The voice-based nature of the industry in the
Philippines, and overall lack of diversity in service activities, encourages employees to look beyond the sector and work on their employability. The industry first emerged in Manila and is therefore also centred there, with expansions happening to other urban centres in the Philippines, such as Cebu as well as smaller centres such as Baguio City and Iloilo. Cebu City can be seen as a middle ground between Manila and other smaller urban centres, making it the perfect research location for this study. Because the industry is newer to Cebu than it is to Manila, the perspectives on employability and upward labour mobility will also be newer than in Manila, where the rapid growth of the industry has been less recent. Furthermore, compared to smaller cities such as Baguio, where in 2009 there were a total of 14 BPO firms, the problem of post-BPO employment is likely to be more common and more dominant (Hendriks 2010).
3.5 Methodology
This research is based upon a critical realist approach, integrating a realist ontology with a constructivist epistemology. The constructivist worldview considers multiple realities, as one s understanding of the world is constructed by individual
perspectives, and can be perceived differently from different standpoints. The
realist ontology views the world as independent of the theories and perceptions that are constructed by the individuals. By integrating these two, the research is
considerate of the multiple viewpoints that exist independent of the objective reality of the world, acknowledging biases, and making use of a mixed methods approach (Creswell 2011, Ch. 2). The mixed methods approach makes use of both qualitative
and quantitative data in a convergent design, where data is collected simultaneously and analysed separately, finally merging the results (Creswell 2011, Ch. 3). By mixing the methods of observations, interviews, and surveys, the data can be triangulated.
a. Qualitative techniques
As the second biggest city in the Philippines, the BPO presence in Cebu City is large and highly spread out. As it was not within the research s capacity to conduct an overview of all of the city s firms, and information on the exact number of firms and spread of employee positions within each firm was not available, the research location was constricted to the firms within the Cebu City IT Park. The abundance of cafés and restaurants in the IT park allowed for easy access to employees, without the need to approach them in a work setting. The cafés and restaurants are sites of social interactions between co-workers and friends, allowing for a much more relaxed and low-pressure atmosphere than an office setting. All data was collected over an eight-week period from the end of January 2015 until the end of March.
Observations
As I had planned to find interview subjects by approaching workers in the restaurants and cafés, I began by observing the IT Park setting in order to find the best locations as well as times of day to approach BPO employees. My first visit to the Cebu City IT Park was on a Saturday afternoon, during which time there were very few people at the Park, and most of these were students using the wireless internet at the cafés. I had not expected to encounter very many workers on the weekend, and returned on a Monday around mid-day, during which time the cafés and restaurants were much more busy. However, after speaking to a few individuals I found out that most of them were day-shift workers on their lunch breaks and did not have much time to talk. As a large portion of the Cebu City BPO industry is composed of call centres servicing North America and Europe, access to night shift workers had to be taken into consideration. For safety reasons, I avoided visiting the
recommended by the workers that ) d spoken to. The night shift workers are easily reachable between the hours of 6:00AM and 9:00AM, during which time they socialize with co-workers, or simply eat breakfast after a night s work at the cafés and restaurants in the IT Park. During these hours of the day, I found that I was also able to speak to day-shift workers who were having breakfast or meeting a friend before work.
Through the duration of the fieldwork period, observation notes were taken in the setting of the IT Park as well as throughout the city, on the behaviour of individuals and the set-up of the park itself. These notes mostly reflect the dominance of the BPO industry in Cebu.
Interviews
Due to the difficulties gaining access to BPO firms for research purposes, research subjects had to be found on a convenience basis. During my first few days of observations I was able to set up interviews with day shift and night shift workers in different positions with varying levels of experience in the industry. While the cafés and restaurants in the IT Park provided plenty of access to BPO employees, it was sometimes difficult to approach individuals because they were eating or socializing. Overall, most people were very willing to help and as the majority of BPO employees are quite young, many of them were interested in my research and my experience in the Philippines.
Throughout the fieldwork period, I was able to conduct 24 interviews in the IT Park setting with individuals that I approached myself. The majority of these respondents were call center agents, as that is the dominant area of the Cebu BPO industry, though there was some variety. These interviews lasted half an hour on average, ranging between twenty and forty-five minutes. Four interviews were set up with current and former call center employees through connections made while in the Philippines and took place in various restaurants throughout the city. The duration of these interviews was also half an hour on average. I was able to meet with the director of one of the call center firms in the IT Park, also in a restaurant in
Cebu City, and that interview was more in-depth, lasting an hour and a half, as he was my only respondent of this nature.
The interview questions generally followed the variables and indicators found in the operationalization of basic concepts, ranging from person to person based on position and experience. Throughout the fieldwork process, questions focusing on stability and the BPO sector as a transition phase were added to the interviews, as these topics were noticeably prevalent in the answers of the respondents during earlier interviews. For this same reason, these topics were also added to the questionnaire. Interview transcripts were coded and analysed using ATLAS.ti coding software.
b. Quantitative techniques
An electronic survey was distributed amongst BPO workers in a variety of positions, there were no restrictions placed on the characteristics of the respondents, other than that they had to be employed in the BPO industry at the time of the survey. The format of an online survey was chosen for easy distribution within firms, as service-sector employees work with computers and internet. Furthermore, online surveys are an efficient and cost-effective way of data collection, especially for students who are not funded and are facing time constraints (Babbie 2011 pg. 293).
The survey rendered 100 responses, most of which came from voice-based services employees. The survey consisted of 41 questions including 5-point Likert scale questions as well as multiple choice and short answer. The questions were formed based on the variables that emerged through the operationalization of basic concepts and included variables used by Beerepoot and Hendriks in their 2013 study. Additionally, there were topics found prominent during qualitative
interviews, observations, and casual conversations with BPO employees that were also added to the survey. The survey was structured to begin with questions about the individual characteristics of an employee, followed by past work experience, perceived employability improvements that emerged through BPO work, and
SPSS software. Due to the limited number of responses, this analysis consisted largely of cross-tabulations in the form of Chi-Square tests.
a. Sampling procedure
Gaining access to BPO firms has been known to be problematic, as a result of which studies aimed at the BPO industry are often qualitative in nature, focusing on a small number of respondents (Hendriks 2010, Russel & Thite 2008). While I had originally aimed for my survey to be distributed within firms according to a stratified framework, I was not able to gain enough access to proceed in this manner. First, there was no data available on the number of BPO firms in the city and the distribution of positions within the firms, and without such information I could not create a framework. Secondly, as I was conducting the research on my own without the help of an organization, and the firms in the IT Park have very strict rules, it was even more difficult to gain access. After coming into contact with a few firms, the problem seemed to be a concern that the foreign firms accessing the services offered by the BPO would pull out their business if researchers were granted access, even if the research was not concerned with client-specific information. I therefore had to rely on a snowball method of distributing my survey, by sending it to my interviewees and BPO employees that I met at the IT Park, and asking them to pass it along to their colleagues. The snowball method of sampling is deemed appropriate when the researcher is having difficulty accessing members of the target population (Babbie 2011), as with the restrictions around the firms in the industry. This was a slow process because people seemed much more willing to participate in my research on the spot than to fill out the online survey on their own time. I was able to collect 100 survey responses by printing out the last 35 and handing them out to people in person at the IT Park. I had opted not to distribute all of the surveys in person due to time constraints and costs of printing in the Philippines (especially as each survey was seven pages long).
As mentioned earlier, because of my limited time frame as well as limited access to the firms in the BPO, interview respondents were found according to a non-probability convenience sample (Babbie 2011). My sample was restricted to
individuals who were willing to talk to me. Attempts were made to interview former BPO workers who had left the industry via a snowball method of sampling, as the only way I could access them was via their friends or former colleagues in the BPO. This was proven unsuccessful, leaving me to rely on former employees found through personal connections instead. Because my research is based on a convenience sample, I have to be careful when it comes to over-generalizing, as the data collected can provide important insight but is somewhat risky (Babbie 2011).
b. Limitations
The biggest problem that I encountered while in the field was that people were quite happy to participate in my research on the spot, but could not be relied on to participate at a later date. This meant that interviews planned for a later date were usually not carried out. As mentioned earlier, this made it difficult interview individuals who had left the industry through a snowball method of sampling. I was therefore only able to do so if the connection had been made through personal friendships, as in those cases interviewees felt a greater obligation.
As I was not able to gain permission for my surveys to be distributed within any firms, most of the questionnaires that were e-mailed to BPO employees (either by myself or by their colleagues) were not filled out on their own time. Paper copies were therefore distributed at the IT Park.
Within the surveys, the use of the Likert scale is likely to have led to a central tendency bias, causing respondents to select the middle response rather than choosing a positive or negative side (James, Demaree, & Wolf 1984). This could be a result of indecision or problems with understanding the questions.
Furthermore, as a foreigner, I was sometimes seen as a wealthy outsider with a standard of living that was much higher than theirs, and even fit the characteristics of some of their customers. There is a possibility that this may have affected their answers to certain questions, especially when it came to ambitions to go abroad or dealing with irate customers. However, because of my age and position as a Master s student and researcher, I found that in most cases, the young workers
Finally, due to my limited time-frame I was not able to collect as many responses as I would have liked, and also could not collect survey responses face-to-face, which would perhaps have led to more thorough responses (Babbie 2011). Luckily, however, my interview results can help explain gaps in the survey data.
c. Ethical considerations
Throughout my time in the field, I made it clear who I was, that I was affiliated with the University of Amsterdam, and what the purpose of my research was. In many cases, employees were interested in learning about the results of my research and seeing a copy of the final product. Permission was always asked before recording an interview, and respondents were aware that they could stop the interview or decline to answer a question at any point. While some aspects of my research were of a sensitive nature, such as income for example, most if it focused on general work experience and ambitions for the future, and the majority of respondents were happy to answer all of my questions. When I was able to find a connection within a firm, I signed a non-disclosure agreement stating that I would not include the name of the firm or any firm or product-specific information in my report of the findings. However, as in the end I was not able to have my survey distributed at this firm, the non-disclosure agreement only applies to the interview with the director and observations made during my visits to the offices.
3.6 Concluding remarks
This chapter has explained the focus of the research in terms of the research question and the major concepts to which it relates, showcasing the importance of having employee perceptions at the centre of the research. The selection of Cebu City as the research location is justified by its dominance in the Philippine BPO setting outside of Manila. The final section outlines the ways in which employee perceptions were obtained. In the following chapter, the dominance and economic history of the services sector in the Philippines will be explained, as well as an overview of the BPO employee profile, to lay a foundation for the research findings
Chapter IV: Contextual Background: the Philippines
This chapter provides a broader historical overview of economic development in the Philippines, narrowing down into a focus on Cebu. Such an overview helps provide an understanding of the necessary criteria for services sector success and the process involved in following such a development trajectory. The chapter concludes with an introduction to the research findings in the form of employee characteristics. Secondary data and pre-existing studies are used to explain the findings and to create a general image of the BPO workforce.
4.1 The Philippines: History and context
a. Brief economic overview
The Philippines is referred to as a major development puzzle because of its poor long-term economic growth despite starting out with per capita incomes that were relatively high in the 1950s and 1960s (Usui 2012, pg. 1 & King 2007). During this phase, protectionist Import Substitution Industrialization (ISI) is blamed for the focus on capital-intensive industrialization, which did not provide employment (King 2007). Furthermore, colonial legacies based initially on the Spanish occupation of the Philippines, and later the American influence, are used as an explanation. National capital is needed for industrial expansion, and American transnationals who took on the skills and technology intensive production processes constricted the accumulation of national capital as the periphery were left with labour intensive activities (Bello 2009). Due to the financial crisis and accumulation of external debt that arose during President Marcos rule, structural adjustment programs emerged in order to increase efficiency and reduce debt through a focus on exports. The first phase began in 1980, with trade liberalization. However, this was proven unsuccessful because of a recession, which resulted in declining exports and an increase in imports, negatively impacting Filipino industries and increasing foreign debt. Unemployment also rose due to the
