Skills Development in IT-BPM Sector: Matching skills with needs

(Part 3)

On March 4, the Contact Center Association of the Philippines (CCAP) held a General Membership Meeting in which I gave an economic briefing. It was an opportunity for me to update my information on how their industry, a sub-sector of the information technology and business process management (IT-BPM) industry, fared during the post-pandemic period. The Chairman’s Report confirmed my expectation that the whole sector is growing faster than the Philippine gross domestic product (GDP), with the entire IT-BPM sector growing in 2023 at 9.2% and the contact center and business process (CC and BP) sub-sector growing even faster at 9.5% (GDP in 2023 grew at 5.6%). This gives me greater confidence in supporting the forecasts made by their top officials that by 2028, total earnings of this engine of the Philippine economy will be close to $60 billion from about $40 billion today. Equally encouraging is the increase in the number of people employed: 8.5% for the IT-BPM industry and 9.4% for the CC and BP sub-sector.

What caught my attention was the slide presenting “Ease or Difficulty of Hiring Talents.” For the benefit of the Millennials and Centennials who are the ones most likely to fill the vacancies in the next five years or so, let me enumerate the top jobs that are difficult to fill: security operations analyst, it security analyst, network engineer, IT analyst, digital marketing analyst, data scientist, QA engineer, software engineer/developer, senior server-led developer, senior full stack developer, Linux systems engineer, MS server engineer, cloud engineer, Python developer, data base administrator, and android developer.

To address these skills shortages, the CCAP is leading the development of sector-specific skills frameworks, with expertise provided by member volunteers from the CCAP councils. Fortunately, the Government is taking a pro-active approach to fund the reskilling and upskilling of the industry workforce to improve their competencies. There are seven skills tracks identified by the CCAP leadership: Customer Service, Learning and Organization, Workforce Management, Quality Management, Security, Transformation and Business Transition, and Business Continuity Plan.

Already in the Roadmap 2022 of the Philippine IT-BPM Sector, there were very clear warnings that there would be critical shortages of high-skill workers in the industry. Robotics, automation, and cloud computing, among other technologies, were foreseen to have a direct impact on the IT-BPM sector. These technological transitions were seen to imply a significant transition for the industry towards a higher value-added service mix. Such a transition would require important changes and infusion of talents across the skill spectrum. Among the existing workforce of some 1.7 million, there would be a need for upskilling among 27% of the workers towards high-skill jobs, supplemented by the entry of specialized talents equipped with Ph.D. and M.S. degrees. Some 46% of the workforce should transition to mid-skill work through reskilling programs and through mid-career entrants as well as new graduates joining the mid-level category. There will always be room for some low-skill workers that would constitute some 27% of the workforce. While it is the industry players’ main responsibility to ensure that their employees are able to transition to higher-skill jobs, there is a need for close cooperation among the Government, industry, and the academe to attract broader stakeholder support, provide direction and context to small- and medium-sized enterprises, and attract higher value-added services as the Philippines positions itself as a technology-enabled hub.

The Roadmap recommendations in 2022 are applicable, if not more so, because of the technological changes that were accelerated during the pandemic (especially in the fields of education, health, food security, and logistics). Among these changes that are critical for the human capital skill spectrum of the Philippine IT-BPM sector to move towards a higher value-added scenario are:

• Specialized high-skilled entrants (e.g., Ph.D., MS, industry laterals) that are necessary at the mid- and high-end levels of the skills pyramid;

• Existing workforce upskilled from low to mid; and mid to high skill;

• Mid-career entrants (e.g., laterals, managers) and specialized graduates coming in to bolster mid- and high-level skills requirement;

• Existing manpower engaged in low-skill tasks to be reskilled to perform relatively high-value jobs.

The country cannot wait for reforms in the basic education and higher-education levels of the schooling system to address the poor performance of our pupils in mathematics and sciences in international achievement tests. It is imperative that we focus on the existing workforce (especially those in their twenties and thirties) to upskill and reskill them in science, technology, engineering, and mathematics (STEM). The proposed changes to develop a high-skilled workforce for the future (say, beyond 2028) will take considerable time for the skills to be defined, curricula to be modified and new methods of teaching to be adopted. To address the more immediate demand for the value-added work by the sector (1.5 million workers are supposed to be added to the industry in the next four years), a special program is required to fast-track the development of employees for high- and mid-skilled jobs by providing special training for the “crème de la crème” of graduates in the Philippines to equip them with skills to be ready for mid-level talent, and highly skilled service areas.

To ensure that these collaborative efforts among the Government, business, and the academe are inclusive and not limited to those with college degrees, the best graduates of technical schools under the supervision of TESDA (Technical Education and Skills Development Authority) should be included in these efforts to produce higher and more specialized skills for the IT-BPM sector. I am referring to the graduates of the leading technical schools like those run by the Don Bosco priests and by private foundations like the Meralco Polytechnic Institute, the Dualtech Training Institute, the Center for Industrial Technology and Enterprise (CITE), and others that TESDA may recom-mend. This will ensure a more inclusive program of human resource development in the IT-BPM sector because graduates of these techvoc schools generally come from low-income households. From my personal experiences with these technical schools, I can vouch for the fact that some of their best graduates can surpass many average college graduates, even from the better private schools, in critical thinking, industry, and perseverance in work.

The so-called High-Impact Program (HIP) proposed in the 2022 Roadmap involves increasing the availability of local talents and providing opportunities for employment for high skilled jobs among college (and techvoc) graduates looking for jobs. Qualifying criteria include a bachelor’s degree (and I would add a techvoc degree or certificate), top 5% academic performers, academic qualification in engineering, ICT-related degree programs and the like, and fresh graduates with not more than six months of experience in the labor market. The stakeholders who should be involved in this HIP will be the Information Technology and Business Process Association of the Philippines (IBPAP) and partner associations, together with the Commission on Higher Education (and I would add TESDA). The focus of developing skills for future industries (those that comprise Industrial Revolu-tion 4.0) should not only be on fresh supply of graduates but also for the existing workforce (1.7 million).

To be realistic, to successfully transition from low-skill to mid-skill and high-skill roles, a majority of these 1.7 million present workers will have to be upskilled to higher-value activities, especially in such areas as Python pro-gramming, Big data project management, bioinformatics, data visualization, supply chain organization, and the like.

Finally, it must be stressed that there is a need to provide planned, structured, and timely research to IT-BPM operators. With the sector’s increasing planning and policy-support needs — i.e., analyzing trends, identifying growth areas, and understanding challenges in the IT-BPM sector — it is imperative to strengthen IBPAP research capacity in collaboration with other industry research centers hosted by universities, think tanks, and other independent research institutes.

(To be continued.)


Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.