Alexander Knight

Why Singaporean companies need to embrace business process outsourcing


With the average salary for a university graduate in Singapore now running to S$3,300 – excluding CPF contributions – finding staff within a budget can be problematic.

Although Singapore has a highly-educated population of 3.81 million Singaporeans and PRs – the actual labour market is considerably smaller when taking into consideration students and the elderly. This, coupled with an unemployment rate of 2%, makes the market tight to say the least.

There is an acute need for companies to embrace business process outsourcing in the Lion City. From tele-centres, journalists/writers, marketing, data collection, research and development, processing paperwork to general secretarial and administrative work – all of which can be offshored, leaving those highly valuable graduates to take on the more meaty jobs.

There are several centres for BPO in Southeast Asia – with the Philippines and Malaysia being the two main sources. English language skills are usually key.

China is a magnificent source for Chinese-speaking labour, with some of the lowest overheads in the world, but laws there and a propensity to strike makes it less attractive.

With an average per person outsourcing cost in Manila working out at around S$1,500 per month – for a university graduate worker, office, equipment, and management fee – the maths become compelling.

Angel Dimaano, Operations Director of SPOKIYO, a Manila-based BPO, says ‘Firms from all over the world are embracing business process outsourcing in the Philippines – the ease of delivery with everyone speaking the same language – and in Singapore’s case on the same time zone too – is crucial.

‘There are 100 million people in the Philippines – so the graduate labour pool is reasonably big. For risk mitigation, BPOs can be spread out across several cities in our archipelago – including cities like Cebu and Davao. Using modern IT, companies can run their entire back offices remotely – leaving local staff to focus on the essentials.’

There are a couple of caveats – adverse weather conditions can affect operations on occasion and there are more public holidays than nearly anywhere else in the world.

Happily, it seems that these trade offs are well worth it.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.

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