The business process outsourcing (BPO) industry in the Philippines has been a major source of employment and revenue for the country for many years. However, for the last few years, the question of artificial intelligence’s (AI) impact on the Philippine BPO industry has been a matter of debate.
While fears have been allayed for a while, the recent release of ChatGPT and other similar AI tools have brought the question to the surface. Now, BPOs and their employees are forced to think about it with greater seriousness.
2023: The Year of AI
2023 is expected to be the year that AI and automation become a regular part of enterprises’ strategies and operations. As AI becomes increasingly accessible, enterprises are turning towards it to reduce costs, improve productivity, and increase accuracy in their customer service operations.
In February, CNBC revealed that Microsoft plans to release software to help large companies create their own chatbots similar to ChatGPT. Its solution would even allow customers to upload their own data and refine their chatbots’ voices.
Gartner also estimates that by 2026, the call center industry could save up to $80 billion by replacing humans with AI chatbots.
“Conversational AI can automate all or part of a contact center customer interaction through both voice and digital channels, through voicebots or chatbots, and it is expected to have transformational benefits to customer service and support organizations within two years,” Gartner reports.
With the fast-paced development of AI and its applications, it is only natural that many BPOs are worried about the implications for their workforce. The worry is even more palpable in the Philippines, where BPOs are a major source of employment and revenue. In fact, BPOs employ an estimated 1.3 million Filipinos across 1,000 companies, making it one of the largest employers in the country.
Transforming the Philippines’ BPO industry
According to Statista, revenue in the global BPO market could grow at a combined annual rate of 6.48% between 2023 and 2027. The IT and Business Process Association of the Philippines, meanwhile, (IT-BAP) reported that the BPO sector generated $29.5 billion in revenues in 2021, 10% higher than $26.7 billion in 2020.
This means that the industry is still growing despite the fears of AI takeover. However, this growth could be short-lived if the industry does not adapt to the changing landscape.
“Now is the time for BPO providers to harness the intelligence of their staff to provide services uniquely fitted to the needs of client companies,” says Mark Talmage-Rostron of Nexford University.
In other words, BPO companies need to start investing in their employees and training them to provide more specialized services that AI cannot replace. This is a sentiment that is shared by many in the industry.
In a parallel vein, some BPO employees in the Philippines have been upskilling on their own, leaving the BPO industry and exploring online freelance opportunities. This is a clear indication that some employees see the writing on the wall and are taking proactive steps to ensure their future employability.
In addition to concerns about job security, some BPO employees are also looking for a specific workplace culture and compensation that roles in the BPO industry cannot meet. This YouTube video and the comments reveal how BPO employees are looking for more than just a job; they want a fulfilling career that provides a sense of purpose and work-life balance.
The government’s role: balancing BPO job security and upskilling
In January, Senator Risa Hontiveros urged the country’s Department of Trade and Inustry (DTI) to protect the BPO sector against a possible AI takeover.
“If this industry gets into trouble, then dollars become scarce, they become more expensive, and the peso devalues. A pathway to entry into the middle class will also disappear,” Hontiveros said. “Maybe work places themselves should now be the schools, or should at least be supported in defining a continuing education pathway for workers.”
This calls for a shift in the government’s focus from just protecting jobs to creating an environment that encourages employees to upskill. This could be accomplished through investing in educational facilities and providing training grants for employees.
Whether artificial will replace humans in the BPO industry is still up for debate. However, one thing is certain: employees must upskill to remain competitive and relevant in the industry.
On the other hand, BPO companies must also invest in their employees and create an environment that encourages upskilling.
Finally, the Philippine government can play a role in providing support, ensuring that employees have access to the right resources and facilities.