An inside track on outsourcing
An inside track on outsourcing
The global market for Business Process Outsourcing (BPO) – the contracting of a specific business task, such as payroll, human resources or data analysis, to a third-party service provider – is projected to reach $220 billion by 2020. WorldBridge Outsourcing is one of the largest BPO companies in Cambodia, employing over 500 staff, which can swell to 700 during peak season. The Post’s Matthieu de Gaudemar sat down with the company’s CEO, Tomas Pokorny, to discuss the challenges and potential of outsourcing.
How many people work in outsourcing in Cambodia?
By my estimate, excluding internal call centres, up to 5,000.
Do you think Cambodia can develop into a major outsourcing destination?
I personally believe that by 2020, Cambodia could be employing 100,000 people in the outsourcing industry. But it also depends on the direction the government chooses to take. They say they want to shift away from garment manufacturing and they want to take a different direction, but they are not sure where to start.
Outsourcing could offer a lot of potential growth for Cambodia. It is a perfect job for recent graduates and students – there are not a huge amount of other options for them – and you have 300,000 students graduating here every year.
Are the language skills of Cambodians suited for the work?
This is where we need to distinguish between call centres and BPO. For call centres, we are trying more and more to develop English-speaking call centre activities, but Cambodia is not there yet. But when it comes to outsourcing, Cambodian-based projects are still focusing more on data analysis and document processing. They are mostly non-voice projects and these BPO projects are what Cambodia is really ready for right now.
How can Cambodians complete these BPO projects if their language skills fall short?
One of our deals is data analysis for a German client. The work is only based on reading and writing, because we are the ones who research the data and transform it into metadata. The people who perform this analysis are taught from scratch with no knowledge of the language and they are able to perform text-reading within six weeks. So comprehension is not a problem, it is only speaking where Cambodia still lags behind.
How seasonal is the demand for outsourcing?
We are working mostly with international clients in various industries. Not all of those clients have long-term projects, and the volume of their activities peaks at certain times of the year. For example, US holiday periods will affect the volume of activity a lot. When it is in season, we might ramp up our call team numbers three or four times.
Given the seasonality of the work, are your employees on full or part-time contracts?
This is the trickiest part of not only our call centre, but generally of outsourcing in Cambodia. The necessity for short-term contracts, part-time jobs and freelancers is problematic because people don’t like short-term contracts here. However, because we target youth, university students and recent graduates, they see it as a good opportunity for a first job. We are able that way to have a lot of short-term contracts.
Our contracts can be three months, four months or a year, depending on the season. But you cannot rely on those seasonal workers to create your core team. We structure our company by having a core team that has a stable contract duration, and those people are trained to do pretty much any job in the company.
What challenges do you experience operating in Cambodia?
We need to be available to operate during our clients’ holidays and peak activity schedules. A lot of times Cambodians will refuse to work during holidays, and that is sometimes unfairly supported by current regulations because the labour laws are not friendly to BPOs. The BPO industry needs to be very flexible. We cannot always follow the schedule of Cambodian holidays but right now, based on current laws, we have to.
We are trying to push forward with talks with the government and present them with demands for a better tax regime and certain labour law adjustments for the BPO industry. Once those changes are made, it will become easier for companies to be profitable
Does outsourcing provide a greater long-term benefit for the country’s economy than industries such as garment manufacturing?
Absolutely. You find people in garment companies that are actually quite educated people, who have at least a high school education. Those people need to do manual labour because there are no other jobs for them.
Cambodia right now is a country that helps other countries source manufacturing jobs and that is not necessarily a great position to be in. Whereas in outsourcing, you are creating office-based jobs – it’s a better environment for workers and you are also creating a more intelligent population.
How does Cambodia compare to other outsourcing destinations?
Pricewise, Cambodia’s outsourcing is comparable with other outsourcing countries, but it’s not necessarily cheaper, because Cambodia does not have any tax benefits for BPOs. The Philippines, by contrast, offers huge tax benefits for BPOs and they receive a lot of government assistance.
On the other hand, Cambodia is not prone to natural disasters like typhoons and such, it is relatively stable politically, and it is also fairly easy to do business here. And even if you look at factors like internet connectivity, you might think that the Philippines would have the best facilities being an outsourcing giant, but they have one of the worst internet connections in the region.
