The BPO industry may be losing jobs to AI, but there is hope!

It’s August 2024, more than half a year since a January report by our sister publication Businessworld on Filipinos expecting to lose their jobs because of Artificial Intelligence. In the study, 73% of Flipinos who were surveyed said this technology will lead to job losses, with 48% saying that AI will not help create new jobs. When I reference AI, I am talking about specific technologies such as Generative AI (GenAI) and machine learning that can be used for certain levels of creative output and customer service such as chatbots.

Anecdotally, I’ve heard from friends in the BPO industry that AI was really the nail in the coffin for several types of customer service jobs getting axed in favor of AI. I wanted to know if these anecdotes were true so I reached out to IT & Business Process Association Philippines (IBPAP), which oversees the BPO industry in the Philippines and just asked, “Is it true?”

According to Jack Madrid, President and CEO of IBPAP, he says that generative AI isn’t just about adjusting settings but actually pushing boundaries. From low to mid-complexity services in 2016, there has been a swift transition to mid to high-complexity services by 2023. In the same way that technology services in the early 2000’s was limited to website hosting and database management, it grew in ten years to include things like SEO and social media management. Madrid acknowledges this challenge but also sets some context on the growth of the industry.

“While the local IT-BPM sector has seen continuous growth—8.7% in headcount and 8.8% in revenue in 2023—it has yet to address several issues affecting the talent pool. IBPAP is already seeing the impact of GenAI pushing higher-level work and a premium placed on skill sets needed for the future. Given these changes in the landscape, IBPAP needs the cooperation of industry stakeholders, government agencies, and the academe to upskill and reskill existing talent while ensuring our graduates are job-ready. The IT-BPM industry, which contributes 8.4% to the country’s GDP, needs your help.”

Madrid also addressed the comments from DOLE Labor Secretary Bienvenido Laguesma saying that there needs to be some form of leveling up with our current job pool to cater to the unprecedented rise of AI. Madrid shares six initiatives that IBPAP is helping address this gap in the labor pool versus AI:

1. Boost the IT-BPM Industry Talent in Higher Education. IBPAP signed a partnership with CHED to enrich the IT-BPM talent, build the capacities of HEIs for the 4th Industrial Revolution, and review and revise the curricula to align with the trends and directions of the industry.
2. Strengthen the Local IT-BPM Industry. IBPAP bolsters the local IT-BPM industry with specific activities anchored to the 2028 Philippine IT-BPM Roadmap Acceleration Levers: Talent Development Through Upskilling and Reskilling of Potential and Existing Workforce, Marketing and Promotion, Talent Hub, and Policy and Regulatory Support.
3. Improve employability of Senior High School (SHS) students upon graduation. In partnership with DepEd, IBPAP piloted expanded immersion programs with durations ranging from 400 to 640 hours depending on the students’ specialization. We are currently in ongoing conversations to scale this program up in more areas. This thrust is aimed to enhance the SHS Work Immersion and Pre-Immersion Curriculum.
4. Increase digital capability to strengthen cross-cutting skills of students. IBPAP, with support from DepEd, initiated PC donation drives from the IT-BPM industry which provided students with access to necessary technology and connectivity to facilitate continuous learning, geared towards bridging the digital divide.
5. Capacity Building of Teachers. IBPAP conducted appropriate Train The Teacher (T3) programs for faculty in Higher Education Institutions (HEIs).
6. Facilitate the Implementation of the Philippine Skills Framework (PSF). In a joint effort with DICT, IBPAP organized an Industry-Academe Consortium Kick-Off Event to facilitate the implementation of the PSF developed by the IT-BPM sectors Contact Center & Business Process, Global In-house Centers, Healthcare Information Management, and IT & Software Services, through the adoption of the Sector Skills Framework by educational institutions and implementing industry-aligned curriculum enhancements.

Madrid states that generative AI isn’t an enemy of the workplace. Rather it is a tool of the BPO industry but has also rendered certain functions as automatable.  “IBPAP recognizes that Artificial Intelligence (AI) has the potential to augment the diverse functions and roles performed by our workforce. At the same time, it is expected to change and potentially displace certain tasks that are repetitive and are automatable.” 

But there is hope.

Madrid says that the future of the outsourcing industry is not bleak. In fact it is very much in demand, but the skillset has changed. “The IT-BPM industry will always be founded on the skills and capabilities of Filipino talent. The Philippine IT-BPM industry is experiencing strong demand. In 2024, we are expecting to reach 1.82 million FTE and USD 38 billion in revenue. It is not a matter of a demand problem but a supply challenge. IBPAP has been proactive in keeping stakeholders informed about this positive development. Our industry needs a consistent talent supply pipeline to address this demand. The innate skills of Filipinos like empathy, curiosity, and bayanihan make us invaluable in the global IT-BPM market.”

It seems like what will save jobs from AI is the actual adoption and upskilling of Filipinos. Both in AI tools and soft skills that AI cannot replicate.