Corporate Form Party – Get soaked with bubbles with colleagues amidst strobe lights and intense music – it may seem like a luxurious way to motivate staff. But for KMC Solutions, one of the many outsourcing providers in the Philippines, it fits an increasingly important strategy to attract and retain footless talent.
Such companies in the Philippines, long known as the world’s call centre capital, are usually associated with low margins and high staff turnover.
But now, they are trying to move up the value chain by recruiting technically skilled professionals, such as software developers and data analysts, where wages and daily tasks are determined by clients, rather than being managed by arm length by outsourcing providers.
This means that KMC has moved out of the staffing model. The client just wants to handle a certain number of calls and “don’t know how much the provider will pay the staff or even who the staff are,” says Gian Reyes’s marketing director.
The company is currently tackling the challenge of consolidating and motivating teams thousands of miles from their clients’ headquarters. This is a task that has become more challenging when adopting new technical areas where human resource demand is provided.
This trend has benefited KMC, with the number of outsourced employees quadrupled since 2020, increasing revenue from $69.6 million to $82 million.
KMC charges monthly fees to become a legal employer on record, and handles pay and compliance burdens. Outsourced workers are embedded in client operations.
“With this shift, businesses want to seek and train impactful staff that will make a difference, and still want to report back to them,” Reyes said.
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Like Friday’s Foam Party and free ice cream, KMC will hand out Vespa and cars to workers outsourced via annual raffles as part of their bid to increase joint and staff retention.
Additionally, Outsourcing, a rival business based in the Manila region, ranked 317th in the FT/Statista rankings, hosted an online singing competition on Valentine’s Day, attracting 400 of its outsourced employees. “We have two jobs: find the best talent and make sure they stay forever,” says CEO Mike Lurcher.
KMC and outsourcing are one of the waves of companies that aim to help multinationals tap highly skilled Filipinos as the West deals with a lack of skill and aging workforce.
According to official data, the average age in the Philippines is 26 years old. The Philippines Bureau of Statistics reported that the average monthly salary in the Philippines was 18,423 pesos ($339) in 2022, according to the U.S. Bureau of Labor Statistics.
KMC’s mostly US and Australian clients range from e-commerce and fintech to cloud-based software companies such as Zoom, which employ around 1,000 workers through KMC.
This trend illustrates a transition from associations with call centres in the Philippines. The call center began in the 1990s when US companies turned their attention to the country for accents of English proficiency and neutrality. Today, the country continues to prevail Switzerland and Spain in proficiency in Switzerland and Spain.
Currently, outsourcing and KMC are increasing client demand for a much wider range of roles. “People are beginning to realize you can do anything offshore,” says Racher. “We have a demand for architects, quantitative surveyors, paralegals and accountants. All industries are essentially.”
In 2024, according to the Philippines’ IT and Business Process Association (IBPAP), there were 1.8 million Filipino employees in the “Business Process Management” sector.
“We need to go beyond where we started: English flow ency, communication – it’s all given. That’s what took us here,” says IBPAP chief Jacques Madrid. “We need to do it more and move faster to address the challenges of talent.” The former MTV Philippines boss is looking to rebrand the country from a low-cost back-office labor supplier to one of the most valuable talents that embrace AI and the digital economy.
“We need to leverage demographics and the way we do that is to raise the value chain and look at revenue per employee rather than counting jobs,” he says.
However, industry leaders acknowledge that they face skills gaps. Angela Lucas, director of business development for Booth and Partners, ranked 133rd and focuses on “employer record” services, but says it’s “unfortunate” that AI-related contracts may be turned down due to a lack of qualified candidates.
“If there was a program that people could easily skill, then we are just missing that in our education system now,” she says.
Ronald Mendoza, a member of the Philippine Department of Education’s Division for Strategic Management, said “While government reforms in education and training are coming, “the bank is about stronger partnerships with the private sector to fund these efforts.”
Outsourcing companies are experimenting with on-job training programs, trying to portray working for them as a stable, ambitious career choice.
Lucas says the average tenure for booth and partner outsourcing workers is three years compared to 12 months across the outsourcing sector.
Reyes believes the booming BPM sector could disrupt the long history of Filipinos going abroad to send work home.
Madrid adds that multinational companies need to consider how they communicate with outsourced workers – highlighting the value and impact of their work.
When JPMorgan CEO Jamie Dimon visited the Philippines, the bank employs 20,000 people. “It was like the return of the king,” he says. “(Demon) You said it’s the third largest country of JPMorgan. This is a great example of how corporate culture and brands should communicate.”
