Demand for O&O Jobs and Office Spaces Seen to Grow Despite Trump's "America First" Policy - JLL​​

Press Release

February 27, 2017

​The need for prime office space, particularly by outsourcing and offshoring companies based in the Philippines, is seen to continue at a steady pace.

Claro Cordero Jr., Head of  Research, Consulting & Valuation Advisory Services for JLL in the Philippines, says the movement will remain undeterred by U.S. President Donald Trump's 'America First' policy announcement which seeks to bring back jobs that have been sourced out  to labor-rich economies such as the Philippines, India, China and Mexico.

Cordero explains that the Philippines, regarded as the biggest call centre market in the world, remains an attractive site for these companies given two factors: cost-efficient labour and low attrition rate.

He says the disparity in labour costs is one of the most significant factors that attracts global companies to engage the O&O industry in the Philippines. While labour costs in the customer service industry in India are almost on par with similar types of jobs in the US, labour costs in the Philippines have remained competitive. According to the 2015 Total Rewards Survey conducted by Willis Towers Watson, labour costs in the Philippines are still a quarter cheaper than in the U.S.

Another factor that has enticed O&O companies is the relatively low attrition rate in the O&O firms based in the Philippines, when compared with their counterparts in India and the US. , In the same Towers Watson survey, the estimated attrition rate in the Philippines is 20 per cent, while attrition rates in both India and the U.S. remain within the range of 25 to 40 per cent, providing some buffer on the resources for O&O firms in the Philippines to train and retrain to enhance the service-oriented skills of their labour force.

By the end of 2015, the Philippines' O&O sector grew to approximately 5 per cent of the economy  and employs more than 1.1 million full-time employees. This became a spring board for the local office property market to rise to more than 6 million square meters office space over the last 10 years to meet the needs of these occupiers.

In the next four years, Cordero estimates than more than 2 million square meters of space is expected to be completed and made available to office hunters.