Attrition has long been a challenge for the outsourcing industry; the shifting dynamics remains a true testament among HR professionals battling to retain proactive and high performing individuals. Based on XMG’s Q1 2008 Performance Benchmarking Study, attrition rate for the Contact Centers in Metro Manila improved by 2 to 3 percentage point, closing at 41 to 43% annually. However, locators outside Metro Manila are enjoying lower attrition rate (31 to 33% annually) due to minimal competition in the area.

The large difference in attrition between Contact Centers companies in Metro Manila and those in the provinces may be attributed to the lack of alternative industry to support employment and the level of competition that prevent employees to jump from one organization to another. Unlike the provincial cities, Metro Manila has long been established as the super hub for the outsourcing industry. Because of this, certain cities can no longer support the steady increase of talent demand resulting into talent war among companies.

According to Kathrina Lim, XMG’s HR Research Analyst “given this scenario, companies should evaluate potential tier 2 cities outside Metro Manila to support non-critical functions and align key skills being produced by each city vis-à-vis with the organization’s key functions”. She also added the need to address proper recruitment practices with the right strategies and innovation to attract and retain the right talents.

Comparing talents in the provincial cities and here in Metro Manila, employees stay longer in their jobs due to a higher level of satisfaction attributed to lower standard of living, closer to family and friends, faster travel time and preference for a more simple lifestyle. Overall, XMG highly recommends understanding the net talent capacity that each city can deliver and mapping of core and non-core organizational function to be aligned with potential talents coming from the province using the KSAV framework (knowledge, skills, attitude and values).