Factors that Affect the Cost of Tech Skills in the Philippines

 The cost of technology skills oscillates a lot. This is the common knowledge among recruiters and headhunters in the Philippines. And it is the demand of skills usually pumps up the price. On top of that, most of the time, 2 or more company looking for the same people end up in a bidding war just to get the talent.

In the field of Outsourcing and Recruitment, having predictive insight is very important specially when we do forecasting and reporting aimed at maximizing profits.To help out fellow professionals, let me list down the common factors that affect the cost of technology skills in the Philippines:

1. New Technology. When companies adopt a new technology, it follows that they are also adopting a new set of skills. These skills sets may be similar to the old technology or it may require a new set of skills. The learning curve is the determinant as to how it will affect the increase in demand.
2. Economy of Trade Partners. The Philippine IT and BPO industry is highly dependent on economy of trade partners. These trade partners include USA, Australia, UK and Japan. Based from my experience in the recruitment sector, the interaction is more complex, however, when it comes to its effect on the demand of IT and IT-enabled skills. Growing economy of trade partners will almost certainly increase demand. However, will yield skewed results when their economy is on a downturn which I will explain in #3.
3. Laws and Attitudes towards Outsourcing. There are positive and negative views of outsourcing. On one hand, it significantly reduces the cost of manpower by tapping to new job markets that offer lower wages thus saving cost and gaining competitive advantage over those who do not outsource. On the other hand, it is viewed as “stealing jobs” and importing it to developing economies. These attitudes change overtime and become friendlier towards outsourcing. However, when economies experience recession legislature and elected leaders tend to put outsourcing in the spotlight and use it as a platform of “bringing home the jobs.” The effect of which are policies that are not friendly towards outsourcing IT and IT enabled skills.
4. Currency Exchange Rate. Like any imported or exported commodities, IT and IT enabled skills are affected by sudden changes of exchange rates. The success of outsourcing in the Philippines is partly the job of Central Bank which maintains a steady rise and drop of exchange rates. So far, they are doing a good job based from the latest customer rating survey. Companies maintain an “ideal exchange rate range.” If the Philippines Peso jumps to high, the cost of companies increases and the demand for IT skills drops. High fluctuations of exchange rates also decreases the demand because it shows uncertainty to new comers.