Loyalty: it's a tango

One of the local oil majors--an "old age" company in today's digital jargon--was once noted for its employee loyalty.

Its long service awardees were so numerous they formed an association, many of whose members went on to do contractual work for the company when they retired.

That was then, in the 1970s and 1980s, when retiring from your company after 25 or more years of service was a smart career goal for employees. They called that employee loyalty.

A fair number of companies were loyal to their employees and vice versa. That was a great win-win situation.

Today, well, loyalty seems to be a significant casualty of the information age. And this isn't solely the fault of employees.

"Downsizing," "rightsizing" or whatever euphemisms companies conjure up for that stab in the back called massive employee layoffs probably triggered employee disenchantment with companies as institutions worthy of their loyalty.

Technology's short life span also seems to have been carried over to the workplace. Employees of information and communications technology (ICT) companies hardly see themselves retiring from their companies, which might soon be "obsoleted" by newer technology.

What we have today are old age companies downsizing to become "more agile" in a hurry up marketplace and new age companies trying to make their millions fast before new technologies or paradigm shifts snuff them out.

Not fertile ground on which to sow the seeds of employee loyalty among the 20-something generation.

Taking root
But loyalty’s still out there and appears to be taking root in call centers, today's hot employment ticket. Call centers are young (less than one decade old) companies well known for their high salaries.

There are some 120 call centers locally, many of them up and running--and frantically searching for agents. Just look at the want ads every Sunday.

But with attrition rates in call centers becoming more of a problem and the replacement pool still shallow, new emphasis is being placed on efforts to make agents stay put for as long as possible.

It costs a company a lot of money and time to train agents to required proficiency levels and a company has to recoup that investment in the form of revenue growth.

Call centers do realize it costs less to maintain veteran employees than it does to recruit and recruit new employees. Problem is that good help is really hard to keep in call centers.

Poaching and job-hopping are major challenges facing call centers and, obviously, aren't conducive to employee loyalty. And you've got these problems because of the relatively good pay at call centers: starting salaries today are at P20,000 compared to P16,000 in 2004.

The rewards for those who remain loyal to their call center can be astounding, however. A call center president I interviewed said some of his senior executives make over P100,000 monthly.

Many of these people, said the president, have been with the company the longest. The company opened for business just four years ago.

A two-edged sword
A high salary is a two-edged sword, however. It can keep a loyal employee from jumping ship but won't stop someone who knows he can earn more by constantly job-hopping. So it's a race to keep the veterans loyal and to find replacements for those who leave.

Newbies, however, are also in short supply. Some reports say call centers now hire only one or two out of every 100 applicants.

This country produces about 400,000 college graduates annually. Probably 15% to 20% of these youngsters qualify as passable English speakers.

That's 60,000 to 80,000 candidates to meet the annual needs of 120 call centers. A 1% to 3.5% take up rate means that from 600 to 2,800 candidates get to be hired.

Add to the exacting hiring standards a creeping churn rate (call centers are said to be losing from 10% to 30% of their agents per year) and you see the case for encouraging employee loyalty. Industry data show 100,000 agents were employed by call centers in 2005.

Sitting on their hands until the Class of 2017 hits the employment line is a non-option for call centers. This will be the first generation to fully benefit from English's return as a medium of instruction in 2003.

These kids will have spent 14 years in English-friendly school environments, so call centers will have before them a deeper and better quality candidate pool.

BPO: the next generation
The big problem is that many call centers might not be around by this time. Many would have moved up the value chain in the "business process outsourcing" (BPO) industry.

Higher level BPO, however, isn't dependent on people who speak with American accents.

It demands knowledge workers to service the backroom operations of foreign clients. These operations include finance, accounting, payroll processing, healthcare, human resources, insurance, engineering, biotech, multimedia, research and development, design and ICT.

Credit card or stock trade processing, finance and administration, indirect procurement and human resources are among the jobs being now being farmed out to local BPO firms.

The government sees a BPO take off in 2006 and expects BPO revenues to soon outstrip those of call centers.

The shift towards BPO, however, means that academic and professional excellence will soon replace verbal excellence. BPO firms will need a lot of smart kids in the future. And these BPO employees will probably face the same challenges to loyalty as do their call center counterparts today.

One hopes that by this time, both factors in the loyalty equation--the company and the employee--will have re-learned the "old age" moral that loyalty is always a "quid pro quo" arrangement.

It will always take two to tango. Employers will have to be loyal to their employees before employees can be loyal to their employers.

You can't dance the loyalty tango any other way.