In the Philippines, when you work hard in school, graduate well, and apply that same hard work to your early career, opportunity abounds. In particular, Filipinos have the ability to work abroad as “Balikbayans” or “OFWs” (Overseas Filipino Workers). For the last two decades, money that OFWs sent back to their families was the single largest source of revenue for the Philippines.
Jeremy is a part of a big, talented family. He’s the youngest of five siblings, but the only one still living in the Philippines. He stays to take care of his mom, who is old and infirm and hasn’t been able to work for some time.
While Jeremy was in school, his siblings supported him and his Mom by sending money back to the Philippines every month, so Jeremy could go to school, and he and his Mom could afford to live. He was grateful for what they were doing for him, but he yearned to be able to stand up on his own two feet, and provide for him and his Mom on his own, all from within the Philippines.
Jeremy was a stand-out student at his local government-run school. He graduated with a degree in Information Technology, and he loved writing software. But, when he went out to the local job market to find a job, he was told that the things he learned and skills achieved in school were insufficient for what many employers needed.
So, he did what a lot of young Filipinos do when they can’t find work in their field. In November of 2015, he accepted a job as a data entry person in a new BPO company called Rethink. It wasn’t what he wanted for his career, but it was a start.
He got into Rethink and began working hard. The company was small and was very much like a family. The leader of the division in the Philippines, Walter, knew all of his employees and treated them fairly. Soon, he was leading the small team of data entry people and interacting with the client.
The client gave him good reviews, and Jeremy stuck with the client for a year, over which such time, the Client felt that Jeremy was invaluable to the success of the client’s small company. The client even went so far as to put Jeremy on the client’s website, listing him as an employee.
Shortly before his year mark, he had a conversation with Walter, who had already recognized Jeremy’s technical skills. Walter asked him if he wanted to move to a different position that was more technical. Jeremy would be working with the company CEO and founder to start building an internal software platform to help manage the company’s day-to-day operations.
Of course, Jeremy jumped at the chance. Building software was what Jeremy always wanted to do since he chose IT as his degree in his University. But, there was just one problem: What would the client say when told Jeremy was leaving?
Clients hate staff turnover. BPO suppliers hate it, too. At a typical BPO supplier, companies pay for the time it takes to train Agents, not the clients. Big BPO companies’ attrition rate is so high (industry average in the Philippines is 50% per year) that clients just won’t pay for training, knowing that the majority of Agents don’t stick around for even a full year.
So when an Agent like Jeremy sticks around for a while, gets promoted to a team lead, and continues to perform well, he’s crossed the investment/profitability threshold many times over for both the supplier and the client. Of course, as profit-maximizing businesses, both want that profitability to continue unchanged.
But more important than lost profit is what’s known in economic terms as switching costs, which can be very high. It’s the cost of losing Jeremy, backfilling his position, and training his replacement. This can mean lost productivity, lower quality work, and a disruption in service. If there’s a disruption in service, then the client can claim a discount or refund, a further erosion to profitability for the supplier. As I said, clients and suppliers alike hate staff turnover.
So, when Walter approached the Client to tell him that Jeremy was accepting another position where he could better grow his skills, the Client was incensed. Even though Walter said that Charles, another Agent on the Client’s team, was taking over and more than capable and the client wouldn’t notice the difference, the Client didn’t back down and called me to complain.
Of course, I initiated this new position for Jeremy and was surprised to hear the client’s reaction. When the client signed up with Rethink, I specifically told him that he was “hiring a system, not a set of individuals” knowing that people leave and change and grow — that’s the only way humans know how to be. It was a standard part of my sales pitch to prospective clients.
The Client was unconvinced. So, I finally said to him: “Are you saying that if we don’t keep Jeremy on the account, you’ll cancel your contract?”
He replied yes; I had a choice to make.
I was visiting our operations in the Philippines at the time and took the call while driving to the office one day. I told the Client that I would think about it and get back to him.
Two days later, I sent a contract termination notice via email and sketched out a 30-day ramp-down plan. I had fired my first client.
In market-based economies, Opportunity is the life-blood and path to personal growth and economic security. The more opportunities you cultivate, the more choices you have. It’s basic economics — diversification is the key to security.
But the existing BPO supplier economic model hates staff movement — because it can mean lost revenue, and of course, new investment in training new people (ignoring the fact, for a second, that the environments that most BPO suppliers create are toxic enough to have high attrition rates).
That’s why we have ABOR #3: We will never deny you job movement or advancement. It has a huge benefit to our agents, our clients and us. It keeps our environment producing at high quality, keeps it dynamic, and forces us to figure out not just how to change, but how to change well.
How can you prove it? Well, ask yourself this: what if I told you that you were going to work in the very same job you’re in, right now, at this very moment, until the day you died? How would you feel? Would that make you excited, hopeful, or dreadful at what the future holds?
After you’re done answering that question for your current position, now consider this: what if I told you that your current job was answering customer service calls for 8 hours or more a day? Would you answer that question differently?
Of course, you would. And every call center agent would answer that question the same way you would answer it: “I need change in order to survive and grow as a person.”
But beyond promising our Agents not to be bored, more than anything else we’re promising them an economic opportunity (if we have it available). We want them growing, learning, and moving on to higher value work. This is core to our economic and management philosophy.
Only people that are growing, taking on new challenges, and capturing new opportunities are happy. This is basic human psychology that has defined us for millennia (and probably made us the dominant species on the planet — see Yuval Harari talking about intersubjective realities).
But most importantly, if we promise progress, agents no longer feel like they’re only working today to be stuck in a rut tomorrow. They know they can grow and change, and eventually change jobs. So what do they do? They work harder and try to be better at their current jobs. At Rethink, only mastery in their current work plus capacity building can lead to career advancement for our Agents. The result? Clients get much higher quality work at the same or lower cost of other BPOs.
The client that I fired didn’t get it — if he was just willing to deal with a little change (and keep in mind that Charles took over as team lead for Jeremy — and we backfilled a junior person on the team with whom the client had no interaction), he would get much better results than if Jeremy stayed on the team — especially after knowing that the client prevented him from having his dream job.
And this concept is included in the way we run the company, including our compensation policy. At Rethink, we do not have tenure raises. We only have merit raises (though we do make compensation adjustments every 6 months for inflation).
Our people know that the best way to make more money with us is to advance in their jobs and their skills, and they are handsomely rewarded if they do. We have people working for us who, after just 2 years of employment (because of their skills and room for advancement), are making 6 times what they made when they started with us.
(Author’s note: Jeremy — not his real name — is currently making twice what he made when he started with us. As a junior software developer, he’s earning 2.6 times the minimum wage, 10 times the local poverty rate, and 1.2 times the middle-class wage. Again — economics.)
It’s our own little global meritocracy. And, it wouldn’t exist if we didn’t promise the ability to move or advance in your job.