MANILA, JULY 31, 2008
(STAR) By Eden Estopace - There is no better proof of Thomas Friedman’s revolutionary concept that the “world is flat” than the emergence and boom of the call center industry in the Philippines.

Now with 151,000 seats and 205,000 employees, Philippine call centers are poised to grow even more rapidly in the next few years, with projections of a 23-percent growth through 2009, according to Dan Reyes, president of Sitel Philippines and director of the Call Center Association of the Philippines (CCAP).

“Call centers are the torchbearer of the business process outsourcing (BPO) industry,” said Reyes during the opening of the Call Center Conference and Expo 2008 at the SMX Convention Center in Pasay City last Wednesday.

In this industry, he said, there is no tomorrow because Philippine call centers are already operating 24/7 and serving different time zones.

The two-day conference came at a time when call centers are reeling from the effects of a global economic downturn, falling foreign exchange rate and the looming impact of a recession in the United States, which is the country’s main BPO market.

Admittedly, Reyes said the challenges are greater now, but the industry is also much larger, more resilient than it was when CCAP was established seven years ago with only seven members.

In fact, if there is one thing that the current business climate has given the industry, it was opportunity, not loss.

Call center executives led by Reyes, Raffy David of Pilipinas Teleserv, Vic Endaya of Advanced Contact Solutions, Benedict Hernandez of eTelecare, and John Langford of ICT Group are one in saying that the weakening of the dollar and the US economy has directly hit the bottom line but it has also led the industry to diversify and look for other markets outside the US like Australia, Canada, New Zealand and Europe.

It has, among others, also driven companies to streamline operations to explore cost-efficiency improvements, increase volume of work and quality and strive to be on clients’ top tier service providers. And the effort paid off.

According to Reyes, CCAP, with 39 members and a combined strength of 97,700 seats and 134,000 employees, is expected to grow by yearend to 31 percent to 176,000 seats and 239,000 employees.

Revenues are also expected to grow to $4.34 billion by end of 2008, accounting for two-thirds of the projected BPO revenues for the year of $6.7 billion.

“If anything, the economic slowdown and price pressures should lead companies to operational efficiencies and cost structures,” Reyes said.

“Last year,” added Hernandez, “we got the opportunity to be better because we were faced with projections that were falling down the ground. Because we couldn’t influence the way the exchange rate is moving, we recourse to controlling what we can control better like efficiency, productivity. It has given us more focus.”

Another way of looking at the US recession is that it may even lead to more outsourced work to countries like the Philippines, according to Reyes.

“Because of the recession and its impact, calls will definitely go down for those companies which have already migrated here, but on the positive side, those not yet in the Philippines may have more pressure to offshore,” added Endaya.

As it is now, the Philippines is in the top 10 of the 2007 A. T. Kearney Global Services Location Index and was named the Best Offshoring Destination in 2007 by the UK-based National Outsourcing Association.

“Besides,” Reyes said, “the Philippines is no longer competing solely on cost arbitrage but on quality.”

Retooling for the future

In a presentation on global call center trends, William Dieu, senior research analyst at callcentres.net, introduced seven key drivers for the call center of the future.

Dieu said that, among others, a call center will continue to be the most strategic business unit in an organization as majority of customer contact is made through it.

Because of this, call centers are more going in the direction of becoming profit centers with primary revenue-generation responsibility.

In fact, in the Asia-Pacific, revenues generated from inbound and outbound calls reached $665.4 million in 2007. This is projected to grow to $13.1 billion in the next seven years.

Are Philippine call centers taking advantage of this wave? Dieu said a large percent of call centers in the country now have upselling and cross-selling opportunities, so they should be able to ride that wave.

Another thing in the horizon for call centers is the coming of the so-called Generation Y, which is expected to change the landscape of call center services of the future.

“This generation has a high preference for interacting with organizations using Internet and Web chat. It has low preference for speaking but prefers voice channels over the Internet,” said Dieu.

In line with this, he said more Philippine call centers are moving toward IP enablement.

During the press luncheon, the call center executives led by Reyes disclosed that the average age of call center workforce is 23. Admittedly, turnover and agent attrition is high. Dieu’s presentation revealed that full-time call center agents stay in a company for 22 months on average, part-time employees around 10 months, team leaders a little bit longer at 41 months, and managers up to 71 months.

“The call center is a people’s business,” said Reyes. “The positive trend is that as far as retention is concerned, there is already a significant increase in the number of months people stay in the industry. Our collective programs have helped our objective of not only retaining talent but making them happy.”

Hernandez also revealed that the Philippines is even enjoying lower attrition rates compared to other countries.

Among others, the call center industry has always been known for paying more than any other industry, with even better incentives.

“We look for talents with specialized skills and pay higher; we are creating opportunity in the workforce to move up,” Hernandez said.

But more than this, the industry is also striving to provide an even better working environment for agents inasmuch as call center employees work on graveyard shifts and ungodly hours.

It is now the norm, the executives said, in most call centers to have a 24/7 cafeteria, a place to take a nap or rest, and game rooms where they can hang out with friends.

“The thing is when you are 23 and you have income, you hang out, buy cigarettes, chill out. Part of our program in taking care of our people is to make them aware of managing their lifestyles,” Hernandez added.

The next wave

In his keynote speech during the two-day conference, Senate President Manuel Villar praised the social impact of the call centers in the country.

“The call center industry has given opportunities for people who want to stay in the country. More than jobs, it has given our people a psychic income. Those who would have left are now gainfully employed here,” Villar said.

Hernandez affirmed that more than jobs and revenues, the call center business has contributed to national pride.

“We have proven to the world that we could actually do a better job,” he said.

Perhaps even more than pride and jobs and psychic income is the expanding impact in cities outside Metro Manila.

In a statement, the CCAP bared the so-called 10 next wave cities nationwide, which are identified as new locators and crucial to the industry’s expansion in the next few years.

These new cities include Cebu, Bacolod, Baguio, Laguna, Batangas, Angeles and Dumaguete.

“We are proud of the fact that this phenomenon is not isolated in Metro Manila. More and more Filipinos are benefiting from the investment and employment opportunities provided by outsourced and in-house contact centers nationwide,” Jojo Uligan, CCAP executive director, said in a statement.

The CCAP executives affirm that setting up shop in cities outside Metro Manila has even greater social impact. For one, the quality of the workforce is the same and the industry builds a culture of loyalty in the locality.

This way, the industry encourages young professionals to stay and at the same time attract many others to go back.

“The industry continues to be vibrant and thriving. We are looking forward to achieving new heights to become a global call center powerhouse,” Reyes said.

The world is flat, according to Friedman, because it has leveled the global playing field in terms of work opportunities. A call center agent in the Philippines can provide the same quality of service to a European client, for example, as his counterpart in India or China. The issue is not on who could do it but who could do it better at more competitive levels in the global marketplace.

Chief News Editor: Sol Jose Vanzi

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