Hopes high for RP call center industry

China’s entry into the World Trade Organization (WHO) has struck fear in many countries in Asia as the awakening giant is poised to gobble up business not only in the region but in other parts of the world as well. Already, many companies are choosing to do business in China primarily because of lower costs, thus taking away much-needed foreign investments from other developing economies such as the Philippines. But there’s at least one field where the Philippines remains confident of being at par with, if not ahead of, the competition – the contact center or call center industry.

Estimates by various analysts place the market for outsourced call center seats out of the United States alone at between one million to 1.5 million seats, of which only about 0.5 percent or less than 10,000 are currently being serviced by the Philippines. India, considered the country’s strongest competitor in the call center arena, has about 300,000 call center agents.

200% growth

The industry reportedly posted a 200-percent growth in the previous year and local contact center companies expect this trend to continue. The Contact Federation of the Philippines expects to generate some $374 million in revenues by end-2002. This figure is likely to double by 2004 when revenues from call center outsourcing are projected to reach some $864 million.

Data from JobStreet.com, the leading online recruitment company in Asia through which many call center companies hire their agents, indicate that the Philippines could get a much bigger slice of the call center pie as more firms in the US, Australia and Europe are expected to outsource their e-service requirements to the country. At least seven existing call centers are expanding operations by more than a thousand seats to accommodate the demand.

While India is way ahead of the Philippines in terms of software development outsourcing, it is not so in terms of call center outsourcing, according to Bong Borja, chairman of the Contact Federation of the Philippines and managing director of People Support, a local call center company.

Better infra

"We have better telecommunications and utilities infrastructure than India. Here, you can set up a contact center by leasing an existing world-class facility. In India, chances are if you want to set up a world-class facility with generator back-up, you’re going to have to build everything," Borja said.

"In some cases, you also have to provide your own local telecommunications loop. So, in terms of initial investment in setting up a contact center, the Philippines has it ahead of India. This cannot be quantified since investment costs vary depending on the type of contact center and facilities you want to set up," he said.

In terms of salary, the Philippines is slightly more costly than India. Here, the monthly salary range for a call center agent could go up to $340, while in India, companies pay a maximum of $320. The kind of service provided by local call centers, however, could easily compensate for the slight difference in labor costs.

"The Philippines has great human capital. Our workforce speaks good English, are well-educated and are more dedicated and committed to their work," said Borja.

Lack of facility of the English language is what sets China back in the call center outsourcing race. But the Chinese government is going all out to address this problem by having English taught in secondary schools. Once these high school students enter the workforce in a few years’ time, call centers would be looking at a much stiffer competition.

"China is upcoming. The country itself has a big local market and that alone is a big advantage for them," said Nerissa Reyes, president of Asia Call Center Link, which provides internationally recognized training for call center professionals in the country.

Ensuring quality

While it is still relatively cheaper for foreign companies to outsource in the Philippines, she said costs would eventually even out. The only way for the country to maintain its edge is by ensuring the quality of service provided by local contact centers.

"There is a shortage of quality, skilled workers right now. For example, out of 1,000 applicants for call center positions, only about 10 percent are qualified. It really has to come from the educational system," Reyes said.

"We are trying to fill this gap by providing basic training for aspiring call center professionals. We want to help keep the quality and standards of the industry because if our call center professionals are not qualified, we will self-destruct," she added.

Raffy David, vice president of the Call Center Association of the Philippines and marketing and quality director of Pilipinas Teleserv, couldn’t emphasize more the need to improve the quality of the country’s labor force to maintain its advantage over its competitors.

"By virtue of population, India has the upper hand. Each state in India graduates about a million people every year. Here, we only have about 475,000 and that’s from varied fields," David said.

"The question is really the quality of education. We have a lot of graduates but there is still a need to enhance the quality of their understanding of the field. Ideally, they should be able to communicate well and understand their product and give the right solutions to a customer’s problem. If you find those two qualities in a candidate, you take him in, train him and continually help him upgrade his skills," he said.

Contrary to common understanding of the call center industry, David said this business is not really about technology but more about service. Though theirs is an IT-enabled service, the more important component is the people providing quality service.

"We could easily overtake India. They’re not that far ahead. They’re competitors in terms of being an emerging call center hub like us but we have the advantage. We just have to go out and get the projects and serve them well. The window of opportunity is now. If we don’t secure these projects within the next three years, the opportunities will just pass us by," he said.