In fact, while the Philippines may be the 39th largest economy in the world, it leads the entire globe for one thing: the BPO Industry.
Some of the companies that employ the most Filipinos at their call centers here include Citibank, JPMorgan, Wells Fargo, Capital One, and American Express, as well as Verizon, Convergys, Qualfon, and Genpact. Not just dedicated to picking up the phone for U.S. customers anymore, more and more BPOs are also serving Australia, New Zealand, the UK, and other English-speaking countries.
While Metro Manila was once the crux of the BPO industry here, high operating costs (and traffic!) in the nation’s capital city are pushing employers to look elsewhere. In fact, call centers are now firmly a part of life in Cebu, and rising in Davao. Even “second cities” like Bacolod, Iloilo, and Pampanga are fast emerging as attractive locations for companies.
Even Dumaguete is on the map for the BPO industry with several new call centers springing up, and our highly educated, young, workforce, low costs, and high quality of life sure to attract more.
“Dumaguete's Silliman University now offers a contact center certification program,” says Canadian Jozsef Kiss of My Support Team 63. “Where future call center agents learn how to handle difficult situations in an inbound and outbound environment.”
Youth is an asset in this industry, as the predominantly overnight work saps the constitution and disrupts a semblance of normal life, a lifestyle better suited for the young. And youth is one place where the Philippines excels, with about 90% of our population under 55 (compared to 61% for Japan and 73% for the U.S.).
But the biggest asset for the Philippines is their ability to speak native English, as even India is falling out of favor because of language idiosyncrasies and cultural barriers between those who call and those who pick up the phone.
The BPO phenomenon in this country started with a single call center in 1992, when a man named Frank Holz founded the Accenture Global Resource Center. The growing IT/Contact Center industry received a further boost in 1995, when the Philippines government established the Special Economic Zone Act, providing tax incentives and other sweeteners for foreign companies that set up their contact centers here.
As of 2011, the Philippines surpassed India as the country with the most call centers in the entire world.
In fact, call centers now employ about 1.15 million people in this nation of approximately 110 million.
Right now, call centers in the Philippines make up about 12.6% of the entire global BPO industry. Expected to generate $12.89 billion USD in 2017 alone, it’s the number two source of foreign revenue in the Philippines behind only overseas remittance, and expected to be number one soon.
According to American Kyle Davis, a high-level call center manager in Cebu, “Low operating cost is the primary reason companies outsource to the Philippines. The annual salary for one American agent will be the same as hiring around 4 or 5 agents from the Philippines. That’s important for companies who need to meet their SLA’s (Service Level Agreements), answering 80% of the calls within 60 seconds or less.”
The outlook for the BPO industry in the Philippines is even rosier. It’s expected to grow at a rate of about 9% annually for the next five years, by 2022 comprising 15% of the world’s total BPO industry, employing 7 million Filipinos, and bringing in $40 billion USD!
However, there are several reasons to exercise caution about continued BPO growth. For instance, the Philippines suffers through miserable Internet connectivity and subpar infrastructure. Likewise, international news headlines about Duterte associated with death squads, or Islamic extremists throws cold water on multinational enthusiasm.
But the biggest threat may be the emerging field of Artificial Intelligence, a widespread threat to the prospect of human employees in the BPO and IT industries.
Look for more about the human element of call centers – including the health and lifestyle repercussions of working night shifts – in part two of this column.
This article was originally written for the Dumaguete MetroPost.