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Call it a boom: Philippine call
centers
By Marco Garrido
MANILA - A New Yorker calls directory assistance
for the address of the nearest Pizza Hut. He is serviced
by an operator whose English may sound even more
"American" than his. Except, of course, the operator is
neither American nor even in the United States. The
caller is being led to the Pizza Hut down the block by a
Filipina in Manila. She handles his call with a sparkle
of perfectly intoned English phrases - "How can I help
you?", "What seems to be the problem, sir?", "The
information you requested is coming right up" - then,
without missing a beat, turns to her Filipino seatmate
and gossips in Tagalog.
Tuan Nguyen, a
Vietnamese-American, manages the Manila office of
I-TouchPoint, an Indian call-center firm. Nguyen's
office fields a share of directory-assistance calls
coming from New York. One consideration in the selection
of his operators is their ability to speak a
neutral-sounding American English. Indeed, for
I-TouchPoint and other call-center firms, a key
consideration in the choice of the Philippines as a base
of operations is the ability of Filipinos to project
"Americanness".
The friendly
American
While India remains, by far, Asia's
preeminent call-center hub, the Philippines is gaining
proportionally. Both locations, of course, allow US
companies such as American Express, AOL Time Warner, and
Dell Computer the opportunity to reduce their overhead
substantially by minimizing labor costs. Mark Leigh,
president of Avaya Asia Pacific, notes that companies
can save 30-40 percent on each call-center agent his
firm hires in the Philippines compared with agents hired
in the US. This can amount to a saving of US$1.5 million
a year for an operation with 100 agents.
The
United States alone has 1.5 million call-center "seats"
to outsource. (A seat is a station usually manned by two
or three persons alternating in shifts to provide
24-hour call service. The number of seats is used to
describe the size of an operation.) As it is, India has
about 300,000 seats, while the Philippines has only
about 10,000.
The Philippines, however, has an
edge in terms of the quality of its customer service. A
1999 regional study conducted by Australia-based Call
Center Research rated the Philippines second only to
Australia in customer-service quality. India ranked four
notches below. A large part of this edge would seem to
consist in the combination of an American accent and
Filipino amiability, as if the Philippine advantage is
its ability to project the illusion of an American agent
but friendlier.
"We're unbeatable when it comes
to the way we speak English," says Domingo Guanio,
assistant vice president of Software Ventures
International. "We're also more patient in handling
calls and more customer-oriented." Bong Borja, president
of People Support, agrees: "We're one of the most
hospitable people in this region and we do that
naturally ... [Also, a] majority of our calls come from
the United States, and, yes, the Philippines has a very,
very strong affinity to American culture and current
events."
Michael Henderson, managing director
for Asia and the Pacific Rim for Sykes, believes that
too much is being made of Filipino "Americanness". There
are other reasons for call centers to invest in the
Philippines; in particular, for its pool of qualified
information-technology (IT) graduates and for its
telecom infrastructure, which is considered even better
than India's. Nevertheless, Henderson admits that the
Filipino accent may be more appropriate to the North
American market than would an Indian's British accent.
America 101
Much is being made of
accents because much is at stake. According to the
Philippine Department of Trade and Industry (DTI),
revenue from the 22 call-center companies in the
Philippines - whose clients include the likes of America
Online, Verizon, and American Express - is expected to
increase from $173 million in 2002 to $864 million in
2004. This boom is expected to generate about 24,000
jobs in the next two years. That is, if there remain
enough candidates qualified to fill the growing number
of positions.
As it is, the industry seems far
from its saturation point. The demand for qualified
operators continues to outpace the available supply.
However, government and private enterprise are
collaborating to address the issue. The Contact
Federation of the Philippines (CFP), an organization of
local call-center firms, is working with the Technical
Education and Skills Development Authority (TEDSA) for
the accreditation of schools solely devoted to training
call-center agents. According to CFP chairman Bong
Borja, these schools are designed to address the core
competencies needed to develop world-class agents. The
cultivation of such competencies apparently requires
lessons in US geography and culture, as well as courses
in accent reduction.
Call-center schools aim to
impart or, more accurately, refine a fluency in
Americana because such fluency improves business. The
"American Culture and Geography" module offered by the
Call Center Academy of Pasig aims to help students
"project themselves as educated, knowledgeable
individuals capable of attending to customers' needs and
requirements". To this end, the course promises to
familiarize students with North America's "immense land
area, which involves time zones, geographical regions,
their regional characteristics, [and] nuances of the
varying lifestyle [sic] thereat".
These schools
train their students to provide service that is not only
pleasant and efficient but, to Americans at least,
familiar. Since the clients of local call centers are
mainly American, being able to project and maintain the
illusion of America has become one hallmark of good
customer service. This illusion is so carefully
maintained that, according to one operator, if asked
their whereabouts, call-center agents for American
Express are instructed to say that they are based in St
Louis, Missouri, or Salt Lake City, Utah.
Still another country
The Philippines,
however, is not America. While, on the one hand, this is
precisely the reason the call-center business has come
to the Philippines - because costs are markedly lower -
it may also be the reason that the business stays away.
Investors continue to view the country as
unsafe. Entrenched conflict with Muslim and Maoist
rebels and sporadic terrorist attacks, most recently the
bombing of the Davao airport and seaport, confirm
perceptions of instability. Although conflict remains
largely confined to Mindanao, the whole country is
stigmatized nevertheless. "What can you do," asks
Nguyen, "when the US Embassy issues travel advisories
warning against coming to the Philippines? There is no
question that perceptions of instability deter industry
growth."
Inconvenient investment regulations can
be another obstacle to investment. To be sure, the
Department of Trade and Industry is doubling over itself
to entice foreign investment in the domestic call-center
industry. As an investor "you have their ears", says
Nguyen. "They will level the playing field for you."
However, unlike India, the Philippines allows duty
exemptions for foreign companies by area and not by
business. For one, this means that foreign-owned call
centers cannot be selectively exempted from paying
duties, however much the DTI may wish to encourage the
industry's growth. For another, this limits the choice
of real estate for these companies to designated
cyberparks and other special duty-free economic zones.
Prosperity without
progress?
Nevertheless, the prospects for the
call-center industry in the Philippines remain bright.
Outsourcing customer service to cheaper locations has
become a business imperative for US companies. While the
Philippines may never rival India in terms of the sheer
number of call-center seats it can attract, Rob
O'Malley, chief consulting officer of Asian Call
Centers, believes that the country is well positioned to
become "a niche player for more complex call-center
activity".
For Filipinos, call-center positions
are coveted jobs. With a starting salary between P10,000
and P15,000 (about $200-300) per month, operators are
paid comparatively well for fresh college graduates.
Their pride shows in their service. According to Bong
Borja, Filipino operators display a higher level of
dedication to their job than do their American
counterparts: "While in the US, the turnover rate for
call centers is almost 100 percent annually; here it is
considered a career."
However, the question is,
what kind of career is it? The fact that the current
boom in the call-center industry owes a lot to the
global fallout in the IT industry - particularly in
terms of outsourced jobs - should serve as a caveat
about the vagaries of transnational business in an age
of globalization. While no one may be arguing against
the prosperity the industry is generating, concerns over
its sustainability are indeed warranted.
Moreover, if operators are largely hired for
their ability to impersonate Americans, how do these
jobs prepare them for productive careers as Filipinos?
Tuan Nguyen believes that these jobs can serve as
"stepping stones" to positions in sales, human services,
and even management.
Technology forecaster Paul
Saffo is not as optimistic. Speaking of India (though
equally applicable to the Philippines), he warns that
"care has to be taken to ensure that there is a career
path beyond call centers - otherwise what began as the
well-intentioned creation of jobs could end up being
exploitative of India's most important resource, its
youth".
(©2003 Asia Times Online Co, Ltd. All
rights reserved. Please contact content@atimes.com
for information on our sales and syndication policies.)
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