Senator Mar Roxas commented that after more than a decade as a “sunshine industry,” the country has not yet captured the somewhat higher end of the outsourcing business, such as software-writing, engineering and other higher-end development processes.
As such, most employees in Philippine BPOs are in call centers, where they are often called as “talents” and the jobs revolve mainly on answering or making phone calls, taking in orders or reservations or doing some tele-marketing for a foreign contracting company.
The level of simplicity or complexity of the information needed to respond to phone queries or to market products is used as basis for the salaries a call center agent receives. Experienced technical service representatives assisting customers in relatively complex matters such as running an equipment or program receive a relatively higher salary compared to ordinary call center agents who deal with reservations or as simple as directory assistance or processing local contracts.
Local salaries, said Kabataan Partylist Rep Palatino, are much lower compared to the salaries being received by call center workers in other countries, even in other outsourcing countries such as India, Thailand, Malaysia or Singapore.
Naga City pitches for call center companies to locate in the city. (Photo by Marya Salamat / bulatlat.com)
Since early 2000s call centers have been touted as ‘the way to go’ for new Filipino graduates, competing with migration as an option for some young and even middle-aged professionals. The industry boasts of high-octane come-ons such as above minimum wage rates, cool co-workers and various perks on the job, including a hefty signing bonus, etc.
Yet, it is the relatively low cost of Filipino labor and their ability to speak English and copy western culture that have been luring huge foreign companies to the Philippine contact center industry. It is at present largely owned or controlled and operated by multinational companies, if not adjuncts of the big telecom companies.
It appears that even big Indian companies with established outsourcing contracts have located their “voice” operations in the Philippines.
“More and more people are now realizing what the Philippines has to offer. All big outsourcing companies in India have operations here (in the Philippines),” said Maulik Parekh, president and CEO of SPi Global Solutions, a leading BPO provider with 29 locations across North America, Europe, and Asia. It has more than 14,000 employees in the US, Europe, the Philippines, India, and Vietnam. In this year’s CCAP conference, Parekh said he wants to take advantage not only of the “voice” in the Philippines but also of its “innate understanding of health regulations in the US” in the next 10 years.
This coincided, by the way, with the Philippine call center industry’s thrust starting this year of expanding its workers’ services to include “complex tasks such as technical support, more comprehensive customer service and higher-level programs.” This will relatively improve the low-end services the contact centers here have been selling, but not necessarily the wages of call center employees.
The move is geared more to “enable companies here to compete globally for higher valued services skills-wise, price-wise and technologically-wise,” said Jojo Uligan, executive director of the Contact Center Association of the Philippines (CCAP), in a statement given to the press during their annual conference last September. CCAP is “the oldest and primary contact center industry association” in the country, with member-firms that make up 85-percent of the call centers in the Philippines.
Comparatively Low-Salary, High-Stress, Insecure Work
Despite the supposed high salaries of Filipino call center agents, they could only out-earn their American counterparts by 2037, based on a Watson-Wyatt study released last year and published by the CCAP magazine “Connect”. At that time, the salary rate hikes for the “low-cost but qualified labor” of Filipinos were rising at 9-percent on average versus 3-percent in the US.
The average basic salaries in call centers today range between P16,000 to P17,000 ($366 to $389), estimated Uligan of CCAP, in the sidelines of their annual conference this year. Uligan’s estimated average salary falls in the middle of the “P15,000 to P20,000 ($314 to $419) average starting salaries in 2009,” which then Senator Mar Roxas cited when he warned the industry against “cost-creep”, or “labor cost inflation.”
Mar Roxas, a known industry supporter since its birth and growth from his various positions in the Estrada to Arroyo administration, warned the industry last year against “pricing itself out of the market”, as the Philippines and the BPO industry then vowed to continue expanding despite or because of the financial crunch in the US and Europe.
Even as the salaries of Filipino call center employees are comparatively lower globally, since last year, the industry has taken measures to cut costs, largely through slashing its budget for salary increases, reducing paid hours such as overtime, streamlining or reducing the number of people per team – without correspondingly reducing the expected output – putting employees on extended leave or terminating employees.
Some call center companies, especially the small to medium ones with 50 to 300 seats, have also closed down as a result of the financial crisis in US and Europe, Uligan said.
The industry’s employed workforce has actually gone down from the 372,000 in 2008 to this year’s projected “growth” of 344,000 employed by year-end. The number of employed is not the only thing that has slid down.
According to a 2009 study of Watson Wyatt, a global human resources consulting firm, majority of contact centers in the Philippines decreased their original budget for salary increases for 2009 from 8.40-percent to just 5.36-percent. That was the “sharpest decline on a year-on-year basis and the lowest in more than 20 years,” noted Watson Wyatt. The cut was much lower than the Philippine’s projected national inflation of 8-percent, it added.
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The BPO is a very promising industry, but as the report points out, if we only take the low-end jobs (i.e. call center) we won't be getting the best out of it. The BPO industry must aim to attract high-paying jobs that would enable our IT's or engineers… to use their skills in such jobs. The industry deserves the support it gets from the government, but at the same time, it is also important to protect the welfare of those working in the industry.
This is the illusion being fostered by this industry. The call center "industry" hardly makes a dent in the country's needed jobs, at the cost of offering Pinoy new grads as some of the lowest paid qualified labor in the globe. That is "lucky"? Geez! If asking for fair, humane, treatment and better job could threaten this industry, whose interests are you advocating for?
We should be lucky and thankful for the call center industry. WIthout it, many Filipinos would have gone abroad for a lower income or would have gone into the poverty line. The call center industry provides more jobs to graduates who can't find a job in the degree they took up, maybe because they still lack the hard or soft skills or need work experience first. Geez! Don't destroy this industry only because it doesn't jive with your interests or advocacies.
it is not "destroying" the industry as you put it, the government must see to it that the workers, must be given their due. there's what you call security of tenure, which by the way is filed in Congress to help protect workers from contractualization and de-regularization.