Miriam: Ph will be world’s call center capital

[itzurisen]

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Sen. Miriam Defensor Santiago lauded reports stating the Philippines is fast overtaking India as the world’s largest BPO industry for voice-based customer support and sales.

While in India, Santiago read reports in Indian newspapers, among them The Economic Times, expressing concern that the Indian call center industry is losing US-based clients in favor of the PH industry.

source:
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[potterboy]

Link please. TY.

[digitalsuperman]

India worries Philippines will be world’s No. 1 BPO centre in five years

Christian V. Esguerra and Cynthia Balana
Philippine Daily Inquirer
Publication Date : 14-11-2010

The Philippines toppling India as the world’s top destination for offshore business process outsourcing (BPO)?

Filipino senator Miriam Defensor-Santiago thinks so, drawing from a recent visit to India where the industry was supposedly abuzz about the Philippines surging past the South Asian nation in five years.

Santiago on Saturday (November 13) said the prediction was that India would lose its lead owing to the steady growth of the local BPO sector, which was “expected to post US$5.7-billion revenues in voice-based customer support and sales for 2010.” In contrast, she said, India was poised to hit only $5.58 billion by yearend.

The senator said in a statement that Indian newspapers such as The Economic Times had expressed “concern that the Indian call centre industry is losing US-based clients in favor of the Philippine industry.”

The Philippines is the second largest BPO industry in the world, next to India. Industry figures place revenues generated from the BPO sector in 2008 at $6.8 billion for the Philippines, and $11 billion for India.

Filipino advantages

In a paper titled “The Great Call Center Debate: India vs the Philippines,” an official of a top US-based BPO company noted the advantages enjoyed by Filipinos over Indians in the industry.

“(Filipinos) speak idiomatic American English better than Indians, and their accent is more neutral. The Philippines is an outstanding destination for a wide variety of offshore services. They have gained great traction especially in voice work,” wrote Chris Repholz, senior vice president of Zenta company.

Santiago also cited “better affinity with the American culture, lack of competing industries for skilled workforce, and higher tax incentives” among the leading reasons behind “the unprecedented rise of the (Philippines’) BPO industry.”

The goal to overtake India is part of the five-year (2011-2016) road map for the country’s information technology and BPO sector. The objective is to expand it to a $25-billion industry employing 1.3 million people.

Santiago said she would file a measure next week seeking to “jump-start legislative support for the BPO industry, especially its workers.”

“Curiously, the Senate in the 15th Congress has yet to file any bill for the promotion of the call center industry and the protection of its workforce,” she said, and went on to urge her fellow lawmakers “to formulate laws supporting this booming sunshine industry.”

Labour violations

Santiago called for better safeguards for industry workers amid concerns such as “contractualisation and union-busting”.

She said her office had been getting complaints of “rampant and stark labour violations in the call centre industry,” including “unreasonable metric evaluations, compelled overtime and holiday work, long working hours … (and) the high attrition rate.”

“Legislators should study how our laws can adapt to this relatively new industry,” Santiago said.

She added: “Amendments in the Labour Code or an entirely different and separate law should be considered so as to protect the rights of call centre agents because of their unique work environment.

“We must balance the legitimate business interests of BPO companies with the labour rights of employees. I have heard that most call center agents do not stay too long in one company either because the work becomes more and more unreasonable every year, or there is no professional growth in the company.”

Workplace study

But the working conditions in the Philippine BPO industry are of “reasonably good quality” compared with those in developing countries.

That’s according to the International Labour Organization (ILO) in its first in-depth study of the workplace in the four top BPO destinations in the world—India, the Philippines, Argentina and Brazil.

The study, titled “Offshoring and Working Conditions in Remote Work” and released in Geneva in July, examined remote work, its impact on the labour market in general and the workforce in particular, and the possible implications for working and employment conditions in countries where the BPO industry is growing.

The BPO industry may be broadly divided into “voice” services such as call/contact centres, and “back office” services, like finance and accounting, data processing and management, and human resource development. Call centres make up 70 per cent of the local BPO industry.

‘Brave new world’

Very little is known about the working conditions in this rapidly growing industry worth about $90 billion, according to Jon Messenger, senior researcher of the ILO’s Conditions of Work and Employment Programme and co-editor of the study (with Naj Ghosheh).

“The BPO industry has at times been heralded as the wave of future knowledge work in a service and information economy, and alternatively, demonised as a ‘brave new world’ of electronic sweatshops. The reality, as one might imagine, is far more complex,” Messenger said.

“The bottom line is that this is an industry with the potential to offer a model for a future of good-quality service sector jobs and high-performing companies in the global economy,” he said.

Higher pay

The ILO study said Filipino BPO employees were earning 53 percent more than workers of the same age in other industries.

The average monthly salary is 16,928 pesos ($385), with benefits such as meal and transport allowances. Men earn 13 per cent more than women.

In general, the BPO workforce is young, well-educated and predominantly female.

Hours of work in the BPO industry are also quite reasonable by local standards, in stark contrast to the often excessively long hours of many workers in the developing world, the study said.

The average hours of work of local BPO employees are 44.7 hours per week. Overtime work averages 1.12 hours per week.

Night work, which is often associated with occupational safety and health issues, is common in the Philippines, with 42.6 per cent of BPO employees (51.7 per cent of employees in call centre positions) working the night shift to serve customers in distant time zones (primarily the United States in “real time”).

On the flip side, the ILO study said local BPO employees reported sleep disorders or insomnia, fatigue, eye strain and body pains.

BPO employees also have heavy workloads backed by performance targets combined with tight rules and procedures, all enforced via electronic monitoring and leading to high levels of stress, the study said.

“Back office” positions tend to be of higher quality than call center positions in terms of wages and working conditions, according to the study.

It said workers serving outside markets appeared to have better-quality jobs than those focused on domestic markets, mainly as a result of the higher skills required in international positions.

Continuing expansion

Analysing the impact of the global economic crisis on the BPO industry, the ILO study said some companies, particularly in the banking and insurance sectors, had suffered a considerable blow, but only in the short term.

It said some of the factors driving the industry’s expansion—such as the continuous search for cost savings and increasingly sophisticated and inexpensive technologies—were unlikely to diminish and could even accelerate in the medium to long term.

The study offered suggestions to improve the quality of jobs in the BPO industry and increase productivity. These include:

* Stronger measures to protect the health and safety of night workers in line with the ILO Night Work Convention.

* A redesign of work processes, especially in call centers, to allow employees more freedom to make use of their qualifications, as well as greater latitude concerning rest and toilet breaks.

* Policies and practices aimed at improving workers’ collective voice and promoting social dialogue.

[digitalsuperman]

Philippines to overtake India as global BPO hub

By BPO Watch India Bureau
November 04, 2010

Philippines to overtake India as global BPO hub
The Philippines may soon overtake India as the world's favorite back office for voice-based customer support and this dramatic shift could well become a reality within this year itself, a published newspaper report says.

The report in the Economic Times suggests that India may lose its top position in voice-based support and sales as a result of Indian companies actually moving these services to the Philippines. Companies like CISCO, HSBC, T-Mobile and the BT Group are shifting their work to Philippines in order to curtail the adverse impact of high staff turnover in these segments in India.

Additionally, these companies have also identified other reasons for this shift. These include a better synergy between the Filipino workforce and American culture, lack of competition for skilled workforce and higher levels of tax incentives.

The article quotes research firm Everest and the Business Process Association of Philippines (BPAP) to point out that while India's BPO industry is expected to post $5.58 billion of voice-based revenues this year, the Philippines BPO industry could grow to the levels of $5.70 billion in 2010.

It further quotes unnamed experts to state that at the current pace of growth, the Philippines will surpass India's $12.4-billion BPO industry in five years. In the last two years, Philippines' $9.5-billion off-shoring and outsourcing industry grew at a compounded 27.6 percent, while India's BPO industry has showed a CAGR of 11.92 percent in the last two years.

The article said Cisco and BT are outsourcing handling of customer queries and support to cheaper locations, including the Philippines. Cognizant, which had established a call center in Manila last month, was quoted as saying that staff attrition in the Philippines was less than half of what Indian companies faced in recent times.

Another factor that the newspaper claimed was contributing to the shift was the 100 per cent tax exemption for eight years that Philippines provided to IT-BPO companies. Additionally, once the tax holiday was over, tax authorities only charged a 5 percent special tax on gross income while exempting BPO firms from all other taxes.

Already, Indian companies like IBM, Accenture, Aegis and EXL have set up call centers around the country in locations like Cebu City, Davo, Angeles and Metro Manila. The fast paced GDP growth in India and job avenues in sectors like banks, telecom and insurance also contributed to the growth of the voice BPO industry in the Philippines, the article says.

[digitalsuperman]

Also you might want to read this article:

The Great Call Center Debate: India vs. the Philippines

Culturally, India is less westernized than the Philippines. Philippinos speak idiomatic
American English better than Indians, and their accent is more neutral. The Philippines is
an outstanding destination for a wide variety of offshore services. They have gained
great traction especially in voice work.

[peewee_toot]

dili na ni malalis oi...

[elvishtattoo]

cge go! ang ako ug ari na mag tapok ang mga Indians sa Pinas kay ari na mo apply ug call center... LOL!

[yacky2006]

dili na ni malalis oi...

daugon rani sa suholan... basin ang mga PANA grabe mo dive.

[Tirong-say]

Mostly, the people employed now in the BPO business in the Philippines are educated,
I think that's why we have what they call "excellence" in this arena of communication business.

[Raine85]

Health issues are the side effect... hopefully our government can create a bill or law that will protect the agents.. It's really good for the economy and for the Philippines as a whole.