The Call Centre Outsourcing Industry in The Philippines

It’s well known (perhaps supported by the movies cliché) that customer service is an increasingly used branch of call centre outsourcing around the world, mostly in Asia. But have you ever wondered why this is so?

In fact, ask yourself, why is it increasingly common for U.S.-based companies to be betting on call centre outsourcing services to Asian BPOs, specifically the Philippines? Why the Philippines?

Well, to provide the clear reasons for this business trend, first you have to understand in depth why the Philippines is one of the ideal (if not the most) places to outsource services such as call centres, customer service, software development, engineering and process assistance involving telecommunications.

The Philippines, leading the call centre outsourcing industry like no one

The astronomical growth of the Asian nation in the call centre outsourcing market, which has led it to be seen by many large companies (such as T-Mobile, Wells Fargo, Amazon, among others) as a paradise for telecoms and opportunities to further boost business, has been occurring since the ’90s.

In 1995, the Philippine Congress passed the Special Economic Zones Act, which establishes the Philippine Economic Zones Authority. This law provided lower area requirements for developments and tax incentives, which consequently attracted foreign investors.

So the 21st century opened the doors for the expansion of a new market in the country, business process outsourcing (BPO).

Since 2000, the Philippines have been incorporating hundreds of thousands, even millions of jobs as foreign companies address customer service, sales tasks and other industry sub-sectors such as administrative offices, hardware and software assistance. 

The cases of multinationals such as Accenture Global Resource Center and American Express, companies that have joined the trend of setting up offices in the Asian country; have served as an example to understand the main purpose: globalization.

This is where the real reasons come up in why U.S. companies are moving their call centre services to the Philippines (which, if that were not enough, surpassed India in this market many years ago, according to IBM’s Global Locations Trend).

Why are U.S. companies outsourcing their contact centre to the Philippines?

In 2014, the Philippines reached an all-time high of employment in the BPO industry (over 930,000), positioning itself as one of the leaders and powers in Asia, as this growth has been supported by the Philippine government, through a BPO Development Plan as one of the highest priority areas.

One of the secrets, which is also presented as a solution for foreign companies that want to reduce the maintenance costs of domestic outsourcing, which involves infrastructure, market competition and the human resource (poor training, high employee turnover rates), is that the Philippines offers programs to foreign investors.

These programs include tax exemptions and simplified import/export procedures, as well as training for BPO applicants, which means assistance in a market that can be a huge expense.

However, although the costs of outsourcing business processes in contact centre paradises such as the Philippines are visibly lower, the main reason it’s a big business decision that, due to globalization, call centres and services are increasingly specialized in the markets they cover.

This means, first and foremost, greater breadth of communication, technological advances and, most importantly, an increase in efficient operations that really help customers with their problems. The Philippines offers personnel training far superior to that of many other territories, which goes beyond the technical knowledge and support to be a call centre operator, it also includes dealing with customers, qualification in the area of sales and advice.

Government support with development programs (increasingly modern and adapted to market needs), staff training, infrastructure and more profitable labour are some of the factors strongly considered by companies in the United States and abroad, which have the purpose of seeking a solution for their needs in telecoms.

The call centre outsourcing services in the Philippines, whether internal or external to the company, have to go hand in hand with economic and profitability aspects while remaining logistically functional.

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