Labor issues in call centers

The IBM Global Locations Trend said in its latest report that the Philippines has already overtaken India as the world’s number 1 country for shared services and business process outsourcing (BPO).

Also, last week, in an interview with Karen Davila on ANC’s Headstart program, the president of the Contact Center Association of the Philippines, Benedict Hernandez, said the Philippines has already overtaken India in terms of the number of call center employees this year.

“When you think of the contact center environment, we have assumed the number 1 position. Last year, we were about 300,000. This year, it’s 350,000 in terms of employed Filipinos working in call centers in the Philippines compared to only 330,000 in India. Right now, the best place to put a call center from a quality position is the Philippines,” he said.

In terms of revenues, Philippine call centers are expected to generate $5.7 billion this year or $200 million higher compared to India’s $5.5 billion. BPO revenues are forecast to hit $9.5 billion. This is still behind India’s $12.4 billion but the Philippines is not only expected to catch up but overtake India in the next five years.

BPO revenues include voice and non-voice services. Call centers that offer voice services provide lower profit margins compared to other BPO offerings. Non-voice BPO offerings, such as financial, medical, editorial and engineering services, contribute higher profit margins. More established BPO players, including those from India, have created a niche supply for these services. But like I said, the Philippines will capture a bigger share of these non-voice services in the near future because we have no shortage of workers who can do higher-end and knowledge-based BPO work.

All these are good news, indeed, but not everything is bright and sunny in this sunshine industry.

There are also human and labor issues in call centers and other BPO companies that demand immediate attention from the government, labor organizations and industry players.

By now, we are all too familiar with the high attrition rate in BPO workplaces.

Young, energetic, enthusiastic people are enticed by the “work for fun” ads in call centers and realize that the work is rather difficult and highly stressful.

The high stress level leads to a number of illnesses and employee burnout, so much so that BPO workplaces have been called “electronic sweatshops” or “the slave galleons of the 21st Century.”

The International Labor Organization book titled “Offshoring and Working Conditions in Remote Work” talks about these issues in-depth. Take the night work shift, for instance.

The Institute for Occupational Health and Safety Development recently criticized the decision of Labor Secretary Rosalinda Baldoz to provide exemptions to the Labor Code ban on women doing night work.
(Article 130 of the Labor Code provides for night work prohibition on women employees, thereby requiring an exemption.)

According to the NGO, recent studies have shown how night work increases the risk of getting breast cancer for women shift workers, noting that cancer caused by shift work is not a compensable disease in this country.

This is quite a dilemma for the Labor department because one, the BPO is perhaps the biggest employment generator in the country; two, most of its workers are women (almost 60 percent); and three, night work is common among BPO workers, especially call centers, as they serve customers mostly in the United States in real time.

So what is the Labor department to do?

The ILO book also says night work is associated with occupational and safety and health issues such as sleep problems and fatigue. Nearly half of BPO employees surveyed in the book reported suffering from sleeping problems or insomnia.

There are other causes of stress according to the book. Specifically, these were the stress-inducing factors cited by the employees surveyed: harassment from irate clients (45.6 percent); excessive and tedious workload (41 percent); performance demands (37.4 percent); monotony (33.7 percent); regular night shift work (33.4 percent).

This is why some companies have a staff turnover rate of as much as 100 percent annually, the ILO says.

Indeed, as the authors of the ILO book noted, a good business model cannot be deemed good if it has such a high attrition rate.

They urge the BPO industry to redesign work processes, especially in call centers, to allow workers to have more autonomy and make use of their qualifications.

As with any industry, people are the backbone of BPOs, so you have to take care of your people. If you have a high incidence of illness, absenteeism and resignations, that can’t be good for business.

I’m sure looking at the long term, industry players would want to reduce the high stress levels, so they could reduce the high attrition rate and can have more workers for their labor pool, not to mention to keep costs down. It costs less to keep workers happy and costs more to hire and train new workers for the same jobs.

Of course, there is job dissatisfaction everywhere. In a perfect world, workers would love their jobs, work hard for their employers, get paid well, and stay in their companies forever.

We are not asking the BPO industry for something unattainable, but industry leaders should indeed change some of their practices if they want more young Filipinos to make a career out of their BPO jobs instead of looking at it as something to do for a few months. –ERNESTO F. HERRERA, Manila Times

ernestboyherrera@yahoo.com