Philippines seen to stay No. 1 in call-center industry

Manila (Philippine Daily Inquirer/ANN) – The Philippines is expected to hold on to its position as the world’s top call center destination as more companies from markets like the United States look to subcontract more of their requirements to help cut costs.

Nasdaq-listed InContact Inc. said the Philippines workforce’s good English communication skills, coupled with the population’s strong cultural affinity to the US, gave the country an edge that would be hard to replicate anywhere else in the world.

“Labor rates may be cheaper in countries like China and Viet Nam, but their skills are also less,” InContact vice president for sales and global alliances Frank Maylett said in a recent interview.

The Philippines earlier this month was cited as the call center capital of the world, overtaking India as the number one player in the global business outsourcing market, based on industry and government data.

The local business process outsourcing (BPO) sector is expected to end the year with $9 billion in revenue. By 2015, industry revenue is expected to hit $25 billion, or about 10 percent of the global $250-billion pie.

“The Philippines has a good base of quality labor and I don’t think it will be unseated as the world leader for call centers in the next five years,” he said.

He said most call centers in the Philippines today were serving clients mainly in the US. Other growth markets that can be explored include the United Kingdom and Australia.

But Maylett warned that high attrition rates, due mainly to poaching of employees by call center companies, might lead to artificial rise in salaries, which might make the Philippines less competitive.

He said the high demand for employees had caused salaries to rise as they were paid higher as they hopped from one company to another. He said this highlighted the need for the country’s education system to continue producing a steady supply of college graduates who were proficient in English to support the booming BPO sector.

Utah-based InContact provides Internet-hosted software for BPO companies, particularly, call centers. Its main sales office in the Asia Pacific region is located in Manila.

InContact also has clients in countries like China, Vietnam, South Korea, Japan and Thailand, where the BPO sector is also growing.

By hosting software applications via the Internet under its software-as-a-service business model, InContact allows its clients to cut costs by reducing their need to invest in programs that need to be replaced every few years.

The Philippine BPO sector employs about 600,000 workers, with about half of these workers are in call centers. By 2015, industry estimates show the sector’s workforce growing to 1.3 million people.