Slower growth seen for call centers in 2011

MANILA, Philippines – Call centers will post growth again in 2011 albeit at a pace slower than the surge seen this year, an industry group said Friday.

Industry sales and the workforce will grow by 15-20% next year due to the continued recovery of the global economy as well as increased domestic demand versus the 23% expected expansion seen in 2010, the Contact Center Association of the Philippines (CCAP) told reporters in a briefing.

“Mind you, that growth is on a much bigger base now,” CCAP Director Rainerio M. Borja said, recalling earlier released projections that the industry will end 2010 with $6.15 billion in revenues and 350,000 workers.

The 2011 forecast means the industry could rake in as much as $7.38 billion next year and add 70,000 employees.

Growth will be driven by continued recovery of the global economy and increased willingness of firms abroad to outsource operations, CCAP President Benedict C. Hernandez said.

“Growth is coming back on track abroad. If clients grow, our markets grow,” Mr. Hernandez said.

“Companies are also more open now to outsource,” he added.

“And we’re seeing growth in both [domestic and foreign demand],” Mr. Borja said.

Economies of scale has allowed call centers to offer their services to local clients at more affordable rates, he explained.

This tack allows call centers to utilize seats that would have otherwise been empty in the daytime, he said.

Continued industry growth is expected even as the strengthening peso could make dollar transactions more expensive, the officials said.

“There are ways anyway to mitigate foreign exchange risks,” Mr. Borja said, citing contracts dealt in pesos and arrangements with banks to guarantee certain exchange levels for a period.

Despite the peso’s appreciation, hiked service fees charged by contact centers have not been common, Mr. Borja said.

“But a stable exchange rate is of course better for us,” Mr. Hernandez said.

Government would also do well to keep policies on work holidays and tax incentives consistent for predictabilitity as well as invest in education to ensure the industry is served by an able workforce, Mr. Hernandez added. –Jessica Anne D. Hermosa, BusinessWorld