Recession drives BPOs to efficiency

Call centers scrutinize pay structure

MANILA, Philippines — The global economic downturn is forcing Philippine-based contact centers to operate more efficiently and keep their costs down, as high operating expenses may make them uncompetitive.

Contact Center Association of the Philippines president Benedict Hernandez said the crisis had prompted the industry to look more closely at wage increases and the negative impact this could have on the industry vis-à-vis competitors such as India.

“The crisis has forced us to challenge wage inflation. According to a study by Watson Wyatt, wages in the industry have increased by 10 percent in 2008. By March 2009, however, the industry has changed its perspective,” he said in a briefing.

He explained that combating wage inflation did not mean implementing pay cuts. This just meant tempering annual salary increases, to enable the country to remain competitive in the global marketplace.

“We now have a greater responsibility to temper costs. That should be an ongoing thing, and not just because of the crisis. You need that for country competitiveness. We don’t want to price ourselves out of the market,” he said.

Right now, he said BPO industry employees were some of the highest paid in the country, with most entry-level personnel enjoying wages and benefits that were well beyond the minimum required by law.

If the industry were to sustain its growth for the long term, he said tempering costs should be a critical component of all BPO firms’ strategies.

“The industry has to have a responsible, sustainable growth strategy,” he said.

Instead of implementing average wage increases of around 10 percent a year, he said BPO firms should look at giving out performance-based incentives instead.

The advanced announcement of holidays, which was what the government did this year, would also enable companies to better manage their labor costs, he related.

“In making our business plans, we have to consider all the extra holidays that the government will declare because these affect our labor expenses. This is why an advanced declaration of holidays is good for us,” he said.

Apart from keeping wages from spiraling out of control, he said CCAP as a group had also formed a “procurement council” that would help the organization’s member-companies source lower priced equipment by way of volume orders.

According to CCAP, “the procurement council is mandated to build professional partnerships with accredited vendors and service providers to maximize optimum advantage in a competitive market.”

Hernandez cited headsets as an example of purchases that CCAP members could pool to take advantage of volume discounts.

CCAP currently has 56 member-companies, including some of the biggest in the industry such as TeleTech, eTelecare Global Solutions, Sykes Asia, Accenture and Convergys. –Abigail L. Ho, Philippine Daily Inquirer