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Call center industry eyes 30% growth, 50,000 more jobs

[ Manila Bulletin Online ] July 24, 2008

Confident of hitting $ 4.35 billion revenues this year to sustain a 30 percent annual growth and accounting for two-thirds of the total projected 2008 business process outsourcing (BPO) revenues of $ 6.7 billion, the call center industry is focusing on improving efficiencies, ridding of unscrupulous brokers and imposing sanctions against poaching.

Benedict Hernandez, director of the Contact Center Association of the Philippines (CCAP), told a press conference at the CCAP Annual Call Center Conference and Expo that the growth would translate to 50,000 additional net job creation this year and bringing the industry’s total jobs to 230,000 as of end this year from 176,000 last year.

"This is quite high considering that we have already have a bigger base," Hernandez said.

But the non-voice sector is expected to be growing at higher rate than the non-voice as other contact centers have moved on to higher and more complex services like software development, finance and accounting, legal and human resources management among others.

Hernandez, however, said the association has been wary of brokers who are victimizing small call center operators as they plan to put up an accreditation procedure and blacklisting those with bad records.

"Actually it is a risk issue and largely dependent on the company taking risks," he said.

On agents leaving their companies without prior proper dismissal from previous companies, Hernandez said the HR Council of the industry has come up with a written agreement on what is acceptable and non-acceptable practice.

But there is no move really to blacklist agents who are hopping form one company to the other.

"If an agent is not happy with us then why force him to stay," he said.

Hernandez said that e-Telecare, a publicly-listed call center firm, even opposed to a proposal for a non-compete clause, which would ban an agent from working in another company for a certain period of time after resigning from another call center firm.

But the industry said the attrition rate has somehow improved to 22 months from 18 months as companies continue to make collective efforts to make their workers’ stay longer by making them happy and content with their jobs.

In fact, companies are providing agents a place to take rest in between shifts, game rooms, cafeteria to meet and hangout with friends.

An inhouse clinic and pharmacies are also provided.

"We’re enjoying a better attrition rate than other countries," Hernandez said.

The industry has also implemented measures to cushion the impact of the weak U.S. economy, the country’s biggest outsourcing destination.

As far as the foreign exchange is concerned, industry players said there had been some pressure on margins, but companies have resorted to hedging by entering into forward contracts.

The recent appreciation of the US dollar to the P44-P45 range has somehow eased any adverse impact to the industry.

If anything, the economic slowdown and price pressures should lead companies to improve operational efficiencies and cost structures.

Call centers have also diversified their sources of revenues by getting new clients from Canada, UK and Australia, which currencies have remained strong vis-a-vis the US currency.

Companies have also improved their productivity and gave training more focus.

The U.S. recession may have some impact in the immediate term on their businesses but is likely to be beneficial in the longer run as US industries need to reduce costs may likely lead to more outsourced work to countries like the Philippines.

On the issue of labor cost, John Langford, executive vice-president of the ICT Group, said the wage rates in the country is not something that would discourage investors from coming in.

"Labor cost do impact but the Philippines is sustainable," Langford said.

Maulik Parekh, general manager of TeleTech, said the issue of labor is a matter of supply and demand and with 400,000 graduates annually their industry has enough supply of manpower that they can tap.

Dan Reyes of Sitel said the industry has been paying more its workers than other sectors not just in terms of basic pay but add-ons like transportation allowance, health insurance, commission, among others.

"The basic rate is not what the agents go for because the commissions and incentives could bring a first time level agent to P30,000 salary a month and could further go if he performs better," an industry player added.(BCM)

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