Outsourcing - the new global market trend
by Jopy San Juan, posted July 30, 2008
by Jopy San Juan, posted July 30, 2008
As 21st century communication based industries like Business Process Outsourcing (BPO) booming left and right and eventually posing huge potential for workforce in some parts of the world, BPO could also be the perfect lifesaver for Filipino unemployed young and old alike. BPO started to hug the limelight as it paved the way for the mushrooming of contact centers and service oriented outsourcing especially in countries with less expensive labor costs like the Philippines.
These BPO like call centers, human resources, accounting, and payroll outsourcing serve as the middle party between the contracting party which is the service provider, and the third party or the costumers. Usually, BPO is implemented as a cost-saving measure for a task that a company requires but does not depend upon to maintain its position in the marketplace. BPO will perform some specific services for the contracting company without the traditional employer-employee relationships because the set-up of the two parties is more of a business partner.
In 2003, the Asian Call Center Review reported that the Philippines topped the Asian region offshore call center industry that year, logging behind India at number two spot. Last year, it was estimated that 200,000 people are working in 120 BPO (mostly contact centers) in the Philippines and expected to bring in revenues of US$ 3.8 Billion for the year, contributing 12 per cent in to the country’s Gross National Product.
The Philippines already captured the 20 per cent of the total world call centers in 2004 and is optimistic that by 2008, the country will already dominate 50 per cent of the English-Speaking market. Some industry insiders forecast that more than one million Filipino would be employed in the Call Center industry by 2010 making US$ 12 Billion in revenues.
Philippine’s Share
The Philippines is considered as location of choice mainly because of its less expensive labor cost, English language proficiency and high Information and Communication Technology skills. As a major player in BPO market world over, Philippines ranked in the top 10 world-wide primary BPO destination according to one study. By 2010, it is expected that US$ 12.1 Billion would be earned by the Philippine government as revenue from business process outsourcing industry and US$ 5.29 Billion of which will be from call centers. According to the Business Process Association of the Philippines (BPAP), the industry has the potential to employ up to one million workers by the end of 2010. As of May 2007, there are about 237,175 BPO industry employees nationwide and 160,000 were call center agents. A vacuum of more than 700,000 employees or about 300 per cent of current BPO workers are needed if the projection of BPAP will happen. It might even double the total number of call center agents nationwide three years from now.
According to BPAP executive director Mitch Locsin in an interview with Sunday Inquirer Magazine (July 15, 2007), he believes that the entire country should support the growth of the industry given the multitude of benefits it brings to the country, top of which is the foreign direct investments that come in whenever companies set up contact centers locally. He added that foreign investments translate directly into higher employment.
The Country’s BPO Workforce
New BPO job opportunities might delight millions of Filipinos and other Asian fresh college grads and underemployed in the orient, but on the western part of the world like the United States, telemarketing industry suffered from the reverse effect that incur losses in their BPO workforce. CBS News Website posted that Technology Marketing Corp., a Norwalk, Connecticut-based company specializes in call centers and telemarketing reported that the United States has lost 250,000 call center jobs to India, and the Philippines since 2001.
Furthermore, Forrester Research estimated last 2006 that 3.3 million service industry job like in call centers and US$ 1.36 Billion in wages, will move to countries like India, Russia, China, and the Philippines. Dave Crawford, Ambergris' vice president for information technology said “I have never seen the explosiveness or dynamic growth in an industry such as the Philippine call center business, and we are just getting started."
The Philippine BPO workforce has some advantages: a cultural affinity with the US, as its former colonial master, and its cheap labor and telecommunications structure. Another advantage that put Filipinos ahead over other Asian competitors is that Filipinos speak Americanized English as their second language while other countries like India may speak the ‘Queen’s English’.
Although BPO in the Philippines became the latest trend in the services sector in the 21st century, many Filipinos are still hesitant to try outsourcing-based jobs like in call centers. According to Antonio Boot, a former FM Disc Jockey and Language Specialist in a call center in Bacolod, many newly grads think that strenuous night shifts and good command of English language are among the leading factors that hinders the potential applicants. Also, most of these newly graduates think that call center jobs require long hours of work beyond ordinary office hours. Others felt that call centers are only for fluent English speakers since the job exposes the agent to English speaking clients overseas.
Call Center Experience
According to Wikipedia.org, an online free access/edit encyclopedia, BPO is often divided into two categories: the Back office outsourcing, which includes internal office function such as billing and purchases; and front office outsourcing, which include costumer-related services such as marketing or technical support. It is also called offshore outsourcing if the BPO contracted operates its office/s outside the contracting company’s own country. If on the neighboring country, it’s oftentimes called nearshore outsourcing, and onshore outsourcing for BPO operating within the country of the contracting company.
In the Philippines, the most common Business Process Outsourcing is the call center. It employs several thousands of young Filipinos and dramatically dragging the unemployment scale down by several points. As an offshore dominated call center industry, many agents founnd it very challenging especially in a work place conditioned and patterned from the US setting. From office equipment and furniture, work place ambiance and amenities, office management styles, and over-all environment, one could barely see anything of Filipino in the work place, except the faces of most of the workers. Darlene Pastor, a nursing graduate of USLS-Bacolod and former call center agent said that among the challenges a call center agent often experience is the mastery of Americanized English and all its grammatical features. The environment according to Pastor is manageable since most of the people around you in the contact center are Filipinos.
Mr. Boot on the other hand recalled that in call center, strict observation on time-in and attendance is very important. As former Call Center Language Specialist, he mentioned that most of his tasks involve monitoring the agents’ handling of calls and the effectiveness in pitching the services of their client which is the service provider. Although not all agents would survive the rigid probationary period, the quality of the agent’s performance is one key factor that would merit his regular and more stable work status. In effect, command of English Language comes secondary in staying long in contact center jobs.
Pastor shared that she developed more her personality because of strict training in one of the call centers here in Bacolod. Her experiences in the call center helped improved her self-confidence a notch higher that she said she is now ready to take new job that would even requires her to be exposed in various crowd.
As BPO industry keeps on growing in our country, this opens new opportunities for Filipinos to gain better position in the world economy and to improve as potential world-class workforce. The new challenge now is not only to become one of the world’s well-loved, admired, and most sought after worker in any given field, but as well as to become globally competitive and ready, to serve the communication and information needs of the peoples and nations of the world.
