Contact Centers in the Philippines and their Key Competitive Advantages

The contact center industry in the Philippines was virtually non-existent three decades ago. At the time, India was the largest provider of offshore call center support and there was little evidence to suggest that that was about to change, only it was. Today, voice-related call center services are being offshored not to India but rather to the Philippines. This blooming industry is now worth 8% of the country’s GDP with annual revenues of $28bn. What led to the emergence of more than 800 contact centers might remain a mystery to some, but for those in the industry, the competitive advantages of using call centers in the Philippines are clear.

Why choose the Philippines over India?

The Philippines is currently the largest and leading offshore outsourcing destination for call centers. A key reason for this relates to how US-based companies have switched to using call centers in the country.

1. Political and Cultural ties

Many believe the reason for this to be the strong political ties binding the US and the Philippines as the latter was a US protectorate for more than five decades. While India’s ties are closer to the UK as they were a part of the British Empire. The results of this history are clear. While British English gained prominence in India, it was American English that was spoken by most Filipinos. As the US is responsible for 60-70% of all offshore call center-related business it seems normal that they chose the call center industry in the Philippines, as it would be politically, culturally, and linguistically closer to them.

• Large Talent Pool

The linguistic affinity of Filipinos brought other competitive advantages that were detrimental in growing the call center industry in the Philippines to employ over 1 million people. As many people in the Philippines grow up speaking a fairly neutral or American-based version of English, many can offer their linguistic skills for higher customer support. The lack of a discernable accent has also allowed agents to be more widely understood over the phone. This is something US companies were directly seeking, as outsourcing is meant to lower costs while retaining high quality.

Apart from that, the large pool of qualified candidates meant that scaling up the call center industry in the Philippines was easy and quick. There was no need for special linguistic training for agents. Instead, people could easily be hired and take on the necessary roles. As more and more US-based companies became interested in offshore call center outsourcing and sought to bring their business to the Philippines, more people could easily be found and hired. As these jobs are also considered quite lucrative in the Philippines it is also likely that many people will look to apply to these programs and jobs when positions open up.

• Lower Turnover Rates

When it comes to outsourcing there is one very clear reason for it. The call center industry in the Philippines is built to be efficient and cost-effective. Even though agents in the Philippines are usually paid good wages, those wages pale in comparison to the wages required within the US. As such, the turnover rate is lower per agent, and thus, companies using vendors in the Philippines could save up to 50% while still offering high-level support to their clients.

• World-class Infrastructure

One of the final reasons that people have focused on using the call center industry in the Philippines relates to AAA-grade real estate and facilities available in the country. What’s more, as most of the business is US-based and the Philippines has been close to the US for decades, business processes and operations are patterned to emulate the ones in the US. This means that the call center industry in the Philippines will resemble a US call center in everything from equipment, to the level of expertise, to efficiency and processes.

Conclusion:

There is no question that the development of the contact center industry in the Philippines over the past few decades was heavily influenced by the close ties between the Philippines and the US. These ties had created the perfect setting in which a large number of the population had learned how to speak English to a high level, which the industry to have a large number of candidates to choose from. The world-class infrastructure and the US-based business models were also detrimental to the development of the industry. Finally, the low operation costs and the low cost of outsourcing to these businesses meant that US companies making the move could save a lot of money for the same quality of service, thus, making the switch that much easier.