Philippines leading a call-center revolution
Published 4:00 am Saturday, November 26, 2011
- Aegis PeopleSupport workers sit at their workstations inside the company's offices in Makati City, near Manila, Philippines on Nov. 11. Many companies have moved their customer service lines to Manila to take advantage of workers who speak American English and are familiar with American culture.
MANILA, Philippines —
Americans calling the customer service lines of their airlines, phone companies and banks are now more likely to speak to agents named Mark in Manila than people named Bharat in Bangalore.
Over the past several years, a quiet revolution has been reshaping the call center business: the rise of the Philippines, a former U.S. colony that has a large population of young people who speak lightly accented English and, unlike many Indians, are steeped in U.S. culture.
More Filipinos — about 400,000 — than Indians now spend their nights talking to mostly U.S. consumers, according to industry officials, as companies like AT&T, JPMorgan Chase and Expedia have hired call centers here, or even built their own. The jobs have come from the U.S., Europe and, to some extent, India as outsourcers followed their clients to the Philippines.
India, where offshore call centers first took off in a big way, fields as many as 350,000 call center agents, according to some industry estimates. The Philippines, which has a population one-tenth as big as India’s, overtook India this year, according to Jojo Uligan, executive director of the Contact Center Association of the Philippines.
The growing preference for the Philippines reflects in part the maturation of the outsourcing business and in part a preference for U.S. English.
In the early days, the industry focused simply on finding and setting up shop in countries with large English-speaking populations and low labor costs, which mostly led them to India. But executives say they are now increasingly identifying places best suited for specific tasks. India remains the biggest destination by far for software outsourcing, for instance.
Executives say the growth was not motivated by wage considerations. Filipino call center agents typically earn more than their Indian counterparts ($300 a month, rather than $250, at the entry level), but executives say they are worth the extra cost because U.S. customers find them easier to understand than they do Indian agents, who speak British-style English and use unfamiliar idioms.
Indians, for example, might say, “I will revert on the same,” rather than, “I will follow up on that.”
It helps that Filipinos learn U.S. English in the first grade, eat hamburgers, follow the NBA and watch the TV show “Friends” long before they enter a call center. In India, by contrast, public schools introduce British English in the third grade, only the urban elite eat U.S. fast food, cricket is the national pastime and “Friends” is a teaching aid for Indian call center trainers. English is an official language in both countries.
Analysts said call centers in the Philippines appear to have helped U.S. businesses respond to complaints from consumers who say they cannot understand Indian agents. But it is unlikely to satisfy critics who say outsourcing is sending too many jobs abroad as millions of Americans struggle to find work.
Earlier this year, for instance, US Airways stopped outsourcing customer service to Manila and hired 400 agents in Arizona, California and North Carolina as part of an agreement with a union, the Communications Workers of America. Some U.S. companies like Delta Airlines have said they moved call centers back to the U.S. to appease angry customers who wanted better English. Entry-level U.S. call center agents earn about $20,000 a year, about five times as much as similar agents in the Philippines and six times as much as Indian agents.
Nevertheless, the financial benefits of outsourcing remain strong enough that the call center business is growing at 25 to 30 percent a year here in the Philippines, compared to 10 to 15 percent in India, according to Salil Dani, research director at the Everest Group, a firm that tracks the market.
In addition to language skills, the Philippines has better utility infrastructure than India — there are few blackouts, so companies spend little on generators and diesel fuel. Also, cities here are relatively safer and have better public transportation, so employers do not have to bus their employees to and from the office as they do in India.