The Call Center Capital of the World: A Look at the Progress of the Call Center Industry in the Philippines

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The Call Center Capital of the World: A Look at the Progress of the Call Center Industry in the Philippines

 

 

The Philippines has been globally recognized as the “Call Center Capital of the World” since 1992, when the first contact center was established in the country. The country has consistently provided high-quality services at cost-effective rates, making it a top outsourcing destination for customer service. According to a 2022 Outsource Accelerator report, the Philippines received the 5th highest number of outsourcing inquiries, receiving 3.81% of total queries in the past year.

One of the main reasons why foreign investors see call center outsourcing in the Philippines as a key destination is because of the country’s massive workforce. In 2019, over 1.3 million Filipinos were employed full-time in BPO companies, and that number was projected to grow by 8% to 10% every year. The Philippines is estimated to hold about 10% to 15% of the worldwide business process outsourcing market. 

By 2028, analysts expect the Philippine business process outsourcing industry to increase its full-time call center employees to 2.3 million, generating 600,000 additional call center jobs and achieving an annual revenue of $32 billion.

The Philippine government has also been supportive of the BPO industry’s growth. Upon seeing its potential as a major contributor to the Philippine economy, the government passed the Special Economic Zone Act in 1995. This regulation led to the creation of the Philippine Economic Zone Authority (PEZA), which offered tax and financial incentives to foreign investors establishing their back-office operations in the country.

To stay competitive, many call centers in the Philippines are now broadening their service offerings to meet the needs of previously underserved industries like healthcare, travel and tourism, e-commerce, automotive and transportation, manufacturing and distribution, and more.

In terms of growth rate, for 2021, contact centers in the Philippines are forecasted to grow by about eight to nine percent in terms of full-time employees (FTEs), compared to about six to seven percent growth globally. In terms of revenue, contact centers in the country are projected to rise by nine percent versus about six percent to seven percent worldwide.

 

The Philippine government has been supportive of the BPO industry’s growth. The government passed the Special Economic Zone Act in 1995, which led to the creation of the Philippine Economic Zone Authority (PEZA). PEZA offers tax and financial incentives to foreign investors establishing their back-office operations in the country.

Moreover, the government has implemented several initiatives to support the call center industry. These include the development of special economic zones, the establishment of training and education programs, and the promotion of the country as a destination for outsourcing.

Moreover, the government has expressed its appreciation to the contact center sector, specifically the Philippines’ Information Technology and Business Process Management (IT-BPM) for helping lead the national recovery amid the ongoing pandemic. The Department of Trade and Industry (DTI) Secretary Ramon Lopez recognized the IT BPM’s strength and resilience throughout the crisis, citing its achievement to maintain the country’s position as the destination of choice and outsourcing capital of the world.

 

Call centers in the Philippines face several challenges. Here are some of the most common ones:

 

Lack of budget: Tight budgets have been a perennial problem for contact centers, thanks to the high costs associated with staffing them. Some call center companies don’t regard contact center efficiency savings as “nice to have.” Instead, they are demanding them as standard.

 

 

IT issues and need for new technology: Call center outsourcing companies in the Philippines are drowned with software, ranging from predictive dialers to CRM databases and workforce management (WFM) tools. The call center challenge is common, and many struggle to keep up. They have difficulty identifying which channels to focus on and which technology is best to implement. And when new technology is installed, it is often not linked to other systems.

 

 

Conflicting business priorities: Senior management’s job is to manage contact center performance for business priorities. But often, these priorities contradict each other. For example, one priority is to increase customer satisfaction, while another is to cut costs.

 

 

Employee attrition: High employee turnover rates can be a significant challenge for call centers in the Philippines. The industry has a reputation for being stressful and demanding, which can lead to burnout and high turnover rates.

 

 

Security concerns: Call centers in the Philippines face security challenges such as data breaches and cyber attacks.

 

 

Infrastructure issues: The country’s infrastructure can be a challenge for call centers in the Philippines. Power outages and poor internet connectivity can disrupt operations and lead to downtime.

 

 

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