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Philippines Emerging as Top Choice for Outsourcing

Posted April 08, 2008

MANILA, Philippines -- The Philippines is giving India a run for its money in the booming call center industry, according to the latest Asian Contact Center Benchmarking Report.

Callcenters.net president Catriona Wallace said in a news briefing Friday that call center seats in the Philippines would increase 23.4 percent this year from the present 129,000, which would make the Philippine industry the fastest-growing in countries covered by the report.

India's 500,000-strong contact center sector grows at an average of 10 percent a year, Malaysia's 33,000 by 17 percent, Thailand's 28,000 by 15 percent, and Singapore's 20,500 by eight percent, Wallace said.

"We noted that there is a shift to the Philippines from India as the top-of-mind choice for outsourced services, especially in customer-related work," she said.

Sponsored by United Kingdom-based Autonomy etalk and Alcaltel-Lucent unit Genesys Telecommunications Laboratories, the study by callcenters.net covered 539 executives representing some 2,500 contact centers in Singapore, China, India, Malaysia, Thailand and the Philippines.

It said Philippine call centers were the biggest in average number of seats, with 676 as compared with India's 522.

The Philippine average is expected to increase to 804 this year and 975 in 2009, Wallace said.

"A downside to this is that contact centers with more than 100 seats are bound to have relatively pronounced human resource problems," she said. "The Philippine industry must continue to address these challenges, including attrition."

The report showed that on the company level, an average of 15 percent of full-time agents left their jobs last year. If the actual number of full-time agents were reckoned with the total number of employees in the industry, the attrition rate was 26 percent.

Comparative figures on part-time call center agents were 12 percent and 37 percent, respectively.

"Reasons given include the lack of a career path of plan in the organization that they left," Wallace said. "They also cited they were not being paid much for the skills they had, or there was no interesting work being done or a flexible working condition."

The study showed that the Philippines improved in average tenure of employees who left contact centers, from 18 months in the previous survey to 22 months last year.

Contact center executives said the two most effective strategies they used to keep employees were financial incentives—higher pay, more bonuses—and their award and recognition programs.

Among Philippine respondents, 56 percent said they used financial incentives, 34 percent said they paid above-market rates, and 37 percent said they gave out awards.

While the industry is concerned about continued availability of a talented pool of labor, individual companies are also having problems keeping the few skilled workers they have signed up, Wallace said.

Source: INQUIRER.net, March 8, 2008
By Ronnel Domingo

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