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Philippines plans to tap Japanese outsourcing market ...

July 22, 2009

After the US, Japan maybe the biggest IT outsourcing market for the Philippines. And so many Japanese are here, especially in Manila, it makes sense to serve the Japanese with outsourcing. Much of the work does not even require the Filipino employees to speak Japanese, data entry, scanning and others. But if the country's IT outsourcing capabilities are not properly ...

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You can get a job overseas by computer(by Don A. Herrington )

Call Centers: Boon or Bane for New Graduates?

With the country high unemployment rate, new graduates and other new entrants to the labor force are grateful for the presence of call centers which take in thousands of them every week, regardless of the course taken. Concerned voices however raise the issue of government molding the education system to churn out graduates suited to the needs of the call center industry. By:AVA DANLOG Bulatlat

Under the subject Advanced Communication for International Business or Comm 400 in the University of the East in Manila, students are taught marketing, finance and public speaking. Topics such as English proficiency and American geography are tackled.

Call center representatives

Lara (not her real name), a graduating engineering student, is taking such a subject. Although completely unrelated to her course, she took up the communications course as an elective to equip her with the skills needed for employment after graduation.

Ironically, Lara knows she would most likely end up not practicing her chosen profession. She plans to apply as a call center agent in Makati right after graduation. Doubting she will even pass the licensure exams, she knows it would be difficult for her to compete for the few decent job openings available to inexperienced engineering graduates like her. In addition, she "more than happy with the comparatively high basic salary offered in the call center industry.

"Mecca" for new graduates

Alarmingly, more and more graduating students are looking at call centers as an option for employment. Regardless of degree taken, thousands of fresh and old graduates are hired by the call center industry every week.

A call center is a communications-based company which serves as a support system for larger companies in first world countries like the United States. Call or contact centers handle customer complaints and inquiries and provide technical support for a wide array of products and services like electronics, e-mail management, mortgage, insurance, advertising, telecommunications and even volunteer and charity work.

Basically, the work is to receive from and make calls to foreign countries. There are two categories of call centers: inbound and outbound calls. And there are three types of accounts: telemarketing, customer service and technical support. Telemarketing belongs to the inbound category. However, customer service centers also engage in up selling, which means offering or selling services.

Debts and the need to lower cost structures caused by a troubled stock market, unstable economic conditions and declining expenditure on Information and Communications Technology (ICT) have made off shoring appealing to U.S. companies. ICT advances have enabled multinational and transnational corporations to decentralize certain operational areas like the handling of inbound and outbound calls.

Years ago, the Philippines was unknown in the provision of e-services in the world. However, the improving technology and the deregulation of the telecommunications industry in the country during the mid-1990s paved the way for the launching of the call center industry. The Department of Trade and Industry lists at least 37 call center companies in the country and the number is growing. Major players include Converges, People Support and Aftercare.

The Filipinos' Edge

Since the industry mainly caters to markets from the United States, United Kingdom and Australia, call center agents are obliged to acquire the foreign accent and study the geography and cultural mores of these foreign countries and work on a graveyard shift. Being the third largest English speaking country in the world and with a high literacy rate, the Philippines is considered as one of the most competitive call center destinations in the world.

Other factors that make the country attractive to foreign companies are the cheap class A office spaces, better power and telecommunications infrastructure, good quality but cheap labor force and the support the government is all too willing to extend to these foreign investors.

Graduates and even undergraduates who pass the preliminary exams undergo a six-day English skills training and product training for three weeks. After which the agent trainee will be placed on the floor to attend to mock calls for assessment. Agents are supposed to be able to type at least 25 words per minute.

The basic pay for call center agents ranges from P11,000 (US$200.98 at US$1=PhP54.73) to P13,000 a month. In ICT Philippines, a call center that operates in the Philippines, agents enjoy a monthly P2,500 food and transportation allowance and a performance appraisal bonus amounting to P4,000. Often, they are also offered spiffs like appliances, cellular phone loads and gift checks to boost the sales per hour capacity of the employees. For example, whoever first gets five sales per hour for the night wins a prize. And an agent who hits the target quota sales gets an additional P11,500 commission plus a 30-50 percent night differential. All in all, a well-performing agent gets a gross monthly income of more than P31,000. This, as opposed to the P8,000 entry level salary generally offered in other sectors.

Yet, these are not all. Call center agents receive benefits like SSS, health insurance, Pag-ibig and salary loans. It is not a dead-end job either. Agents get the chance to climb the corporate ladder in just a matter of three months. Some call centers offer perks like free shuttle rides, free meals and coffee and sleeping rooms and even karaoke rooms.

Most people find the job easy. According to Wing, a Philosophy graduate and who has been working for a call center selling mortgage services in Ortega's for 14 months now, I find the job easy. When I go home, I go home. I don't have any paperwork. When I'm in the office, I work my brains out because I'm already a team leader. But when I get home, I'm home. I don't have anything else to do.

"Sunshine Industry"

The call center industry is tagged as the "sunshine industry" by the government because of its massive expansion, thus generating thousands of employment. It is the fastest growing sector within the IT software and services industry. It is not only sprouting in Metro Manila, but in other metropolitan areas as well like Cebu, Bangui, Davao and Pampanga. With an unemployment rate at 13 percent, the highest in Southeast Asia, the call center industry is perceived as a rare bright spot in the country sailing economy.

Thus, the Arroyo government is putting high hopes in the ICT-enabled services sector for the development of the economy. To realize its goal of placing the Philippines in the call center map of the world, the government has designated more than 96 special economic zones that offer tax breaks and other incentives to foreign investors and is improving the telecommunications and other basic infrastructure.

The available skilled labor force however could not catch up with the demand of the industry. Out of the 380,000 graduates produced annually, a mere five percent qualifies as call center agents. In fact, only three to five percent of applicants are taken in by the call center industry.

What is very alarming is the government mainstreaming the education system to churn out graduates that would fit the qualifications needed by the industry. In this regard, the Technical Education and Skills Authority (TESDA) of the Department of Labor and Employment has released a scholarship fund for would-be contact center professionals. Malacanang mandated English as the primary medium of instruction in both primary and secondary levels, aside from placing more emphasis on Math and Science as preventive measures. On the tertiary level, a number of schools all over the country, like UE in Recto, are now offering the subject Advanced Communication for International Business.

As remedial measures, formal training and certification programs for call centers have already started in training centers like AHEAD Learning Systems and the Avaya Customer Contact Training Center (ACCTC) located at the Mapua Institute of Technology. Call centers like People Support (Phils) Inc. has already started conducting special classes in the University of San Jose-Recoletos (USJ-R) on basic contact center education for graduating students.

University of the Philippines student leader Atom Araullo, himself a graduating student, says that this move on the part of the government is reflective of the dominance of other countries in the economic affairs of the country. This tendency is nothing new since based from history, the government has been mainstreaming the education system of the country based on the demands of the global market for semi-skilled workers.

Not so Bright after All

After a deeper analysis, the exponential growth of the call center does not paint a very bright picture after all. Although the quality of the Filipino labor force lures in investors, the undoubtedly more decisive factor would be the cheaper labor cost. While the salary rate is comparatively higher from the minimum wage popularly offered nowadays, the practice of developed countries to exploit the cheap labor pool of underdeveloped countries would eventually lead to lower wages, especially so since 60 percent of the operational cost of a contact center in the country goes to labor, according to the Department of Trade and Industry (DTI).

Research also shows concerns on the health costs for those working the graveyard shifts. According to Rebecca Stoll, an analyst for US research group Gartner, after touring call centers in the country, as you can just work at night so long before you burn out. This suggests that prolonged call center employment may pose several health risks for the agents.

Most workers are denied to right to unionize. There is lack of job security and the labor force is not trained for skills that would benefit the country. At the other end of the line, agents are often subjected to racial discrimination, harassment and verbal abuse, and yet obliged to remain unruffled and calm. Weng adds, 'Stressful, especially during the early part. But then I have to learn to detach myself. I sometimes feel like a robot, I'm not learning anything.

Bubble Industry

Analysts predict that aside from facing stiff competition from other countries, the market would soon be saturated and the industry will burst. This is the reason why mainstreaming the education system just to cater to the demands of the call center industry would be a big blow to the economy.

According to Melvir Buela, an undergraduate engineering student from UP Diliman, the education system should be attuned to what the country really needs. He added that for undergraduates looking for jobs to save money for the rising tuition rates, call centers are the best option since the shift and the high pay are beneficial. However, he does not approve of the brain drain to the semi-skilled call centers.

Araullo says that graduates flocking to call centers imply that many are finding it harder and harder to find decent jobs. So instead of putting all the resources into sustaining the growth of call centers in the country, the government should instead exhaust all means in localizing industries in order to generate sustainable employment for the 31 million unemployed Filipinos.

Araullo adds that students should always view call centers as an option until basic reforms are put into place. "Students should not be ashamed. It's a decent job. But then they have to think, be curious and be open to the potential that they themselves would be the key to in initiating positive changes in the future." Bulatlat

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