Archive for May, 2009

Is the global economic crisis affecting the offshore call center industry?

Monday, May 4th, 2009

There are a lot of opinions on whether the current financial crisis is going to hurt the Philippine call center and BPO industries or whether it could actually help.  In a recent outing hosted by Globe telecom, the host of the event talked about how great the crisis is going to be for the call center Philippines business because now many US companies are going to be looking for ways to save money so they will be more likely to outsource.


I have heard this “global crisis equals more call center work for Philippine outsourcing” argument many times and I wonder if it is really true.  Aren’t US companies and all businesses, for that matter, always looking for ways to save money.  I do, however, see  some logic to this argument because when times get tough, businesses are more likely to look for ways to save money that they may have overlooked when business was going great and outsourcing to the Philippines can prove beneficial to the bottom line.  But is the global recession the kind of catalyst that will make a company outsource to the Philippines and is the increase in outsourcing enough to make up for the lost revenues from other call center business that will be lost.


For example, lets say you own an airline and you use inbound call centers to process you reservations and ticket sales.  You may employ a vast number of call center agents when business is good but what happens in times like now.  People are flying less so there are fewer reservations and call volume is way down.  You probably aren’t going to need so many reservation agents  so you force the Philippine call center to reduce staff and employ fewer agents for your inbound calls.  Jobs are lost and business is not so good for that call center you were using.


This also works when thinking about a customer service campaign.  You partner with  a Philippine call center to answer customer service questions about the scooter your company is selling but now you are selling 40% fewer scooters.  Shouldn’t you expect to get 40% fewer inbound calls and therefore need fewer agents.


I spoke with  a human resources specialist to get his take on how the crisis is affecting hiring.  “On one hand, you have some call centers that have gotten really slow here in the Philippines.  But on the other hand you have a lot of small call centers that are growing fast.”  He added that some contact centers have had to drastically reduce staff because their clients in the US have been slow in paying.  But in general he feels that the slowdown is evident in Cebu City where he does recruiting.  “It has made it easier for us to find talented call center agents with lots of experience.”

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