Ahead of the 2005 deal, Telus briefly considered India as a potential destination for its first call centres outside of Canada. It quickly zeroed in on the Philippines, however, which presented much better prospects, according to Telus International president Jeffery Puritt.
India “was already a heated market and we would be a slow arrival there,” Mr. Puritt says. “We weren’t convinced the longer-term financial opportunity was really going to be in our best interest. The Philippines was just then coming into its own.”
Seven years on, Telus International is now grappling with both its own success in the Philippines and the soaring growth of the local industry. From a base of 15 customers in 2005, Mr. Puritt says the company’s Philippines operations now provide services to about 40 clients. At the same time, revenue and profitability in the Philippines have quadrupled.
Telus’ clients include several North American telecom and cable companies. Call centre workers in the Philippines provide services such as 411, billing, and technical support to customers. Other clients serviced from the Philippines include utilities and electronics firms. It also handles support for one of the world’s largest online video game makers.
Ironically, it is the Philippines’ colonial past (it was a U.S. colony for much of the 20th century and before that endured more than 300 years of Spanish rule), that has helped foster the rise of the call centre. Young Filipinos are steeped in American pop culture, from music to movies to NBA basketball. Compared to their counterparts in India, they speak English with an accent that is more American and “more pleasing to North Americans,” says Jeffrey Uthoff, the president of Telus International’s Philippines operations.
Attracting and retaining qualified workers remains Telus International’s biggest challenge. Experienced call centre workers are in high demand in Manila and hopping from job to job in search of higher pay and better benefits is common. The industry’s average annual attrition rate is a staggering 61 per cent. Telus says it has an attrition rate of less than 50 per cent, but the company is now going to extraordinary lengths to keep employees happy.
Telus staff can, for example, work part-time toward a university degree at the office. Partnering with local schools, the company heavily subsidizes tuition costs and brings professors to its call centres during the evenings to deliver lectures and lessons to employees before they start their shift. The company calls the program Telus International University.
Almost all of the global outsourcing industry heavyweights – firms such as Infosys Ltd., Convergys Corp. and even a unit of the Indian multinational conglomerate Tata Group – have now launched operations in the Philippines. While India remains the dominant player in software and information technology (IT) support, the Philippines is now the preferred destination for voice-based customer service.
It’s an economic advance that is helping reshape a country that has endured decades of weak growth, corruption and persistent poverty. Common among industry executives and many government officials is a belief that call centres are contributing to the creation of a new middle class that could help propel the Philippines to join the economic ascent of its neighbours, including Thailand and Vietnam.
The starting salary for a call centre worker in the Philippines is between 12,000 and 15,000 pesos per month ($278 – $348). It may not sound like much but it’s more than a bank teller makes in Manila and is often enough to support a family in a country where the annual GDP per capita is about $2,000.
Opportunities for call centre workers come quickly. Many earn a promotion after six months, advancing from agent to trainer and, eventually, to a supervisor or management role.
Increasingly, these jobs offer young Filipinos an alternative to having to travel overseas to find well-paying jobs. The Philippine economy remains heavily dependent on money sent home by citizens working in foreign countries. At about $20-billion per year, (about $2-billion sent from Canada) remittances account for between 10 per cent and 11 per cent of the Philippines’ annual GDP. While entry-level call centre workers do not make as much as overseas workers, the lower cost of living in the Philippines makes a big difference, and call centre jobs allow families to stay together.
The knock-on effects of the fast-growing industry are transforming parts of the capital. In business districts such as Makati City and Ortigas, there is a severe shortage of commercial real estate suitable for call centre operations. More than 90 per cent of the new office space being built in Manila is slated to become call centres.