WHEN the first call center in the Philippines opened in 1992, few could have predicted the far-reaching impact this new industry would have on the nation's economy and its population.

"In the three decades since then, the Philippines has managed to position itself as the world's call center capital. The contact center outsourcing industry has become a leading driver in the Philippine economy and employs more than a million people," says Ralf Ellspermann, chief executive officer of Piton-Global, a leading mid-sized call center in the Philippines.

The good news for the Philippines is that this growth shows no sign of slowing down. If anything, experts project the outsourcing industry will generate $29 billion in revenue by the end of 2022. Employment in BPO companies is also expected to grow from its current 1.3 million to 1.4 million full-time employees by year's end.

Reasons for outsourcing growth

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This amazing growth has been enabled and sustained by US and foreign companies looking to cut costs and improve efficiencies by outsourcing their business processes to the Southeast Asian nation. Access to skilled talent using the latest technologies and a government that actively supports the call center industry has also been key in attracting foreign clients to the Philippines.

History has proven that call center outsourcing to the Philippines offers companies a solid return on investment with few risks. Let's take a closer look at why outsourcing to BPOs in the Philippines has become the go-to business strategy for US and global companies.

Lower labor costs

Saving on labor costs is one of the main driving factors behind call center outsourcing to the Philippines. US and global businesses can save big by outsourcing to the Philippines compared to hiring local employees. A call center agent in the Philippines earns $2.50 to $6 per hour, significantly lower than US agents who do the same job. Because of this wage gap, US companies can save as much as 70 percent in labor costs by outsourcing to call centers in the Philippines. And since aspects like hiring, training and benefits are in the hands of the outsourced call center, companies also save on these costs.

Enhanced customer service

Most Philippine call center agents boast of excellent English-speaking and literacy skills and a neutral accent well suited for effective customer service communications. "Filipinos are also friendly, polite and emphatic to their customers, traits that raise the customer experience bar even higher," says Ellspermann.

Solves staffing shortages

Working in a call center is an attractive career option for many college graduates in the Philippines. Companies are always hiring, and the pay is better when compared to other job opportunities. Thousands of college students enter the Philippine workforce every year armed with the advanced skills and training needed to succeed in the call center industry. Once they find a job, most workers are not likely to leave in search of other opportunities. For American companies, this high level of employee retention solves the staffing turnover problems created by the Great Resignation.

Strong government support

The Philippine government has long nurtured its lucrative call center industry. In 1995, the government recognized the industry's potential by creating the Philippine Economic Zone Authority (PEZA), which offers foreign investors attractive incentives like four-year corporate tax exemptions, duty-free imports for equipment and supplies, and local tax exemptions and permits. The country's Technical Education and Skills Development Authority (Tesda) also offers advanced customer support training that guarantees a skilled workforce.

Contact Center Outsourcing to the Philippines is here to stay

There's a simple reason why major corporations like AT&T, HBO, Anthem and Best Buy outsource their contact centers to the Philippines. It helps them save money, achieve operational efficiency, and improve the customer experience, all of which are essential for companies to compete in an ultra-competitive business world.

"As long as global companies continue to see business value in migrating their business processes offshore, the future of the BPO and call center outsourcing industry in the Philippines looks bright indeed," ends Ellspermann.