Offshore outsourcing has become increasingly common over the last few decades as businesses take advantage of the lower costs offered by contact centres based around the globe. BPOs in the Philippines have been incredibly successful, growing from virtually nothing to becoming the biggest providers of call centres in the world. Thousands of Australian businesses have been enticed by the high level of English proficiency and huge savings.
The attraction of the Philippines is obvious. Costs aside, it has one of the world’s largest English-speaking populations; according to official statistics, over 100 million Filipinos speak English. The country’s history has led it to retain a close affinity to Western, and especially culture. It’s little surprise that over a million of those English speakers are employed by the Philippine BPO industry.
Like any business decision, it is important to differentiate cost and value. Typically, when using a BPO provider in the Philippines, it’s possible to save 50-60% on the costs of an in-house call centre and do this while maintaining or even improving the quality of the service offered. The temptation is to look for even bigger savings, but the risk is that the cost in quality far outweighs the discount on your invoice.
If you choose a domestic provider, you can be fairly confident that the call agents will have a similar level of English proficiency as your customers. While there might be a significant range in accent between call centres in Australia, the operators will likely have grown up in an English-speaking household and shared a similar education. This is never going to be the case when offshoring your BPO requirements to the Philippines.
While the vast majority of Filipinos can speak and understand English, they do not all boast the same levels of fluency. Not all Filipinos use English as their first language, and there will be significant variations depending on their family, education, and social upbringing.
Clearly, this will make a huge difference when it comes to recruiting call agents. The demand for English-speaking agents is such that they can demand higher prices for their labour, and this is how some BPOs in the Philippines can offer significantly cheaper prices. A call agent with poor, heavily accented English might only get $2-3 an hour, with the BPO provider charging the client $7-8 an hour. By comparison, a fluent English speaker can expect to earn twice as much, with the BPO provider having to charge more, perhaps $12-16, as a result.
The difference between the two will be huge. Premier BPO providers in the Philippines, such as PITON-Global in Manila, employing the best agents, will offer staff who are able to converse fluently and naturally, often with little or no accent, and because they usually access English-speaking media and entertainment, they are familiar with the idioms that would catch out less fluent workers.
There is a huge cost for getting it wrong. Customer service is a vital part of any business, especially considering that customers frequently pick up the phone when things have already gone awry. Having a BPO provider with staff who cannot communicate effectively is likely to exacerbate rather than resolve problems. Frustration with communication divides is the biggest complaint about offshore call centres. Paying the extra to avoid these while still making a large saving makes good business sense.
The failure rate of BPO projects with low-cost operators is huge. Business research suggests that six in ten call centre outsourcing projects fail, but 90% of these failures are with low-cost operators: going low-budget might work, but it’s a long shot.
Paying more for a premium call centre in the Philippines makes sense. The extra cost buys you better service from an operator that can afford better facilities, technology, and staff. Ultimately, though, what’s important to customers is the service they receive from the contact centre, which is why it’s worth paying a little more, because that’s when English matters.
Michael Carry is the lead editor for Bonanza Magazine. Michael has been working as a freelance journalist for nearly a decade having published stories in the New York Times, The Plain Dealer, The Daily Mail and many others. Michael is based in Dawrin and covers issues affecting his city and global news. When he is not busy writing, Michael enjoys reading books and walking with his dogs.
