For about a decade, it was an image that best captured India’s growing links with the global economy. The image of young men and women hunched over desks sporting headsets and speaking into microphones, answering customer queries on credit cards to insurance policies and collections to telemarketing, captured India’s call centre boom.

It defined India as the “world’s back office”, much like neighbouring China, which has been immortalised as the “world’s factory”. But that may be changing.

The Philippines is fast upstaging India’s back office supremacy, with BPO service providers and customers seeming to favour the Pacific Ocean nation as a better place for “voice-related” work, the mainstay of the global outsourcing business.

“India has lost tens of thousands of jobs to the Philippines. The calibre of English is better and companies don’t have to put up with the mess (that exists in India) there,” says Pramod Bhasin, president & CEO of Genpact, India’s largest BPO company.

The “mess” that Mr Bhasin refers to includes arranging transport for employees, security, power back-up in offices, basic infrastructure that companies can take for granted in the Philippines and adds to costs in India.
Unsurprisingly, that country has become a preferred destination, especially with the US companies, many of which are more comfortable with the English accent spoken there. US customers account for over 50% of the global outsourcing business.

Ananda Mukherji, MD & CEO of specialist BPO provider Firstsource Solutions, says costs are more or less similar in both countries. This means the accent proficiency in the Philippines tips the scales in its favour.

Many of the Philippines’ advantages are thanks to the US rule, which bequeathed the English language to that country with its distinct accent along with a robust telecom and broadband network laid out by the US defence forces.

“To begin with, just 1-2 out of every 10 are recruitable for American accent voice tasks (in India). And even after training they are not quite as good as you get in the Philippines,” adds Mr Bhasin.

Adds Prabhakar Bisen, head of the Philippines operations of WNS: “Apart from affinity to the US culture and English-speaking skills, the country’s time zone advantages make the Philippines a natural choice for providing 24×7 service to global companies, particularly those based in the US.”

WNS is one of many companies that has set up shop in the Philippines, attracted by its “high-quality voice skills” and its status as the third-largest English-speaking nation in the world with a 94% literacy rate. And, it is not the only one.Genpact, Wipro BPO, Intelenet, Aegis BPO and Firstsource are all ramping up their operations. Genpact has about 2,000 employees in the Philippines and expects to scale up operations by 40-50% in the next 12 months. Firstsource has about 500 staff in Manila, while WNS has increased staffing to 1,100 from 200 in the past 18 months, delivering a mix of voice and back-office services for telecom, consumer products, travel and financial services clients.

In the past 12 months, Wipro BPO has set up a 1,000-seat centre in the Philippines’ Cebu City, with staff there engaged in telecom, healthcare, energy & utilities-related tasks.

The Philippines has also become the destination of choice for global firms, which in the past were big on India.

Convergys, the $2.7-billion world’s largest call centre company that for years prided itself on the fact India had the largest concentration of employees outside its home base — US, now has more people in the Philippines than in India. Convergys has around 12,000 employees in India, but is set to cross 20,000 in the Philippines.

StarTek, which provides customer services and technical support for customers like AT&T, T-Mobile and Verizon, has also opted for the Philippines over India.

Industry players reckon that India could have lost around 100,000 call centre jobs to the Philippines, although with annual revenues of $11 billion, India is still the largest player in the BPO sector, more than double of the Philippines’ $5 billion.

Although the call centre industry initially grew in India, quality concerns and infrastructure constraints have forced companies to look at other countries, and the Philippines has stepped into the breach. The high employee turnover in India also does not help — the BPO sector in India operates with attrition levels of up to 25% compared with less than 20% in the Philippines.

The government in the Philippines has seized the opportunity — it offers tax incentives to companies for setting up call centres and has a $100-million budget to train people for back-office jobs.

Som Mittal, president of software and BPO industry body Nasscom, acknowledges that the Philippines has grown, but says India’s BPO sector has also moved on from offering pure voice-based services.

He says India remains a lead destination for “services support”, while the Philippines is more about voice work for US customers and as a disaster recovery site.

“Within call centre work, India is preferred for scale and problem-solving type of tasks like technology help desks,” says Mr Mittal.

Source: http://economictimes.indiatimes.com/infotech/ites/Indian-BPOs-lose-voice-to-Philippines/articleshow/5379192.cms