Everybody is talking about the BPO bubble that has saved the Philippines economy and created jobs not only for Filipinos in Manila but also in the provinces. Eveybody's happy about recent expansions of established call centers and entries of new BPO companies in the Philippines. Recent developments, however, have made me think otherwise that this "BPO bubble" will soon be bursting and leave us knocked downed flat on our backs.
Think about it, two big things have recently been developing which should get economists worried. First, the continued strengthening of the local currency Pesos against the U.S. dollar has made it very very hard for outsourcing companies to scrape out profits. Most of the time, some call center companies are just left breaking even. Not good if they've got loan payments to pay of course. Secondly, the impending recession on the U.S. economy may not have a direct effect on the outsourcing business here but as times get harder in the U.S., Americans will spend less and less therefore companies will lose a lot of business. This loss in earnings will then make American companies look at other places where they can cut back and mend these losses. Guess where the areas of cut-backs will be?
Non-core business segments like customer services usually get the axe first when it comes cutting back expenditures and lessening operating costs. I make this conclusion based on experience. I have worked for clients that went under before and I have seen very good looking business go elsewhere.
When outsourcing clients see rising costs and no cost effectiveness in doing business here, there's is always that danger of business going to other places where they can find it. We may not see the demise of BPO business in the Philippines yet but the factors I've mentioned will definitely set a bad trend most of the people are not talking about yet.
5 comments here!:
Amen to that, we have one large client (not mine) whose hourly rate was reduced already, but after hearing from a competitor that they're getting a lower rate from another outsourcer, they're threatening to pull out and join their competitor's outsourcer (sounds weird, but it's true)! Clients, hard to understand, but without em, we won't be here at all!
callcentervet - i guess you're also thinking of venturing into a business. I am. I'm also thinking of leaving the call center industry.
Silvertooth26 - those are shitty clients. No wonder genpact told us that they are very choosy in choosing their clients because of these things.
recently, I heard of the misfortune of an applicant who got in in one of the call centers in cagayan de oro just a day before that call center closed. When they went to the site, all they found was an abandoned building. All fo the equipment for QA, the records and the call masters were gone... nada... kaputz! It was even more unfortunate for those who have busted their asses and then lost their jobs in just a blink of an eye...
guess the whole call center thing was just a fad... a temporary spark of hope to make ends meet.
@ andy, may we know the call center in CDO? I wouldn't think that a 10 year industry in the Philippines is just a fad. I've been in this industry myself for 7 years now. One of the ffg things might have happened in CDO: 1. it was just a temporary recruitment office 2. the client was ready to launch 3. they weren't able to get enough reps to staff the call center 4. it was a fly by night call center after all, etc. etc.
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