Call Center Industry Flourishes in Cebu

As the local BPO industry continues to grow, the Philippines is on the fast track to becoming one of the  prime outsourcing destinations in the world. Next to Metro Manila, Cebu City is considered as one of the most important BPO destinations in the country. As more and more investors flock to the city, the “Queen of the South” is fast becoming the largest call center hub in the Visayas region.

Business Process Outsourcing (BPO) is one of the fastest growing industries in Cebu City. Because of the low cost of labor, more and more foreign and local companies are now setting up operations in the city. There are already a number of call centers in the area, and more are still on the way. Some of the large Metro Manila based call centers have already set up a second or “provincial center” in Cebu.  Even a few small and medium BPOs have bypassed Metro Manila entirely and gone straight to Cebu.  Coupled with an exceptionally skilled workforce and a lower cost of living, it’s no mystery that the Philippine BPO industry is alive and well in Cebu City.

The ability of most Cebuanos to understand and communicate in fluent English is also an important advantage in the city’s outsourcing industry. As English is considered the lingua franca of the call center industry, a rudimentary knowledge of the language is essential in fields like customer service and telemarketing.

The average salary of a call center agent in Cebu is between Php 13,000 and Php 15,000 per month, while the salaries of Manila-based agents range from Php 15,000 to Php 18,000. This is primarily because Manila is a Central Business District (CBD) and boasts a more competitive workforce than in Cebu. However, employee attrition rates are lower in Cebu, indicating higher job satisfaction among call center agents in the area.

In terms of operational costs, setting up business in Cebu is cheaper than in Manila. Rental rates are 31% lower in Cebu, commercial office space going for as little as Php 250 per square meter. The average rental rate for commercial office space in Manila is Php 800 per square meter.  Electricity and other utility expenses are also 40% cheaper in Cebu, electrical expenses costing as little as Php 4,000 per month for smaller-scale businesses.

According to Gregory Kittelson, Outsourcing Consultant of Makati-based Kittelson and Carpo Consulting, “The growing number of foreign investors is a strong indication that Cebu City is fast becoming an important BPO center in the country. More and more foreign companies are now tapping into the local workforce, injecting large amounts of capital into the economy. I believe that this bodes well for the future of Cebu City’s outsourcing industry.”

The growing BPO industry has also created a number of job opportunities for Cebuanos, providing solid employment for the local workforce . This, in turn, has further boosted the local economy. A recent study by the Department of Trade and Industry puts the GDP growth at 4.5% in 2008. Experts are also expecting a steady increase in employment for the second quarter of 2010.

Although call centers in Manila work at a faster pace and are considered more professional, Cebu is still considered the #1 provincial destination for foreign multinationals and BPOs. And As the local outsourcing industry continues to grow, Cebu City will continue to establish itself as one of the prime outsourcing destinations in the Philippines.

Call Center Industry Prospers in Cebu

By: Kathleen Yu

As the local BPO industry continues to grow, the Philippines is on the fast track to becoming one of the prime outsourcing destinations in the world. Next to Metro Manila, Cebu City is considered as one of the most important BPO destinations in the country. As more and more investors flock to the city, the “Queen of the South” is fast becoming the largest call center hub in the Visayas region.

Business Process Outsourcing (BPO) is one of the fastest growing industries in Cebu City. Because of the low cost of labor, more and more foreign and local companies are now setting up operations in the city. There are already a number of call centers in the area, and more are still on the way. Most Metro Manila based call centers have already set up operations in the city. Some small and medium BPOs are even bypassing Metro Manila and going straight to Cebu. Coupled with an exceptionally skilled workforce and a lower cost of living, it’s no mystery that the Philippine BPO industry is alive and well in Cebu City.

The ability of most Cebuanos to understand and communicate in fluent English is also an important advantage in the city’s outsourcing industry. As English is considered the lingua franca of the call center industry, a rudimentary knowledge of the language is essential in fields like customer service and telemarketing.

According to Gregory Kittelson, Outsourcing Consultant of Makati-based Kittelson and Carpo Consulting, “The growing number of foreign investors is a strong indication that Cebu City is fast becoming an important BPO center in the country. More and more foreign companies are now tapping into the local workforce, injecting large amounts of capital into the economy. I believe that this bodes well for the future of Cebu City’s outsourcing industry.”

The growing BPO industry has also created a number of job opportunities for Cebuanos, providing solid employment for the local workforce . This, in turn, has further boosted the local economy. A recent study by the Department of Trade and Industry puts the GDP growth at 4.5% in 2008. Experts are also expecting a steady increase in employment for the second quarter of 2010.

As the local outsourcing industry continues to grow, Cebu City will continue to establish itself as one of the prime outsourcing destinations in the Philippines.

Ayala sees call center rentals falling by 10%

THE rental rates for outsourcing offices may fall by 10 to 15 percent this year because of the higher supply of office space coming into the market and the global recession, Ayala Land said in a briefing yesterday.

Another proof that the economic slowdown has washed up on the Philippine shore is that installment sales of Ayala Land’s residential properties have increased to about 5 percent last year from about 3.5 percent in 2007.

Twenty-two percent of the company’s total residential sales came from overseas Filipinos.

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Local BPO industry anticipates 50% growth in labor requirements

Business process outsourcing (BPO) service providers are retaining their workforce in the global financial crisis.

This year, 82 percent of BPOs even expect a positive employment growth rate, companies need to strengthen corporate strategies to attract new workers and retain their people.

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Teletech expands will create 2000 more jobs

Teletech, a foreign business processing and outsourcing company, further expanded its operations in the Philippines and helping provide more good paying jobs for Filipinos.

In Iloilo City today, Teletech opened a brand new 8,083 square-meter call center facility that includes its state-of-the-art communication and related equipment.

Maulik Farekh, Teletech executive vice president and general manager for Asia said this year, they would need some 2,000 employees to increase their current 23,000 workers to 25,000 in 12 locations across the country. [read full article...]

Convergys expands RP ops, 1K jobs created

Convergys continues to expand its Philippine operations, with the opening of another call center at the UP-Ayala Technohub in Quezon City.

Located across UP Diliman, it is the US-based firm’s eleventh call center in the country in five years. It has seven in Metro Manila, three in Cebu City and one in Bacolod City, and company officials say it will open three more this year.

This new facility will house up to 1,000 people, bringing Convergys’ total headcount in the Philippines to approximately 16,000.

In May last year, Convergys announced the addition of five more sites located in Cebu, Quezon City, Sta. Rosa (Laguna) and recently Glorietta 5 in Makati. [Read full article...]

Raising the competitiveness of the Philippine outsourcing industry

The IT outsourcing and business process outsourcing markets

The outsourcing market has traditionally been divided into two major categories: IT outsourcing and business process outsourcing.

IT outsourcing focuses on farming out functions specific to an organization’s Information Technology group. This is an area that took off, especially during the dot-com boom and the 2001 economic slowdown, as multinationals found it an easy way to reduce costs. Activities range from Application Development and Support to Data Center and Infrastructure Management. Business process outsourcing focuses on farming out non-core, somewhat commodity functions common to most organizations (Call centers, Payroll, Payables and Receivables, etc.) and is sub-categorized into Voice-based and non Voice-based BPO.

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Startek eyes 1,100 agents for Makati hub

MAKATI CITY, Philippines–US outsourcing firm Startek Inc. said it will hire call center agents to fill up 1,100 seats in the company’s newly inaugurated facility in Makati, an executive said.

“It makes great sense to invest in the Philippines’ BPO industry set to grow by 35 percent this year according to BPO industry groups CICT [Commission on Information and Communications Technology] and BPAP [Business Processing Association of the Philippines]. We want to be part of that growth,” said Larry Jones, Startek president and CEO, during a briefing.

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Arroyo opens call center in Makati

MANILA, Philippines — President Gloria Macapagal-Arroyo opened a new business process outsourcing (BPO) center in Makati City on Monday, underscoring the health of the sector amid the global recession.

The facility, owned by Startek Inc., is the listed American firm’s first contact center overseas. Company officials said they chose the Philippines over other BPO hubs such as India because of the “flexible” and “well-educated” English-speaking work force here.

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BPOs plan to hire more agents in ’09

Two-thirds of the business process outsourcing (BPO) companies in the Philippines plan to expand their workforces next year despite the global economic slowdown, as businesses in developed countries are expected to farm out some of their operations to cheaper locations, a recent survey showed.

The survey on the 2009 business prospects of the Philippine BPO industry, done in November with 190 respondents, showed the bulk of the growth would be in “non-voice” services, a departure from traditional call center services.

According to the survey results, 65 percent of BPOs expect to expand their workforces next year by a low of 16 percent to a high of 200 percent.

The more conservative respondents said they would either keep their existing workforces or limit expansion to 15 percent.

The results belie fears about a slowdown in the industry as overseas clients face tougher business environments in their home countries

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