The declining proficiency in English of call center workers, poaching among rival companies, and global competition threaten the Philippines' "sunshine industry".

Liv, 28, an electronics and communications graduate, was early for her 8 a.m. job interview at Sitel Philippines, a call center company based in Libis, Quezon City. Wearing no make-up and clad in shirt and jeans, she pulled out a comb and brushed her hair as she waited for her turn.

Liv wants to leave her present job at another call center, where she has been working for two years now, grossing P30,000 a month. In a brief talk, she told NEWSBREAK she was bored with her work and felt she was no longer growing professionally, and would like to try another call center.

Her attitude is typical among those employed in call centers, regarded as a “sunshine industry” for its vibrancy and fast growth in the past several years.

In a sense, her restiveness mirrors the dynamism of the industry. Considered to be still in its infancy, the sector is fluid, attracting fresh college graduates from diverse courses mainly for the high start-up salary it offers compared to other white-collar jobs.

Not surprisingly, it has expanded by leaps and bounds. Total investments have reached about US$800 million. Sure, there are still more farmers and employees in the manufacturing sector compared to the around 40,000 agents at the call centers today, but what makes the industry exciting is its robust growth.

From its early days in the late nineties, when there were just a few hundreds of young employees trekking to their offices during unholy hours, total workforce has since been expanding at a whopping average of 130 percent each year—a growth rate unprecedented in the Philippines, and steeper compared to India, Ireland, and other countries vying for a slice of this soon-to-be $100 billion global business. In 2001, for example, there were only 1,500 call center agents, a far cry from the approximately 40,000 agents now.

The top call centers worldwide have set up shop here such as Convergys, Sykes, Teletech, West, and Sitel. Although India has always held top billing for outsourced businesses, the Philippines has become a competitive alternative. The Philippines wooed investors with a young workforce, low labor costs, its familiarity with American culture, its intelligible English, and its well-established and relatively cheap telecommunications infrastructure. Companies spend anywhere from $2,500 to $5,000 to set up one seat which can be used on a number of shifts, depending on the requirements of the clients.

A little over five years old, the industry holds promise of continuous growth. More than 60 call centers now operate in the country, and more companies are expected to come in. The prospects seem rosy. Industry estimates point to a total of 250,000 call center agents in five years, generating total revenues of up to $4 billion.

The trend right now is to expand in the provinces. Four call centers are currently operating in Cebu; two each at the Clark Economic Zone and in Dumaguete; and one each in Laguna and Davao. Rita Trillo of Sitel tells NEWSBREAK that plans are afoot to expand Sitel’s service in Davao, Cagayan de Oro, and possibly Batangas.

Threats and Concerns

Behind these numbers, however, are realities that, if not addressed, threaten to dampen the sector’s growth.

Out of 100 job applicants, a typical call center will hire only two to five qualified ones. Because of the sector’s exceptional growth in the past, it hired an average of 3,000 agents every month. Going by the low absorption rate of five percent, this means companies were processing up to 60,000 applicants every month.

It’s a tough job for human resources practitioners, like Carol Dominguez, president of John Clements Consultants Inc., a recruitment and training company. She said that for the past six months, her firm scoured the entire country, interviewed 5,000 applicants, and in the end, hired only 200. (Because of the workload involved in hiring, human resources practitioners in the call center sector are paid more than their counterparts in other industries, said Gerry Plaza, president of the Personnel Management Association of the Philippines.)

Another problem is that while Filipinos have been touted as generally English proficient, this skill has deteriorated through the years. Common weaknesses include grammatical errors; and interchanging their “P’s” and “F’s” or “B’s” and “V’s”; and incorrect pronunciation of words.

Stopgap measures had to be taken. Call center companies have tied up with some universities like the University of the East, Pamantasan ng Lungsod ng Maynila, and San Carlos University in Cebu. These schools are offering an elective course in English proficiency as a bridge course program for call center employment, says Guillermo Laguindanum, chief of the Board of Investments electronics division. Eight other universities in Luzon have followed suit recently.

Most companies cannot wait. Some accept “near hires” or those whom the company managers picked to train for a few weeks. If their English improves, then they are formally hired. “We turn down a big chunk of applicants because they can’t speak straight English. But if we give them a chance, train them, and they improve, then they are in,” Dominguez said.

She observes that Manila-based applicants tend to have difficulty because they speak “Taglish.” Those from the provinces have purer English because they don’t generally mix their dialect with English.

The challenges don’t end there. The company’s investment of P30,000 to P40,000 for the product and speech training of every new hire is wasted when, within the year, about 40 to 60 percent leave. This means the company is forever hiring and training to maximize its capacity.

But the common irritant among industry players is the practice of poaching. Companies offer high compensation packages to poach agents. Aside from the additional costs in training, this causes an artificial inflation of salary rates.

There is currently a gentleman’s agreement signed by an informal group of 30 human resources practitioners, that includes rules against “lobbying,” or the recruiters’ practice of hanging around and offering experienced agents higher salaries while at the lobby of a building where there are call center offices. Also in the offing is a system that helps companies keep track of “professional trainees,” or those who jump from one call center to the next before their training program ends. These jumpers earn while they are on training but are not yet assigned quotas or accountabilities.