Is the global economic crisis affecting the offshore call center industry?

There are a lot of opinions on whether the current financial crisis is going to hurt the Philippine call center and BPO industries or whether it could actually help. In a recent outing hosted by Globe Telecom, the host of the event talked about how great the crisis is going to be for the call center Philippines business because now, many US companies are going to be looking for ways to save money, so they will be more likely to outsource.

I have heard this “global crisis equals more call center work for Philippine outsourcing” argument many times, and I wonder if it is really true. Aren’t US companies and all businesses, for that matter, always looking for ways to save money? However, I see some logic to this argument because when times get tough, companies are more likely to look for ways to save money that they may have overlooked when they were going great.

Outsourcing to the Philippines can prove beneficial to the bottom line.  But is the global recession the catalyst that will cause a company to outsource to the Philippines, and is the increase in outsourcing enough to compensate for the lost revenues from other call center businesses?

For example, you own an airline and use inbound call centers to process reservations and ticket sales. You may employ a vast number of call center agents when business is good. But what happens in times like now?

People are flying less, so there are fewer reservations, and call volume is way down.  You probably don’t need many reservation agents, so you force the Philippine call center to reduce staff and employ fewer agents for your inbound calls.  Jobs are lost, and business is not so good for that call center you were using.

This also works when thinking about a customer service campaign. You partner with a Philippine business process outsourcing call center to answer customers’ questions about the scooter your company is selling, but now, you are selling 40% fewer.  Shouldn’t you expect to get 40% fewer inbound calls and therefore need fewer agents?

I spoke with a human resources specialist to get his take on how the crisis affects hiring. “On one hand, you have some call centers that have gotten really slow here in the Philippines. But on the other hand, you have a lot of small call centers that are growing fast.” He added that some contact centers have had to drastically reduce staff because their clients in the US have been slow in paying.

But in general, he feels that the slowdown is evident in Cebu City, where he recruits.  “It has made it easier for us to find talented call center agents with lots of experience.”