Outsourcing contact centre services to the Philippines can produce significant savings. Typically, a premium provider will be around 40–50% lower in cost than an in-house operation. These savings can be made while maintaining and even enhancing service levels. However, many businesses’ temptation can be to look for even bigger savings. After all, if you can get better service at half the price, why not look for a 60% saving?
“The problem, however, is that this presents a big risk. The 40–50% saving is often cited by those involved in the offshore outsourcing industry because it marks the tipping point: businesses can get cheaper, but every penny saved increases the risk of failure,” says Ralf Ellspermann, CEO of PITON-Global, a leading contact centre in the Philippines. What is it about this range that makes it so important?
To know why it’s necessary to understand what makes the premier contact centre services in the Philippines so successful, you should first keep in mind that contact centres are complex organisations. Each provider will have their strengths, but typically, they will all share characteristics. They tend to work from custom-built premises, using a design that is suited for contact centre work. And they tend to keep up to date with technology. Contact centres, for example, were early adopters of AI, which has necessitated frequent software and hardware updates to match a rapidly developing field.
The big area where low-cost providers cut costs is on staffing. For most businesses, staffing costs will be their biggest expenditure, and even with the low labour costs of the Philippines, contact centres are no exception. A budget provider, quite simply, offers a low price because they pay their call agents significantly less. The consequence of this is obvious: because they offer a lower salary, they get lower-quality staff.
“Typically, a premium provider will have a starting agent salary of around US$4-5 per hour. While low by Western standards, it is a good salary in the Philippines and can attract well-educated and fluent Filipinos. The best call agents can often demand more, and, obviously, for many, it will be the start of their career development,” says Ellspermann.
Low-cost providers can only afford to pay agents around US$2-2.5 an hour; the difference in salary will be the bulk of the savings they offer clients. The problem for low-cost providers is that around 70% of call centres in the Philippines would be classified as premium providers that offer higher rates. The best call agents have no difficulty gaining employment with them. They do not need to work for the low-cost providers, even to gain experience. Therefore, low-cost providers have no choice but to use the less fluent and less able call agents.
“Using contact centres in the Philippines to outsource business processes can be one of a company’s best decisions. But that’s only the case if they partner with a premier provider. The savings might be a little lower, but they won’t pay the cost in failed contracts and dissatisfied customers,” explains Ellspermann.
