The social impact on The Philippines of its call centre industry.
When I set up the first UK-centric call centre in Manila back in 2000, there really wasn't much of a call centre industry in The Philippines. When looking for suitable office space and staff, I had to explain to real estate agents and recruitment agencies what a call centre was. Fast forward to 2012 and the situation is very much different. The call centre industry is huge with unreliable estimates suggesting there are now close to 500,000 call centre agents in the country with a huge proportion of those just in Metro Manila. I lived in The Philippines from 2000-2006 and now on my return visits, it's incredibly clear to me that the global call centre industry has now had a greater impact on Philippine society than it has had on any other country.
Improvements in living standards
The sheer size of the call centre industry has had a significant impact on the Philippine economy. When I first arrived, the city's sky-line was blighted by half-finished office blocks. The money to construct these buildings had dried up as a result of the Asian Financial Crisis in 1997 and whilst the other economies in South-East Asia had started to recover, the Philippines had not. Since then, those buildings have been finished and have been joined by a huge volume of office blocks to meet the demands of the call centre industry.
The economy has taken a massive boost from the billions which now come into the country ever year. This has created a large numbers of jobs in other sectors supporting the call centres including in security, catering, construction, telecommunications, technology and elsewhere. Unofficial estimates suggest that over 1 million indirect jobs have been created as a result of the call centre industry. The salaries of the call centre agents are well above the national average and this money is feeding through across the spectrum. Although many outsourcing companies have been enjoying tax holidays as incentives to invest, the employees have been paying tax which has fuelled the Government coffers and this has been much needed. GDP per capita is still languishing behind most of Asia but things are definitely on the rise. The demand for staff from the call centre industry is also changing employment practices in the non-call centre industry. For example, the minimum salary for a public school teacher is 17,255 pesos per month and for a nurse is 18,549 pesos. A team-leader in a call centre will earn far more than that. Such is the demand for call centre agents that some operators are offering starting bonuses of 30,000 pesos (about '450) to entice the best recruits. Overall, the figures for The Philippine economy are very strong. The stock index is at an all-time having increased nearly 200% in 3 years. Inflation is relatively low and this is being helped by a strong currency which is being fuelled by foreign currency flows from the outsourcing industry. At one point, the Peso was worth 107 pesos but it's not worth only 64.
The 24/7 culture
Another major impact of the call centre industry on society undoubtedly comes from the hours which most agents work. The majority of the agents work night shifts and this, in itself, has created a culture change. Although, it was rarely enforced, it was actually illegal to employ females to work night shift in The Philippines when the call centre industry started. The controversial 'section 130' of The Philippines Labor code prohibited work for females between 10pm and 6am but this wasn't that unusual given that hardly anyone worked night-shifts. The rules have now been changed but these 'unsociable' hours mean that call centre agents spend less time with their family which is so fundamental to Philippine society. However, before the call centre industry, the major opportunities for young Filipinos came in the form of working abroad in areas such as The Middle East, North America or in the more prosperous countries of Asia. Most parents believe that the inconvenience of their children working night-shifts is a far better alternative than only seeing them once a year on their return from Saudi Arabia.
I've recently spoken with a Filipino friend of mine who says there is evidence that the call centre industry could even be reducing the birth rate in The Philippines! The country has always had one of the highest birth rates in Asia and far higher than the UK but it has dropped significantly over the past 10 years. Although the evidence is anecdotal, I have little doubt that the unsociable hours and lifestyle are at least having some impact. Some might argue that the slowing down of the high birth rate might actually be good the country as a whole as even with this slowdown, the country's population is still growing rapidly. Manila is now very much a 24-hour society as anything from transport to shops, bars and restaurants serve the needs of call centre workers and this is all happening in a country where all the Filipino-language television stations still close down throughout the night.
The provincial impact
With all of this, the real impact of the call centre industry is even starker in the provinces outside of Metro Manila where incomes are substantially lower. The call centre industry is one factor increasing urbanisation in the capital which is already the most densely populated city on the planet. Many insiders believe that future growth of the industry will happen outside of the capital. There are already large industries in places such as the nation's 2nd city, Cebu & there are also much smaller volumes of call centre agents up and down the country. Many of these towns and smaller cities have become sourcing pools for Manila-based call centres but local Government officials and entrepreneurs are very keen for this trend to be bucked. The economies of the smaller cities are massively different to the metropolis of Manila. Many of the brightest of graduates in smaller cities tend to move away to Manila or abroad to seek employment opportunities. Even small call centres in these cities have helped to reverse this trend and just like in Manila are creating support industries for local entrepreneurs although on a much smaller scale. The trickle-down effect of these new call centre jobs will help to revolutionise these cities. The fact that these centres are predominantly locally-owned will also offer wealth-creating opportunities for locals rather than simply funding the coffers of foreign-based outsourcing vendors. The Philippines Government know this and have been very keen to support what they call next-wave cities ensuring that they have the infrastructure to be able to accommodate international clients of call centres.
Whilst the current situation is generally positive for The Philippines, there are potential risks to the society from the scale of the industry such as the following:
- What happens to the 20-something's when they're 30-somethings? Will they still want to work night shifts in call centres? Will there be other industries who can use the skills they've acquired or will they simply move abroad as previous generations have done.
- What happens if there is a slow-down in call centre traffic? Lets' not forget that companies have tended to offshore the more basic interactions which could be at risk from automation. A slow-down could reverse the positive trends we've seen.
- Are the large number of night-shifts going to have any long-term impact on the health of the employees? There is evidence to suggest it could without preventative measures.
The lives of many Filipinos have been positively influenced by the growth of the call centre industry. However, you don't create an industry of half a million people and generating billions of pounds in a developing nation without having a major impact. In the past 12 years, the population of The Philippines has grown by over 20% whereas the UK's growth has been less than 7%. These additional 17 million people are going to need jobs at some point and they're going to have to come from somewhere.
This article was written by Rob O'Malley, the Chairman of The British Philippine Outsourcing Council. He can be contacted on 077400 96598 or email@example.com