HGS Offshoring Experts Shine Spotlight on the Philippines

While offshoring contact centers in the Philippines began as a labor arbitrage play many years ago, fast forward to 2019 – what’s changed? The answer comes with insights from offshoring expert Peter Ryan, as well as HGS VP of Product Marketing, Lauren Kindzierski; HGS VP of Transitions and Solution Design, Manish Sharma; and Senior Manager of Client Services, Djohanni Alejandro. At our February 21 webinar, our MVP team shed light on how HGS is transforming offshore CX through a combination of digital innovation and better employee engagement. Our offshoring gurus taught attendees how to:

  • Improve agent retention rate.
  • Drive cost savings.
  • Raise the bar on customer experience quality.

As with all of our webinars, we first conducted some attendee survey research. And all webinar poll signs point to vested interest in offshoring strategy including the Philippines. Our Webinar Poll asked, “How would you describe your familiarity with Philippines as a consumer support location? We had an even split of 42% of respondents answering  “Nascent—we’ve just begun exploring offshore options” and  “we’ve been offshoring high contract volumes for years,” with 16% starting to experiment with small/pilot programs.

At our post-webinar QandA, Lauren laid the groundwork for the right approach:

Q1: What do you think the next 10 years is going to look like for the Philippines?

Peter Ryan A: The Philippines is going to evolve very systematically and in lock step with the demands and requirements of enterprises in the broader Anglo-sphere—given the fact that it has become really such a mainstay for servicing end users in North America, the United Kingdom, Australia, and New Zealand. Consider the channel choices, functional requirements, and the technologies that are going to be in demand by enterprises that have chosen to house their contact centers in the Philippines. This will require that stakeholders in the Philippines are in a position to satisfy those requirements. We have seen, over the past couple of decades, that the Philippines has done a great job evolving over the course of the past 20 years. There is no reason to believe that it will not have the same level of lock step evolution and alignment with the Western markets. Certainly we shouldn’t underestimate that the domestic industry in the Philippines is going to grow, and that’s going to have a profound impact on the industry and response to an even larger segment of consumers.

Q2: Is the Philippines a good location to service companies with a bilingual French customer base?

Peter Ryan A: I’m not going to mince words about this. The Philippines is very much an English language value place, as far as I am concerned. Now this is not to say that you cannot find other languages that might be practical such as Spanish or French Canadian. I would say that you would certainly be able to find some agents that might have those bilingual capabilities, but the reality is that the overwhelming majority of the agents in the Philippines will be servicing English language consumers exclusively.

Q3: Some analysts think that there is a trend in moving call volumes away from the Philippines. I don’t see it as an analyst myself in this space. But I would like to know what the panelists think.

Peter Ryan A: Over the course of the past decade and a half, we have seen steady growth in the Philippines. I have done market forecast work that has exemplified this. What I’ve tracked over the years is very much double-digit growth in the low teens in the Philippines year on year. And we have no reason to believe that the enthusiasm of enterprises and outsourcers is going to dissipate. What I would say is that there is a broader trend that we are seeing toward more offshore locations that are popping up in different parts of the world. For example, Jamaica’s become very popular over the course of the past few years. We are seeing call volumes going to that part of the world. We are seeing call volumes continuing or interaction volumes going into India. These are just two examples. But I think what’s happening is, given especially the last few years with the record low levels of unemployment, you’ve got so many enterprises and their BPO partners. They are looking for alternative locations for larger numbers of call volumes to go to different markets. It’s not to say that the work is moving away from the Philippines. But what we are saying is that there is a lot of work going out of traditional demand markets into other markets, to satisfy the need for that labor pool.

Q4: How do agents in the Philippines differ from those in the US with regards to work expectations and attrition rates?

Djohanni Alejandro  A: I think they are very much the same in the sense that, as we mentioned earlier we have a very close affinity toward US or Western culture. These employees would like to grow fast. They would like career advancement in the next six months. They would like to see improvement sooner, compared to a more tenured or a more seasoned agent. It’s very much the same, I would say.

Q5: Do you think that work at home will take hold in the Philippines?

Peter Ryan A: There’s no question that we’re seeing work-at-home solutions grow. Traditionally, this has been much an onshore play, with most of the work happening in the United States. But it is becoming much more of a pervasive business model in different parts of the world.

Q6: Hurricanes and typhoons are very common weather disrupters specifically in the Philippines. Should companies be concerned with this in terms of business continuity and re-routing call volumes?

Manish Sharma A: I don’t think that has affected service delivery because of several redundancies that are built into the model to ensure business continuity. I haven’t seen typhoons impacting service delivery at HGS at least.

Q7: What is the biggest challenge to entering the Philippines?

Peter Ryan A: There are a few challenges for a company or executives that are looking to enter the Philippines for the first time. I think one of the biggest challenges is establishing where the company would like to situate its point of delivery. Another thing that might be a challenge is the fact that you are going to be working through the night and sleeping during the day. Adjustment can take some time for certain people. But at the same time, that’s the reality. You are dealing with a roughly 12-hour time differential for North America. So you need to take into consideration that adjustment from a time zone perspective.