India’s call center industry is currently facing a serious loss, as 70% of its call center market transferred operations to its biggest competitor, the Philippines. An Indian business group reported that India will lose USD 30 billion of foreign exchange earnings after call centers in the Philippines became the top pick of voice service investors.
The Associated Chamber of Commerce and Industry of India (Assocham) highlighted the more neutral English accent as the winning factor of Philippine call centers. Assocham Secretary General D. S. Rawat explained that the Philippines’ leverage on the English language has attracted foreign businesses, even Indian-owned ones, to transfer operations to the Philippine soil.
Aside from the upper hand in accent, Indian firms have started establishing outsourcing operations in the Philippines because of its large pool of well-educated, English-speaking, and highly employable graduates. Assocham’s report explained that almost 30% of Filipino graduates are skilled enough to land a job easily compared to the 10% in India. This boiled down to a matter of costs, since hiring highly proficient individuals means shorter training period and lower expenditure on training resources.
“Cultural proximity to the US together with availability of talented manpower are key reasons as to why BPO companies prefer expanding their operations in Philippines,” Rawat added.
Aside from the Philippines, the report also identified countries in Eastern Europe as contributing factors to the weakening Indian outsourcing industry.
The report suggested that Indian business process outsourcing (BPO) companies need to reduce costs and expand non-English call center operations to secure their growth. By transferring to smaller towns, training costs may also be lowered because provincial cities have proven to show lower attrition rates.
India has been a leader in the global outsourcing scene mainly because of the low costs Indian BPO companies provide to clients with budget constraints. Assocham’s study only proves that the advantages of the Philippines in terms of language and cultural affinity with the West, plus the skills of Filipino workers, have finally translated into a financial edge over India.