The Philippines is going to respond to perceived risks to its dominant market share in the contact centre industry and elsewhere, according to a report in Bloomberg. The main threat identified in the report is from China, which is becoming increasingly efficient and effective in selling its services – but at Intelligent Sourcing we’d argue that the market position was going to come under pressure anyway.
It starts like this. In the early 2000s or perhaps even earlier, the Philippines starts to gain serious ground. It does so because its cost base is lower than many Western economies so it can pay less without damaging its workers’ lifestyles.
This is all good stuff so far. Fast forward to around 2015, however, and a visit from what was then Professional Outsourcing Magazine (and is now Intelligent Sourcing) to some contact centres in South Africa. We were accompanied by some people from the Philippines outsourcing association and quite noticeably they were surprised at the amount of people not working from scripts.
OK, that can change over time but in 2015, certainly, the typical business model from the Philippines workers appeared to be a little dated.
Even if that’s been overcome (and my own experience with a contact centre operative as an ordinary customer recently suggests it probably has), you have the advance of robotics. This would mean the cost base advantages disappearing as robots are inevitably cheaper than even the cheapest of workers.
Intelligent Sourcing and its predecessor have published a lot about what can be done about this sort of market pressure – focusing on added value that robots can’t duplicate, for example. It will be instructive to observe what moves the Philippines makes, and how effective they turn out to be.