COVID-19 has transformed life and business. Overnight, sometimes literally, people and businesses had to adapt to a new reality of masks, physical distance, and shutdowns, sometimes with devastating effects. While call centres in the Philippines remain world leaders, they have not escaped the impact of the coronavirus.
“The effect on the global economy will, of course, be one of the most significant changes for Philippine BPOs. If the economy is contracting, or even just growing at a slower rate, then there is less demand for Business Process Outsourcing (BPO) to the Philippines or elsewhere.
On top of the economic uncertainty the pandemic has triggered, there are three key trends affecting the business outsourcing industry: reshoring of outsourcing, the transfer to work-from-home models, and the development of AI,” says Ralf Ellspermann, CEO of PITON-Global, a leading call centre in the Philippines.
Reshoring of outsourcing
Starting from a small base at the beginning of the century, the BPO industry in the Philippines has experienced rapid growth to become a world leader. Companies of all sizes use third-party business process outsourcing providers. Some larger companies, like JP Morgan and Facebook, saw the advantages offered by the Philippines—English proficiency, a Western outlook, and a pool of over a million experienced contact centre agents—and they established their own customer services in the Philippines.
While everyone was enjoying the benefits of locating customer services in the Philippines in normal times, when the pandemic hit, the landscape was transformed. When the entire island of Luzon was shut down, it meant that 60 million Filipinos were stuck in their homes and unable to report for work. While this quick action helped contain the pandemic, it meant BPO vendors in the Philippines were unable to maintain their usual services levels.
Although the situation was understandable, it gave pause to many businesses. Plans to offshore were dropped, while those who had already offshored started to reconsider their decisions. For some, this meant bringing customer services back in-house or using a domestic provider that offered a sense of more control. Others have looked at diversifying their outsourcing so they are not reliant on a single provider or nation.
For smaller businesses, this process can be done quickly, but larger businesses, often purchasing thousands of seats or running their own operations, take longer to transition. Combined with contract periods, this means that the trend of reshoring is likely to continue in 2021 and beyond. The Philippine BPO industry might get some benefit from this, with businesses diversifying services currently provided in other countries, but since it starts from the position of being the world leader, it is likely to be a net loser in this trend.
The rise and fall of work-from-home models
The image of call centres featuring rows and rows of agents at computers is so ingrained that many are surprised to learn that there were already a significant number of agents employed on a work-from-home basis. The pandemic had the effect of enforcing this model on many more people so services could be delivered while shutdowns were in place. Even when shutdown restrictions were relaxed, the need to prevent infection meant existing call centres could not be occupied at the same density as before.
This is not without challenges. While BPO providers in the Philippines have excellent communication infrastructure, the provision of fast, reliable internet is not consistently available in more residential parts of the country.
More importantly, there are significant confidentiality issues with many outsourcing contracts. Almost every customer service role will have some confidentiality issues, but these are particularly severe when it comes to services like finance and healthcare. Philippine call centres frequently have strict rules to ensure confidentiality, from banning the use of mobile devices to having paperless floors and close monitoring through CCTV. Many BPO providers in the Philippines have significant control of their buildings that is simply not possible with work-from-home. While it’s likely that some sort of work-from-home models will remain, not least to provide some resilience in the future, the use is limited.
The accelerated use of Artificial Intelligence (AI)
Artificial intelligence, or AI, was already being widely used by BPOs in the Philippines, but the COVID-19 pandemic has provided added pressure for vendors to increase its use in their services.
Many people will be unaware of how integral AI is to customer service and perhaps unaware that on most, if not all, of the customer service calls they make, the human agent will have an AI assistant. From providing customer information to using voice recognition to identify solutions, AI will help the human agent. Used well, it will reduce call times, increase first-time resolutions, and improve job satisfaction for agents.
Together these will help to reduce costs and potentially manpower, helping BPO providers in the Philippines maintain their competitive edge.