Monday, July 17, 2006

Call centers are lazy employers

THE call center industry here in the Philippines is one damn successful business. Nowhere in the world can one find an industry growing at 60-70 percent per year in the last five-to-six years. But it’s also such a lazy employer it is now shooting itself in the foot—at least that’s the view of very perceptive industry watchers. Surely, the Philippines need more of this business, probably double or tripe its size, but if the industry players keep pirating from each other, this budding industry will end up hurting itself and the country’s prospects for a better life for many Filipinos.

It’s the only industry in the world where recruits get paid even before they start working. That’s nice really, except that they just actually hire from each other. Most call centers these days are transforming each of their staff members into petty headhunters by dangling 3,000 to 10,000 prize money for each staff recruited. And who do these people usually recruit? Their friends and former classmates who happen to work in a call center in the adjacent buildings. They even send recruiters into the foyer of each other’s buildings to distribute calling cards just in case a call center agent would be interested to transfer. At the rate they are doing that, one could actually accumulate cash and build a “career” playing rigodon with different call centers.

Certainly that is a funny story. But it’s not funny when you think of the consequences.

First, call centers are encouraging job-hopping and high attrition rates. That’s a prescription for disaster. Second, it sends the wrong message to potential investors who are thinking of investing in the Philippines. This country needs more investments and yet what these call centers have been doing is cry in public that they only have 3-8 percent hiring rates, that the attrition rate is 20 percent, that the country is now suffering from a crunch in skilled labor, that the country’s educational system is deteriorating—the list of complaints is endless.

And yet, most of these call centers must share the blame for this sorry state of affairs. By resorting to cut-throat competition in hiring, they have encouraged their workers to be footloose, nay, even to consider jobhopping as a virtue, and the traffic in jobhoppers as a lucrative sideline. Now, karma has caught up with the “pirates.”

More crucially, they hardly invest in the training of their staff. They don’t provide them career track, no employee retention plan, no long-term human resources plan. They don’t give their employees the chance to dream with them. Ask any call center agent these days if they intend to make a career out of call center work and most of them will say it’s just a temporary job for them until they find a “real job.” These people of course are in their early twenties who are still figuring out the meaning of their lives and their own places under the sun. But the real reason for their vagueness about their plans is that their employers simply look at them as a blur in the outsourcing horizon who come and will soon be gone. Getting this signal from employers, why should they then consider themselves as having a long-term stake in one call center?

The huge mistake of call centers here is that managers have simply copied the human resource strategy in the US where the bosses are resigned to the idea of losing in the afternoon the people they hired in the morning, like the mists that fade as the temperature rises. You reap what you sow.

It’s good that other cyberservices industries are wise enough to really think through, this early, their human resource strategy. Lately, we have heard about huge companies doing back office operations here that are really investing huge money to train their staff. They give them hope and let these young people dream dreams with them. Yes, some even sending their staff to take master’s degrees abroad. No wonder back-office operations businesses are currently growing like mad. In the first half of this year, about 7 out of 8 new huge investments in outsourcing in the country were into back office operations or shared services.

Of the eight new investments only one is a call center—too bad because we need more of them to create more jobs. Right now, the entire cyber services industry employs almost 200,000 people. Government hopes the industry could accumulate about a million jobs by 2010. Without new big-ticket call center projects, however, we can hardly achieve that target.

But one should not wonder for this less interests from investors to put money in call centers. In the last few months, Newsweek and Asia Times Online were quoting executives of call centers complaining about the skills crunch in the country. Surely this information has negatively affected the decision of investors to rethink setting up shop in the country.

Certainly, the complaints about the deteriorating English-language skills and the poor school system are valid. The government indeed should do something about it. But call centers should do their own homework by adopting a better human resource strategy, investing in skills training, providing career tracks for their staff, partnering with schools and universities, and looking at their employees as a precious resource. They should continue pestering the government about the investment environment but they should also exert all efforts to develop concertedly the industry’s human resource. After all, they are the ones who are going to rake in money should their operations succeed.

Call centers should stop whining and get real.

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