When offices were overloaded with work during the dot-com boom, outsourcing came to the rescue with a seemingly surefire way to get jobs done faster and more efficiently. For some companies, however, what worked in theory didn't always work in reality. Outsourcing has become a staffing option that many corporations have tried, and that some have simply refused to continue, according to Michael Conley, vice president of key accounts for the Forsythe Solutions Group.
The tables have turned in the HR outsourcing market. At least that was the viewpoint of a number of HR outsourcing buyers who attended HRO World Europe 2006 this month in Brussels, Belgium. Just a year ago, HRO providers were tripping over themselves to get buyers' business. Today, those providers of HR outsourcing services are much pickier about whom they take on as clients, says Sunita Malhotra, human resources director for Europe at Electrolux Home Products.
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As India moves more up-market in outsourcing, the Philippines is fast gaining a share of the customer-contact call center business. It might be low-end and low-margin, but for the Philippines it has been an employment boon. Evidence of that sharp growth is on display early in the evening in the lobby of the RCBC Plaza building in Makati City, as groups of prosperous-looking young men and women, Starbucks coffees and McDonald's bags in hand, head to work at more than a dozen call centers serving the United States, just as everyone else is heading home.
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We’ve heard of India being a superpower in outsourcing. The Philippines is known for being the preferred destination for customer care centers. China is on its way and has been working on getting more outsourced work into their country. As we all know, these are countries that U.S. companies have established their presence and each country has its own strength and expertise. So, where to next?
We are seeing growth in other parts of the world, particularly in EMEA countries.
Egypt is a place where we expect French speaking customer service agents. South Africa can be the next destination for UK customers. Latin America is being favored for Spanish based accounts.
This is interesting because with the endless battle and issue of teaching local folks another language, companies are getting smarter. They are open to giving work to people who can talk in their native language. This alleviates the extra cost of accent or language training and focus on call resolution, ergo good customer experience.
Countries in Central and Eastern Europe as well as the Middle East and Africa -- the EMEA market, in other words -- are poised to become the next hot spots of contact center outsourcing activities, according to projections recently published by Frost & Sullivan. The market earned revenues of US$11.2 billion in 2006, according to the consulting firm. By 2012, that number is estimated to reach $16 billion. The growth of the Tunisia and South Africa markets can be likened to Ireland in the 1980s.
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Cyber City Inc., the pioneering call center firm at the Clark Special Economic Zone (CSEZ), has asked the government and the Business Processing Association of the Philippines (BPA/P) to stop pirating of workers. – Reynaldo G. Navales, Sun Star Pampanga, Philippines.
At last a plea to curb poaching! Competition is tougher and centers will do anything just to get the staff they need to meet their client’s demand. The most common strategy would be offering a signing bonus on top of the expected increase in salary from the previous employer.
This not only hurts a center’s bottom line but is the root cause of an increase in attrition in the country. This is not good news. If the number gets even bigger, this will turn off new investors and could decrease the demand for outsourced work.
Labor market analysis needs to be part of the decision process on whether or where to locate or terminate operations around the globe. Managers of globalized or labor-intensive operations such as software development, customer service and back office support should be able to guide labor market analysis activities and understand their results. The exact method for conducting a labor market analysis should be determined according to the types of results that the analysis is designed to produce.
Outsourcing and the establishment of captive customer service operations offshore depend on labor markets to supply qualified talent at affordable rates. Without appropriate personnel, nothing is possible. The globalization of information technology and IT-enabled services is leading to the globalization of labor markets. Labor market analysis is an important but often neglected ingredient for successfully globalizing production and service operations.
Business process outsourcing holds great promise for the mortgage servicing sector. Whether working with onshore or offshore companies, a wide variety of third-party service providers are leveraging economies of scale and narrowly scoped domain expertise to bring more value at a lower cost than most companies can achieve internally. Is BPO right for your organization? It's a question executives across the industry have been thinking about and trying to answer for their companies.