I went looking for places to outsource to in the Philippines, here’s how it went

In what was an extremely eye-opening experience I headed off to the Philippines to identify potential outsourcing partners. I was expecting it to be a pretty standard sort of experience. Book a few appointments, assess my options and make a decision. I booked appointments in Manila, Baguio City and Cebu. My reason for these choices is that they have large call centre operations, world class internet connectivity and reliable electricity.

Here’s the problem though. I was only looking for one or two seats. To even book meetings with the larger operators was virtually impossible. The meetings I did get with the larger companies were just sales pitches, no flexibility offered and they made it very clear to me that growing companies were not their target market. At first I became disheartened as first my meetings in Baguio City and then my appointments in Manila bore no fruit.

I did get to tour a few larger facilities though. I was actually pretty unimpressed. The floors look like holding pens full of humanoid robots with headsets on. Everything is scripted and it’s all a numbers game. Having happy, productive staff is important to me, especially so when they are in a customer service role. If they’re not happy and comfortable in their role (no matter if that role is in Australia, The Philippines or anywhere else in the world) then they’re not going to take good care of my customers. If my customers aren’t happy then my business is at risk.

By the time I was preparing to board my flight to Cebu I was disheartened, disappointed and not exactly full of hope that I was going to find what I was looking for. That said the trip was all booked, the appointments were set and I figured at the very least I would gain more insights into how not to do outsourcing effectively.

My first meeting was with a smaller, generalist outsourcing company at the Cebu City IT Park. The facilities at the IT Park itself are world-class. I was instantly impressed.

As we toured the office space I walked passed the other companies sharing the floor. More rooms full of robots. Out the window of the lunchroom: the logo of a huge Australian telco. I was, once again, losing hope.

What was different about this particular meeting though was that it was to last a couple of days, not 90 minutes. The plan was for me to actually get in and interview some staff, experience the operation to the fullest and gain a real understanding of how the business process outsourcing (BPO) industry works in the Philippines. Something that the other companies I had connected with did not give me the chance to do.

Over the course of the next few days I interviewed about 30 candidates with the owner. Spent time with other members of his team and was extremely impressed to have several candid conversations about what fish hooks to expect in the process.

I learned a lot. Here are a few of the major takeaways:

The staff at the larger operations really do feel like robots

Almost without fail when I was interviewing someone who was currently working for, or had recently left one of the big companies was that their reason for leaving, or wanting to leave, is that they did not enjoy the experience of working in that environment. Yes, there are a lot of operators that do actually care about their teams but there are also a lot that don’t.

Here’s a story that was recounted to me by one candidate that we interviewed: He was on a customer support contract for a large American telephone company. His target was to finish every single call within 3 minutes. The content of these calls was often quite technical help with smart phones. He had a real heart for customer service and, while he did his best to hit the target, he also did everything he could to actually help the customer on the phone.

In spite of his best efforts, 3 months in he was hauled into the office by his manager. His target per call was out by 30 seconds. That extra half minute he’d spent trying to actually deliver on his promises cost him his job. As he was still within his first 5 months of employment he was summarily dismissed.

What on earth is an ‘endo’?

Another thing that came up very regularly in those conversations with candidates was the term ‘endo’. It is short for end of contract and it goes back to that 5 month thing I mentioned in the last paragraph.

Under Philippine labour law an employee is regularised until they have been in the job for six months. What regularisation means in this context is access to employee benefits like healthcare, annual bonuses and various other things that employers in the Philippines are legally obligated to provide.

I would estimate that 70% of the candidates we interviewed over that two day period were there because they had been ‘endod’. Regularised employees cost businesses more to employ and, with so many people looking for work the call centre industry has a reputation for abusing this loophole in order to save money.

To me this is counter-intuitive as a business owner. Surely if you’re going to invest time and effort into training someone, develop a relationship with them and entrust them with a role in your business it makes sense to retain that knowledge in the business. Additionally if you’ve got a room full of 1000 people, all of whom know they’ve got 5 months to live (so-to-speak) then there’s going to be no loyalty. Nor are they going to care about the work they do. By 3 months in they’ll be taking sickies to go to interviews.

In my 20 years of, first business management and then business ownership experience, I’ve always held staff retention as one of the most important metrics. Especially in customer focused environments. They are not an expense but an investment.

Cookie cutter management

The other problem, and this is obviously related in no small way to the endo situation. Is that when staff members join these larger operations they get assigned a number, assigned a desk and given a procedures manual plus, perhaps a few hours of seminars. The lack of individual attention once again results in staff members feeling disconnected from the business.

Then there are the targets. Everything is a metric in those larger operations. One big numbers game. I am a fan of setting targets that challenge team members to push themselves but if they don’t hit those numbers, instead of just sacking them, I look at three things:

  • Did I set my targets too high.
  • Is there an issue with training for the team member in question.
  • If it is not one of those things then why?

How do I get the answers to these questions. Performance review and management. That is to say I engage with the staff member in question and ask why instead of just shuffling them loose and calling HR to send me another robot.

This results in team members that engage, strive to improve and, most importantly of all, are comfortable communicating with me when things arise. The end result of that is better customer service, a more highly skilled workforce and staff retention.

So what was the result of my trip to South East Asia?

I hired that small, generalist BPO. With the intention for both companies to grow together and work together to achieve an effective, well-rounded work force that looks after the company, the management team and, most importantly of all, the customers.

There is a huge gap in the market when it comes to outsourcing. That is smaller companies in Australia and further afield that don’t have the skills, resources or time to manage a remote team. That’s where Quotenamic comes in and why we founded it. Get in touch today if you’d like to find out more.

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