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Contact Center Outsourcing Companies Bet On the Philippines this 2011

Jan. 10, 2011 8:53 PM ETADP, ACN, CVG
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.
By Audrey B.

Contact center outsourcing continues on its path of growth with the entry of 2011.  Considering that the Philippines currently ranks first in terms of revenues in the call center outsourcing space according to forecasts by the Everest Group, the country has proven that it is well on its way in further improving its lot in the industry with numerous companies betting on the country for expansion opportunities this 2011.

Before the year 2010 ended, companies Automatic Data Processing (ADP) (NASDAQ:ADP), Convergys (NYSE:CVG), Aegis PeopleSupport and Accenture (NYSE:ACN) have all either expanded or have announced plans of expansions of their operations in the Philippines. ADP opened its first operations facility in the Philippines on the 3rd of December 2010, an expansion that, according to company CIO Michael Capone, was conceptualized back in 2009.  During the company’s first week of operations as a human resources solutions provider, the company reported an employee base of 115 people with 300 prospective employees yet to hire.

Meanwhile, Cincinnati based Convergys announced on the 13th of December that aside from the company hitting its employee target of 23,000 in the country, the company also announced that since the company opened its newest call center facility in Muntinlupa city, they will be adding 2,400 more employees with the newest center accommodating 1,200 people from the region.  According to Marife Zamora, country manager for Convergys Philippines, the decision to open the new facility and to expand their Philippine base is due to, “significant and continuing client demand for the very high-quality customer service.”

Outsourcing firm Aegis PeopleSupport on the other hand also announced expansion plans with the company seeking to shift company facilities from rented to company-owned buildings within the country.  The transfer will be undergone throughout 2011, alongside employee expansions of up to 1,200 people.  In a press briefing, company president Rainerio Borja commented that, “[Aegis PeopleSupport’s] strategy is shifting from leasing to owning. Now that we’re privately owned [and no longer listed in the United States stock exchange], the mindset is different and more entrepreneurial.”  He further added that the company is still currently looking for other sites in Makati city to open a new facility there as well.

Lastly, consulting and outsourcing company Accenture also announced expansion plans, with the company announcing that it will be increasing employee headcount in the country by as much as 25,000 by August 2011.  The company currently boasts of a 20,000 strong workforce with numerous facilities in Metro Manila and Cebu city, with newly opened offices in Taguig city and Quezon city.

With numerous companies planning expansions within the country, estimates by the country’s Department of Labor and Employment see that the country will enjoy at least84,000 new jobs in the business process outsourcing field.  For 2010, 70% of business process outsourcing revenues and employment in the country were attributed to contact center outsourcing services.

The Philippines this 2011 continues on its path to becoming, what the country’s Department of Trade and Industry calls the “Call Center Capital of the World”, with outsourcing companies, notably major players in the field, betting on the country’s resources to further expand, the Philippines might just achieve the title this year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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