Those of you who happened to read my very first column this semester may remember a reference made to Indian call centers as the most common point of contact between the average American and the world’s largest democracy. I wrote that India’s call centers have changed its international image and given employment opportunities to many people there. It is perhaps fitting that, just in time for my final column of the semester, events necessitate a re-examination of outsourcing in today’s world and what it means for countries on both ends of this phenomenon.
Although India may still be the quintessential image of the call-center country, in reality, it has been quietly overtaken by a lesser-known call center hub: the Philippines. The New York Times published an article this week highlighting the Philippines’ takeover as the king (or queen) of call centers — the article has now been widely reprinted in the Indian press and paraphrased among Filipino newspapers. According to the statistics given in the article, the Philippines currently outnumbers India by roughly 50,000 call center workers.
The 400,000 Filipino call center workers make up 4.3 percent of their country’s population. For India, with its significantly larger population of 1.1 billion, a difference of 50,000 workers means much less than it does in the Philippines. After doing the math, call-center workers make up just 0.3 percent of India’s population.
While this shift didn’t just materialize over the Thanksgiving break, it still represents a relatively rapid change. The number of call-center workers in the Philippines has risen by 100,000 in the past year alone, which is especially striking since, at the beginning of the decade, most industry analysts didn’t think the country was capable of maintaining effective call centers. There is a reason India is frequently thought of as the back office of America: Its powerful combination of educated, urban young people and low wages came first. But the passing of the call center torch indicates a shift in these two countries as well as the changing nature of customer demand.
What do Americans want on the other end of the phone? Generally, they want someone who speaks English, is polite, has basic knowledge of American culture and values and is informed enough to answer questions.
The shift toward the Philippines indicates that general English-speaking ability is simply not enough. The fact that Filipinos speak with American English, whereas Indians use British English, has become a major factor encouraging companies to move further east. In addition, Filipinos generally begin English instruction earlier in their school years and are described by companies as having a subtler accent. Another reason for the shift is that Filipinos are more steeped in American culture than Indians. Government-sponsored call centers and subsidized training programs have helped the Philippines take advantage of these emerging advantages. The fact that the call-center industry is now a few decades old is not inconsequential; the time it has taken for the industry to develop has clarified for companies what English-speaking clients really want on the receiving line.
For the Philippines, the time is now to capitalize on the country’s new role. There, an increase in call-center jobs affects a much larger percentage of the population than the same increase would in India. Filipino wages don’t necessarily have to be as low as Indian wages; companies are willing to pay more for American English. However, as the Filipino peso gains against the American dollar, call centers run the risk of losing their appeal.
For India, the prognosis is mixed. On one hand, the loss of call-center employement to the Philippines is related to India’s lack of quality urban infrastructure. On the other hand, India can be seen as moving on to bigger and better things. There are now Indian companies that outsource to the Philippines, and — excluding call centers — India still supplies a much larger portion of business process outsourcing than the Philippines does. Perhaps the shift actually indicates that India is trending toward eventually becoming an outsourcer rather than the outsourced, but this can only be proven with time.
And for American companies, the news comes as a signal that seemingly minute differences — British versus American English, for example — have bearing. The outsourcing industry, by definition, connects countries of all different incomes and people of all different cultures. It exposes Americans to those different from themselves but at the same time strives to cover up those differences. When it comes down to it, does an American just want an American on the other end of the line?
Sarah Stodder is a senior in the School of Foreign Service. AN INTERNATIONAL DEVELOPMENT appears every other Friday.
