The U.S. political witching hour won’t affect Philippine IT-BPO

Michael Alan Hamlin

Posted on February 23, 2012

Facing an uphill battle for reelection to the U.S. House of Representatives from the 1st District of New York, Congressman Tim Bishop filed the “U.S. Call Center and Consumer Protection Act” last November. Mr. Bishop’s opponent is the founder of Office Tiger, a pioneer third-party business process outsourcing (BPO) services provider. Office Tiger was acquired by R.R. Donnelley in 2006, making Randy Altschuler a very rich man.

Mr. Altschuler narrowly lost his first challenge to Mr. Bishop in 2010, despite his outsourcing history, and apparently feels that 2012 will be his year. Mr. Bishop is taking the threat Mr. Altschuler poses seriously. Closely identified with the Communications Workers of America (CWA)—a union representing somewhere around 700,000 workers in telecommunications, media, public service, healthcare, and other industries in the U.S.—Mr. Bishop claims its members unanimously support his bill—and him.

If enacted into law, the act will require call centers agents and other IT-BPO workers responding to calls from U.S. customers to identify their location. If the customer requests that they be transferred to a U.S.-based employee, the agent working offshore must do so. You have to wonder, though, how many U.S. customers are going to request that their call be transferred from a polite, patient Filipino to an American call center agent.

That’s not all Mr. Bishop’s bill threatens, however. According to Mr. Bishop’s website, it will also require the U.S. Department of Labor to track firms that move call center jobs overseas. Firms that do so will be ineligible for direct or indirect federal loans or loan guarantees for five years. The website doesn’t say how many U.S. call centers might be affected by this provision. That may be because most large U.S. firms—unless they are bankrupt—don’t rely on the U.S. government for operating and development capital.

They do avail of investment incentives offered by local governments in the U.S. That’s largely irrelevant to Mr. Bishop’s bill, but he accuses call center companies of availing of such incentives “only to offshore their operations a short time later and leave local communities devastated and still paying the bill.” According to CWA, “total customer/call center employment has dropped from 5.2 million in 2006 to 4.7 billion in 2010,” a loss of about 500,000 jobs.

That’s about 100,000 more call center jobs lost than all the call center jobs in the Philippines (406,000 in 2011), according to data provided by the Contact Center Association of the Philippines. And since the Philippines has more call center agents than its nearest rival, India, the world’s two largest offshore providers of call center services have considerably less call center employees than the U.S., despite gradual decline in U.S. employment over five years.

With about 20% of the call center jobs Mr. Bishop and CWA claim the U.S. has and erosion of just 10% of U.S. jobs during the worst financial debacle ever, it’s fair for the Philippines and India to ask what the big beef is. And, U.S. unemployment has fallen almost a full percentage point since August last year to 8.3% in January. While that’s higher than it should be, the U.S. economy is steadily adding jobs, and doing so across all sectors and most demographics.

Call center executives tell me that while some local call center jobs have disappeared in the U.S., anyone who seriously wants work as a call center agent and has a reasonable employment history can find work. Mr. Bishop and CWA are silent on this point, as well as whether the decline in jobs is due primarily to jobs being purposely shifted overseas or American call center agents finding alternative opportunities at home.

When a U.S. call center does pull out of a local facility, the number of jobs at stake is relatively small. Unlike the massive call centers the industry builds in the Philippines that are work homes to thousands of employees, most U.S. centers employ a few hundred, at most, individuals. That’s because these companies can’t find enough workers to fill large facilities. So they look overseas to the Philippines and India.

Not many in the U.S. are paying much attention to Mr. Bishop, his bill, or his bid for re-election. After all, if he can’t do a better job identifying real issues that fundamentally impact his New York constituency, why bother with him? It’s safe to say that not many in Mr. Bishop’s constituency are dreaming of a call center job. Meanwhile, his opponent, Mr. Altschuler is encouraging New York’s 1st District to dream about creating new jobs and new opportunities.

Preserving jobs versus job creation. I suspect New York voters know which political promise holds the most potential. And here in the Philippines, we have a lot more important things to do than worry about Mr. Bishop’s self-serving bill.

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand. Write him at mahamlin@teamasia.com and follow him on TwitterFacebook and LinkedIn. Copyright © 2011 Michael Alan Hamlin. All Rights Reserved.)

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