Obama and the Call Center Industry

Since the election of Barack Obama as the next President of the United States, much talk has been going around about his policies and stand on outsourcing among call center employees. My discussions with several people working in the BPO and contact center companies have been mixed.

I think he might have been misunderstood in his statements where he said he’s going to take some of the outsource jobs back to America.

What Obama might do is give some tax breaks or tax incentives for companies if they retain employees in the US. That way, US companies might be persuaded to keep jobs in America rather than offshore.
The ratio between the salary of a call center employee in the US compared to the Philippines is in the magnitude of 6 to 10 times. So for every call center employee replaced in the US, at least 6 new hires are made here. I can’t imagine any sort of tax incentive that can offset that.
Companies tend to outsource the entry-level to mid-level employees and retain the top managers and executives in the US. If there are shifts in this level, this is mostly with the offices in India where they still maintain the biggest operation.
China is the biggest source of blue collar jobs for American companies. Most of the products of the big companies come from China — P&G, Nestle, Apple, Dell, etc.
Obama didn’t specifically say it would the call center industry. He might have also meant the manufacturing or the blue collar jobs. There are around 100,000 call center employees in the Philippines (outsourced by the US, Canada and Europe). Compare that to the millions of laborers outsourced from China.

I think it would be safe to say that there won’t be any hiring issues for call centers in the Philippines once the Obama administration kicks in.

Abe Olandres

Abe is the founder and Editor-in-Chief of YugaTech with over 20 years of experience in the technology industry. He is one of the pioneers of blogging in the country and considered by many as the Father of Tech Blogging in the Philippines. He is also a technology consultant, a tech columnist with several national publications, resource speaker and mentor/advisor to several start-up companies.

https://www.yugatech.com

26 Comments

Andre Marcelo-Tanner says:

16 years ago

maybe whatever changes will cause some companies to hire more in the US, but it wont change the fact that lower labor costs exist in 3rd world countries
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Ferdielicious says:

16 years ago

Outsourcing will never stop as long as their are clients from the US who’ll still go for cheap labor here in the country. There will always be means for outsourcing, especially here in the Philippines.
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Men says:

16 years ago

aw, if that would happens, business here and employment will go down..
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issai says:

16 years ago

i think he’s thinking about the manufacturing industry. i’m not so sure though. he’s trying to save the US car industry, but US cars just suck. the US car companies might just die painful death. japanese cars are still better.

fred is right, outsourcing won’t stop. it might slow down but it won’t stop. but i believe obama will make it easier for tech people to get h1b visa. one reason why they outsource is that there’s a few qualified talent. one reason why there’s a lot of engineers from india, china and canada coming to the US. but in this recession, that might change.
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Kuya Kevin says:

16 years ago

I hope you are right. This was one of my many concerns about him–that he will negatively impact the call center industry in the Philippines.

That and the fact that he’s a radically pro-abortion socialist. :)
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issai says:

16 years ago

i find nothing wrong with pro-abortion socialist. his values are not your values. the 700 billion bailout is socialist, why don’t they just let the banks and auto industry die. capitalism is a system with no safety net, that’s why the government intervened. now tell me that bush isn’t socialist either. what does it have to do with outsourcing? if you have “uber l33t skillz” you have nothing to worry about my dear friend. the philippine job industry is not just about call centers.

oh yeah, i support pro-choice.
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Kevin says:

16 years ago

Obama doesn’t know what he is talking about. A lot of the promises like bring back jobs to the US via impeding the spread of call centers and BPOs isn’t going to work or happen. There are just too many benefits and companies are very well-established.

Obama’s tax breaks won’t happen either, even if for just the call centers or BPOs. What kind of president in his right mind cuts taxes in an economic downturn and in the face trillion dollar debt?
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issai says:

16 years ago

well, he’s all you got. he will be president. sorry dude. tough.
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issai says:

16 years ago

lol i think i’m trolling yuga’s post. i’m just trying to be optimistic in these bad times. no use crying over spilled milk. sorry dudes, nothing personal. i just hate pessimism during these times.
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autocad tutorial says:

16 years ago

These are all speculation. Just wait and see what will be the “first dog” for his two kids. Mexican hairless??
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Kuya Kevin says:

16 years ago

Issai,

I also opposed the bailout. I think it is ridiculous, and I think businesses should be allowed to fail if they can’t make a profit (including the American auto industry).

I’m not worried for my own sake. I don’t work in the call center industry.

Having said all of this, I believe the American economy will survive.
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blankPixels says:

16 years ago

I’ve been working for call centers for more than 4 years now. There are a lot of concerns going around here regarding Obama’s win. Clients and managers from major companies in the US (mostly IT) expressed that these tax breaks that Obama is offering won’t change anything about their decision to outsource here in the Philippines.

Why? Because they get better people here – college graduates who are highly motivated to perform their jobs. Call center employees here seriously consider that there’s a career in this industry. A client even said that in the US, people tend to think about working in a call center as their last resort.

So, we (call center employees) shouldn’t really concern ourselves about Obama’s win as US companies who outsource will make more profit in outsourcing than from any tax breaks or incentives the new president can offer.
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Kuya Kevin says:

16 years ago

And by the way, America was not built on socialism.
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minime says:

16 years ago

test
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minime says:

16 years ago

lets just hope he has better plans on outsourcing. This is already the future of employment :D
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Butch says:

16 years ago

Maybe this forum post from Pinoy Exchange will help:

http://www.pinoyexchange.com/forums/showthread.php?t=375790
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kc says:

16 years ago

Are you kidding me? More and more companies in teh US are realizing that even though they save a lot of money with the payroll, it costs them the customer. Here in teh US companies are boasting of the fact that they have call centers located in the US. More and more customers are complaining about their sensitive information being sent overseas to god knows who and where. Bet on your call center job not being available anytime in the future. Do a search on the internet and you’ll see how many are bringing them back to the US. AT&T, Sallie Mae, US Airways, United Airlines just to name a few. How would you like to contact an american guy who didnt speak your language very well or was hard to understand just to get something done. I am american and I’ve worked in two filipino call centers both with mci and apple as an agent and a qa so I know what i’m talking about.
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abhe says:

16 years ago

Nice post.
Visit http://www.callcentersphilippines.ph for more information
about call center.
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abhe says:

16 years ago

Nice post.
Visit http://www.callcentersphilippines.com.ph for more information
about call center.
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contact center Philippines says:

15 years ago

Thanks for the post, though I think that the US government might start implementing tighter rules about outsourcing soon. According to the news, New York Senator Charles Schumer wants to pass a law that will tax all of US calls that are transferred to foreign call center partners. The law will also require agents to declare in which country they are based.
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Cookie Monster says:

14 years ago

http://indianalawblog.com/archives/2009/05/index.html
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call center services philippines says:

14 years ago

Those words from President Obama was good to hear from people who are hopeful of pursuing their career in life. Even though the president didn’t said that it is a call center industry, still it would give chance others to work. Anyway, thanks for the post.
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13 years ago

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12 years ago

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