Economy News

BPO: PH Employees Receive Low Salaries

Cbanga360.Net - The Bicol Street Journal

Published     29 Dec , 2010  4:21 am   Updated   21 Apr , 2013 at 3:32 pm   3,567 views.

The pain and irony: Call center employees push and promote benefits and resources to online/phone customers but which their employers do not provide them. (Photo by Marya Salamat)

By Marya Salamat]

(This is the concluding part on the post about call center outsourcing in the Philippines. Read first part on this link: Call Center Employees in the PH Receive Low-End Jobs

Comparatively Low-Salary, High-Stress, Insecure Work
Despite the supposed high salaries of Filipino call center agents, they could only out-earn their American counterparts by 2037, based on a Watson-Wyatt study released last year and published by the CCAP magazine “Connect”. At that time, the salary rate hikes for the “low-cost but qualified labor” of Filipinos were rising at 9-percent on average versus 3-percent in the US.

The average basic salaries in call centers today range between P16,000 to P17,000 ($366 to $389), estimated Uligan of CCAP, in the sidelines of their annual conference this year. Uligan’s estimated average salary falls in the middle of the “P15,000 to P20,000 ($314 to $419) average starting salaries in 2009,” which then Senator Mar Roxas cited when he warned the industry against “cost-creep”, or “labor cost inflation.”

Mar Roxas, a known industry supporter since its birth and growth from his various positions in the Estrada to Arroyo administration, warned the industry last year against “pricing itself out of the market”, as the Philippines and the BPO industry then vowed to continue expanding despite or because of the financial crunch in the US and Europe.

Even as the salaries of Filipino call center employees are comparatively lower globally, since last year, the industry has taken measures to cut costs, largely through slashing its budget for salary increases, reducing paid hours such as overtime, streamlining or reducing the number of people per team – without correspondingly reducing the expected output – putting employees on extended leave or terminating employees.

Some call center companies, especially the small to medium ones with 50 to 300 seats, have also closed down as a result of the financial crisis in US and Europe, Uligan said.

The industry’s employed workforce has actually gone down from the 372,000 in 2008 to this year’s projected “growth” of 344,000 employed by year-end. The number of employed is not the only thing that has slid down.

According to a 2009 study of Watson Wyatt, a global human resources consulting firm, majority of contact centers in the Philippines decreased their original budget for salary increases for 2009 from 8.40-percent to just 5.36-percent. That was the “sharpest decline on a year-on-year basis and the lowest in more than 20 years,” noted Watson Wyatt. The cut was much lower than the Philippine’s projected national inflation of 8-percent, it added.

CCAP’s estimated average basic salaries of P16,000 to P17,000 ($366 to $389) for call center employees in 2010 may be higher than what the employees are actually getting. This reported average may only be true for those who have had at least two years’ experience and are handling more technical accounts.

For the rest who are just starting out, the salaries are much lower. A contractual call center employee in Aegis, for instance, handling a “mere local account”, receives only P9,000 ($206) a month. In a Teleperformance branch that does not regularize its employees, salaries are lower than the starting of P13,000 ($297) in other call centers.

In EILER’s survey, call centers that took advantage of the government-induced location in the “next-wave” cities of the Philippines are found to have paid their employees as low as P10,000 ($228) or less a month in 2008, when the call center boom was at its peak and the “cost-creep” in labor cost was not yet being widely aired.

CCAP’s Benedict Hernandez said locating in cities outside of the more established Metro Manila offers only “marginal advantages” such as a reduction of 10-percent or less in labor costs. But Parekh of SPi Global said places like Dumaguete and Iloilo have “great talents,” and locating there is a “great way for employers looking at managing price pressures.” He reiterated the Philippine government’s offer of 20 other Philippine cities that are “quite open for BPOs.”

So far some 70-percent to 80-percent of call center companies are estimated to be still in Metro Manila, Uligan said. Other companies prefer the “proven locations”, said Hernandez.

Salaries, it seemed, can still be controlled in proven locations as Metro Manila, despite stiff competition for ‘talents’ by call centers. Unemployment rates in the Philippines have been unprecedentedly high despite the vaunted BPOs in the past decade. There are at least 848,000 new graduates this summer seeking employment, with many aiming for call centers.

A BPO employee lamented during a Kabataan Partylist roundtable discussion that companies can bravely and easily fire employees. Its HR departments, said other long-time employees, are swimming in applications.

In a BPO company called Stellar in Metro Manila, for instance, some call center employees complained that they could not understand why their salaries amount to only P13,200 ($302) when it is supposed to be P14,00 ($320). The company gave a vague explanation that their salaries are “pro-rated.”

In other call centers, employees said they had been made to work like regular employees with peak workload during their training period, but they were only paid measly training allowances.

There are also particular work setups in some call center companies. For example at NCO, the company offered a salary amounting to P85,000 ($1,946) for 85 working days. “But you have to be young to be able to comply with the expected output and you have to be willing to work for only a three-month program duration,” said a contact center employee. “If you are a project-based employee, you’re like a willing victim,” she concluded.

Allow BPO Workers to Form Unions and Advocacy Groups
Health issues being faced by BPO workers are also notable, according to EILER. Different institutions have cited the health risks of working in BPOs especially during graveyard shifts. EILER for one, noted how female agents usually suffer urinary tract infections due to the short break allowed for personal necessities— only10 minutes per day.

The International Labor Organization (ILO) said night shift call-center agents are prone to sleep disorders, fatigue, eye strain, neck, shoulder and back pains, and voice problems, work stress-induced by harassment from irate clients, excessive and tedious workload, performance demands, monotony, and regular night work.

As a labor advocate, Escresa-Colina is critical of the lack of unions and the reported outright ban in joining unions in BPOs. No BPO company has had a union yet, Escresa noted, adding that it has been reported to them that BPO employees are being discouraged by the management from joining or forming unions during their trainings.

In some companies, a no-union provision is even clearly stipulated in pre-employment contracts, said EILER. “This is a direct violation of our constitution,” Escresa said.

“BPO companies boast of having the ‘best HR practices’ as their model in managing industrial relations. It should be reiterated that no HR practice can substitute the role of unions in upholding and promoting workers rights inside the workplace. Unions are part of our democratic institutions. It plays a crucial role in achieving people-oriented development. To show the world that the Philippines is really the leader for the global BPO industry, we should show as well that we respect and uphold the rights of BPO workers in our country,” Escresa-Colina said.

EILER urged the government to work in ensuring that no rights of BPO workers are being violated or compromised. It warned that if the dismal working conditions prevailing in BPO companies will not be seriously addressed, the Philippines will be the next modern-day sweatshop for the services sector.

The Kabataan Partylist, for its part, urged call center agents to form “advocacy groups who will constantly get involved in various activities to promote the rights and welfare of call center agents in their workplaces and even among other companies.” Palatino said that “It is only through the collective action of BPO and call center employees that we could ensure a law protecting them would be enacted and implemented.”


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4 Responses

  1. Jap Adupe says:

    Bottomline, BPO is more of delivering a desirable customer service to clients and profit to operators/owners and less if not minimal benefit to employees. The government (and its agencies) can be viewed as participants in this denial of benefit(s).

  2. Jap Adupe says:

    A Sutherland global services support technician in Rochester, NY, noted that “$20,000 a year salary is not enough to raise a family.” What about a BPO employee at the Sutherland site in Camarines Sur IT park? Just for comparison, multiply USD20,000 by the current local exchange rate. Stunning salary US counterparts receive, considering they are in the low rank and file of the organization!!!

  3. Iron Face says:

    There is A HIDDEN REALITY in th field of BPO. Filipinos having not enough benefits like hazard pay since they work at night considering the dangers they face commuting to work. “slaving the night away” just to survive. Unfortunately, the BPO employees doesn’t have a representative to protect their rights as a employee and as a individual. Many human rights and labor violations heard and unheard (and have proven facts) have been talked about but leadership chose to be deaf and blind in order to keep the business going when they know the fact that the “work horses” that they employ as frontliners are being treated as sacrificial lambs and scapegoats in the process. Some companies who claim integrity in their process values and work ethics had more violations that can be spoken of. HR and managers of these companies have been observed in connivance in committing these violations even if the employee has guts to question, his/her efforts are worthless. Since the law has not been created or if there is one, not comprehensive enough to define these unethical/unfair/unacceptable process/behavior of these companies and if these will continue to be unchecked/unchallenged, this will continue.