Call Center Case Study for a Company in Israel

Background information

The Philippines is still considered by the west as a rapidly growing 3rd world country. Financial experts however state that Manila will be the new financial capital in years to come. The Philippines has a population of approximately 100 million people. The largest city, Manila, is the home for approximately 12 million people. Most of the population in the Philippines is relatively poor, with a high level of inequality. Average call center salaries range from 15k to 30k PHP (Philippine pesos) per month (25-30k PHP being for management level). In Israeli shekels, this equates to approximately 1200-2500 ILS/month. Generally, all call center staff in the Philippines are selected only from those who have a university/college degree, are fluent in English and computer literate. Unemployment figures are high and competition for job placements is extreme.

Why the Philippines

It’s a known fact that in the next year or so around 70% of call centers will re-locate from India to the Philippines. More and more Israeli outsourcing companies are migrating their call center operations to the Philippines and now Clark and Manila are full of Israeli owned Binary Options, Forex and various online gaming call centers. The key reasons for this mass migration are:

• Language – English is the 2nd language spoken in the Philippines. Most of the younger generation is fluent in English and, unlike India, the Filipino accent is subtle and soft on the ear and sometimes even slightly American, which works perfectly when working with US and UK customers.
• Salaries – as mentioned above, the salaries for highly educated and qualified staff is more than 50% less than what it would cost in Israel and 3 times less than in the UK or the US.
• Recruitment – there is a huge number of unemployed, skilled and educated people in Philippines. Finding and choosing the right people is not very hard and employers can be as selective as they wish. Salespeople in the Philippines are usually not as confident or aggressive as western salespeople initially, but are more easily trained and nurtured into their position, making them just as good, if not better, than any western salesperson and a lot less problematic for HRM (Human Resource Management). In an observation, it was noted that once the training is complete, Filipino salespeople outperform both American and Israeli salespeople, doing the same job and under the same conditions.
• Rent – renting an office space or a building in the Philippines can be as little as 20-30k PHP/month (1600-2500 ILS/month) for a small office that can accommodate 15-20 people, in Clark Freeport (tax free zone).
• Running costs – electricity, water and gas are all fully operational, continuously supplied and as reliable as most western countries. Energy bills are much lower than in the west. To compare with Israel, the saving on monthly bills can be as high as 50%.
• Availability of call centers – Clark and Manila have numerous fully serviced call centers, ready to rent seats, with in-house IT support, 24/7 security, camera (with audio) installed for management surveillance, proxy networks and everything else you may need for a quick start-up. The setup options for a call center are broad and start-up duration and costs are minimal.
• Tax free zone (Clark Free Port area) – 5% TAX ONLY. Clark Freeport zone is almost a tax-free heaven. Firms located inside this zone are exempt from all local and national taxes, paying instead a fixed fee of five percent (5%) of gross income earned only. Most businesses is this zone pay their staff and overheads in cash, making their tax reach closer to 0%.
• Climate and politics – The Philippines is generally considered a stable and liberal country, with a democratic government system. The climate (in Manila and Clark) is tropical, which means hot, with a heavy rain season spanning a few months. It’s generally stable with no major natural disaster risks, making it a very favorable place for businesses looking for security and a long term investment.

Call center costs and services

Setting up a call center from scratch would be the cheapest option but would take approximately 3-6 months to get running. For a quick start-up, it would be more advisable to rent a space from an outsourcing company, located in Clark Freeport, which has a fully serviced call center already setup and ready to go.

Operational requirements

• Recruitment (including a supervisor that will manage the shifts)
• Staff salaries
• Staff benefits
• IT/Tech support
• 24/7 camera access
• 24/7 security
• Call recording
• Access to floor
• The recruitment will be performed in conjunction with the client, who will choose the ones suitable for their needs.
• VOIP – softphone service, depending on usage.

Terms of contract

Usual terms of contract to set up a fully serviced operational call center is a one month notice and month’s deposit, with a provisional contract for three months and then, if the client is satisfied, a six months to one year contract is optional.