Why Call Centers Are NOT Investing in Davao

Dec. 07, 2006

The Davao City Chamber of Commerce and Industry has decried the practice of call-center companies to recruit call-center agents from Davao City for their branches in Cebu or elsewhere. The chamber’s Andre Fornier had a mouthful to say about the matter:

“Cebu is bragging that they have enough call center agents, but most of their agents and also Manila-based call center agents came from Davao. We will not support call centers which are only making Davao City as a recruitment ground. Of course we cannot stop them from doing so, we have no law for that, but we will not encourage our people to be a call center agent in Manila or in Cebu,” he said.

But are these call-center companies really the problem?

Fornier said these companies should put up their offices in Davao but that so far only two, according to him, have done so while the rest have failed to deliver on their promise to invest in Davao. “Call centers in Manila have been promising for so long to open call centers here, but after they get their agents from here, they go back to Manila and forget their promise,” Fornier said.

Fornier insists that it is not so much that Davao lacks the facilities or infrastructure to host call-center companies; he says Davao is comparable to Cebu in this regard. Whatever it is, these companies probably thought that making Davao a recruitment ground is more sensible, investment-wise. Perhaps these companies figured that, instead of spending on bricks-and-mortars offices, they’d save more money if they just recruited from the provinces.

This, however, completely undermines what has been touted as the industry’s greatest contributions to the economy — to spread the wealth of the call-center industry to the provinces and to generate jobs in these places. Of course, call centers have been put up in the provinces but if this recruitment trend continues — and it looks like it will, considering the active recruitment by these companies in such areas as Davao and Cagayan de Oro — there may come a time that the companies will find out that, in the end, it might be cheaper to do business in major urban areas such as Cebu and Manila. The signs, as this issue suggests, already point to that.

Perhaps one factor that these businesses are considering is the labor force in these provinces. Considering the fact that these companies only hire between 5 and 10 percent of those who apply as call-center agents, mainly because of poor English skills, it doesn’t make sense to spend millions of pesos on a call-center office, only to find out later that the labor market cannot supply the demand. Thus, it would make better sense for them to just select the creme de la creme of such areas as Davao.

These companies, like any other businesses, don’t like to venture into areas that have limited infrastructure, which is still common in the provinces, and with questionable sustainability as far as labor supply is concerned. They cannot be expected to build these infrastructure requirements. Somebody else — in this case, the government — must build it and then they will come. They cannot be expected to improve the English skills of the labor force — that is the duty of the government and the education system.

The challenge, therefore, lies in the local governments, to make sure that they meet the requirements for an industry that is highly dependent on digital technology and superb manpower. It’s pointless to rail against these companies and castigate them for not investing in Davao. There’s a reason why they don’t. As the chamber itself should know, the bottomline is always whether they can get maximum returns on their investments. If they can’t, why bother? (Carlos H. Conde/davaotoday.com)

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