- The Philippines is the world’s call center capital
- Job loss feared due to AI, but labor issues persist
- BPO sector proposes measures to upskill workers
MANILA (Thomson Reuters Foundation) — Mylene Cabalona has been taking calls for foreign companies from the Philippines since 2010, the same year when the country overtook India to become the world’s call center capital of the world, employing more than half a million people.
Since then, Cabalona has seen business process outsourcing (BPO) become the largest private sector job provider in the Philippines, now employing some 1.3 million people.
The sector has faced many challenges — from a lack of workers’ rights, to occupational health risks — but now many fear they could lose their jobs altogether due to artificial intelligence.
“Multinational companies came here because of our skill in customer care,” she told the Thomson Reuters Foundation. “And that’s the first to be displaced by AI.”
Along with remittances from Filipinos working abroad, BPO is one of the main engines of the Philippines economy, contributing around $30 billion a year.
The growth of AI creates demand for some new jobs such as AI trainers or content moderators, but could render thousands of low-skilled jobs in call centers obsolete. The government plans to address the problem by retraining workers to work with AI.
But for Cabalona, who also leads the labor association BPO Industry Employees’ Network (BIEN), the promise of upskilling workers to tackle the challenge of AI should go hand-in-hand with resolving deep-seated issues such as lack of labor rights within the industry.
Are call centers ready for AI?
More than half of 60 companies surveyed this year by the IT and Business Process Association of the Philippines (IBPAP) said they were “actively working” on integrating AI into their workflows.
Ten percent of the companies said they had fully implemented AI technology, with customer service or support services, data entry and processing, and quality assurance roles most impacted.
While investing in AI tools is not cheap, industry experts foresee significant cost savings by automating BPO jobs.
But it is not without its issues. David Sudolsky, CEO of Boldr, an outsourcing company with offices in the Philippines, South Africa, Mexico and Canada, said automation of the lowest-skilled jobs, primarily in e-commerce, had made it harder to hire new people or backfill some roles.
“If AI reduces the volume of entry-level roles that BPOs and call centers once provided, what’s next?” asked Boldr founder and CEO David Sudolsky. “I think there’s a significant risk of displacement.”
For Sudolsky, the industry will no longer scale with “hundreds of thousands of jobs” for fresh graduates like before, but may introduce “roles requiring technical skills and comfort with tech tools”, like training chatbots and algorithms.
A non-unionized industry
BPO companies have long striven to cut labor costs, replacing staff with new and cheaper hires, and now by AI.
Cabalona said the only way to protect BPO workers was to create labor unions to lobby for wage increase, security of tenure and health and safety at work.
“But BPO in the Philippines is a non-unionised industry,” she said, and the government “seems to want to keep it that way as a catch to investors.”
Cabalona said workers were summarily dismissed “if the client no longer wants you because they feel like you’re not productive, or not meeting their metrics.”
Upskilling workers
Cabalona said Filipino BPO workers were trained in voice and soft skills, such as being able to empathize.
She said this created a huge skills gap between traditionally trained call center agents and those with the technical ability to work with AI and are able to use AI tools to answer customer queries, annotate or label data for AI or train AI bots for audio or text.
Sudolsky said the looming AI shift may favor people with a tech mindset and leave other workers behind.
“Is training BPO workers to use AI enough to secure their employment? It’s a minimum requirement, but those who really understand AI are the ones who’ll thrive. Those who don’t engage with it may need to find new jobs,” he said.
The government and private sector see upskilling of BPO workers as a solution to address possible job displacement.
IBPAP said many BPO companies were “proactively training their employees to acquire the specific skills needed for AI-augmented operations”.
This includes training them in programming, data science, data analytics, and AI ethics.
But beyond upskilling, Cabalona said labor rights of BPO workers must first be protected.
“Multinational BPO companies are here because they wanted to lower production costs and earn more profit and often, workers’ unions are present in their countries,” she said.
BIEN supports the proposed House Bill 8189 or the Magna Carta for BPO Workers, which proposes a standard entry-level and living wage for the industry.
“One legislator even told us we’re in a better position than some overseas Filipino workers who suffer abuses. Why is it like that for BPO workers? We deserve better,” Cabalona said.
($1 = 59.0090 Philippine pesos)
— Reporting by Mariejo Ramos; Editing by Amruta Byatnal and Jon Hemming
