Rationale Behind Call Centers

The recent recession experienced by the United States and other developed economies has brought into focus the issue of call centers, and other similar work they outsource abroad. Critics dispute that unemployment could vastly be reduced if these jobs are kept at home. Opinion is further expressed that all phases of production of their goods and services are better handled by them.

The practical reality is that while they would spend 67% to 72% of all costs on their own call-center work force, outsourcing the same to other countries would allow them to spend only 33% to 40%, even to include training, benefits, and other incentives. Specifically, the percentage reduction compared with home-based expenses may be cited as follows: 12% on general and administrative costs, 14% on personnel, 33% on property rentals, and 50% on equipment depreciation. This saving is due to the uneven exchange rate of the currencies of the client and the service provider countries.

It is estimated that every dollar of U.S. labor cost assigned overseas, generates $1.12-$1.14 in additional value for the American economy by making goods and services cheaper, and companies more competitive. Keeping the service at home incurs high investment with 5 to 10 time's longer payback period; therefore keeping them overseas is the more financially sound alternative.

In return, the countries that receive the outsourcing services generally experience impressive financial growth and higher standard of living for those directly involved. It is definitely a WIN/WIN situation all around.

Outsourcing of services is generally resorted to in processes that:
• are associated with the company’s image enhancement
• require minimal access to the company’s intellectual properties and patents
• incorporate core competencies with the least possible influence on overall operations
• are non-labor intensive

Countries competing for leadership in outsourcing potential have to show:
• written and spoken proficiencies in the English language
• skilled workforce
• flexible work hours
• lower labor costs
• available staff or management

Negative considerations must also be taken into account:
• political and religious instability
• cultural differences
• internal competition for resources
• rising labor costs
• poor infrastructure

An unexpected drawback, as evidenced by call center studies, is the high rate of attrition, which runs as high as 40%. Most agents are able to stay only an average of one year or so, for the following reasons:
• the industry preferentially hires dynamic and restless young people that easily becomes discontented and desirous of building their own career
• individual talent is generally overlooked and all effort only directed to pleasing the clients
• the job is perceived as upper societal by nature of the image presented by the work force
• many consider the opportunity as simply temporary, a back-up income in-between stable regular employments
• monotonous semi-mechanical and repetitive operation during ‘graveyard’ hours thus very conducive to boredom and drowsiness

To counteract this problem, BPO firms are initiating and pushing steps on several fronts:
• hire more mature and emotionally reliable personnel
• recognize personal talents to be suitably rewarded
• encourage involvement in community-based programs
• provide more tangible job security policies
• as far as is practically possible, implement round-robin turns in responsible positions or functions within the line-of-business or account

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