CustomerServ Blog

Anti-Outsourcing Legislation? Are you kidding me?

October 15, 2013 by Nick Jiwa

Share this on social media:

The bi-partisan anti-outsourcing legislation introduced by Democrat Representative Tim Bishop of NY and Republican Representative David McKinley of Virginia probably won’t make a dent in the unemployment rate. The outsourcing of call center jobs is an easy target for politicians who refuse to accurately talk about the facts. Instead, we get platitudes and populist messages.

The legislation, like its predecessors has some legs although I doubt it will pass. If it does, our company, CustomerServ® could stand to benefit from an industry shakeup. We advise companies on the best on-shore and off-shore contact centers to select for their business needs. Currently, CustomerServ®’s business mix is domestic and offshore so we’re destination agnostic. We’ll guide our clients to the best solution for their sourcing needs, utilizing our extensive knowledge base of the call center industry.

If however, there’s a “forced redeployment” of contact centers onshore, we stand to gain by helping our clients select the right domestic vendors. That doesn’t mean we support this legislation because we don’t. We stand with our fellow outsourcing professionals, opposed to any unfair government regulation of our industry which is being scapegoated for political reasons.

The legislation would penalize corporations that outsource contact centers offshore and it will require the call center agent to disclose his/her location. The bill has strong union backing from CWA- the Communication Works Association of America’s which has 700,000 members. Around 150,000 are customer service representatives. The CWA plans to release a report indicating that consumer fraud is more prevalent in offshore call centers. I challenge this report and disagree wholeheartedly.

Let me be clear. Offshore outsourcing is imperfect. Of course there are issues. I’ve written articles on the issues and after 20 plus years in outsourcing, I’m qualified to separate perception from reality. The reality is that for every act of fraud committed in offshore call centers against USA consumers, I can name 2 acts of call center fraud committed against USA consumers, by USA based call centers. So the CWA’s assertion that American’s are at greater risk with offshore outsourcing isn’t entirely accurate.

When our Vice President goes so far as to mimic Indian call center representatives and assert that call center jobs pay $19.75/hour in the USA, he’s not entirely inaccurate. That wage rate is possible only if you’re a unionized call center agent working in a captive or in-house operation. However the majority of USA call center workers are NOT working in unionized call centers. They work for third party outsourced call center companies with a wage rate of 30-50% less than unionized workers.

When our political leaders go around accusing corporations of outsourcing offshore, then turn around and accept political contributions from those SAME corporations, is that hypocritical? Should we expect anything else from politicians? I would like for someone to examine the corporations that made political contributions to every single member of Congress and the President. Then, let’s identify which corporations outsource contact centers offshore. Then ask each Congress member and the President to call-out those corporations with offshore call centers that they accepted contributions from. I bet you this will NEVER happen. It goes against the grain of the sad politicized environment in which we find ourselves.

The fact is, most companies that outsource offshore, only outsource certain queues – or lines of business. We don’t have a single client that outsources ALL of their contact center business offshore. A large portion of their business is balanced between USA outsourced/captive (internal corporation owned) and international call centers. By off shoring certain queues offshore, wait times and hold times are decreased due to the lower cost of using offshore agents. If USA corporations were forced to onshore all of their queues, given the higher cost of on-shoring, fewer workers could be hired thereby increasing hold times. Perhaps you won’t have 24/7 hour customer service any more. Ever thought of that?

In tier 1 call centers- that is, companies with top shelf data security, all consumer data resides in the USA and it never goes to the offshore call center. Technology is configured so the offshore agent sees very limited information on their screen about the customer and their private data, thereby limiting the chances of fraud. USA companies that outsource offshore are becoming ever more vigilant about requiring criminal and background checks on offshore employees. That’s not possible in some offshore countries, I understand that. However, not all USA based call centers conduct criminal background checks, previous employment histories or even drug tests.

I won’t devote any time right now to a country by country analysis on the positives and negatives of offshore outsourcing. That’s not the point here. What is important to note is the collaboration, economic, political, educational and social between USA corporations that outsource internationally and the recipient countries of USA offshore business is positive. The affinity that offshore call center agents have to the USA is generally very strong. After all, an American corporation has employed this individual correct? Even if the outsourcer they work for is an international company, the job is based on representing a USA corporation. Offshore call center agents watch American shows; follow American culture and politics and ultimately, BUY AMERICAN PRODUCTS. That revenue flows right back to the USA. Need I say more?

Let’s be clear about a few more facts. Many call centers in the USA tend to have high turnover. I must qualify this by clearly stating that not all USA call centers have high attrition. Many of our USA based partners have innovated methodologies to reduce employee turnover. However, for the typical USA call center worker, it’s a transient job. In most call centers across the USA, you will find a mix of agents from the mature career call center employee to the college student to the laid off MBA working part time. The fact is that attrition rates are high. In many pockets of the country, call center outsource companies tell us they can’t fill the available jobs in their call centers because they can’t attract or keep workers.

Attacking outsourcing is another attempt at a Congress with 11% approval to push forward, any legislation for political expediency. The bill, labeled, the USA Call Center Worker and Consumer Protection Act requires USA corporations to provide the government with 120 days’ notice before off shoring call center jobs. The company would then be put on a public list, whatever that means. A “blacklist”? So let’s assume that the world’s most successful technology company, the second richest company in the world, based right here in the USA ends up on that list. Does that mean Americans will stop buying their products? I doubt it.

Imagine if the technology industry, cable companies, wireless providers, etc., per our government, are penalized and sanctioned for outsourcing offshore. And over time the sanctions are negatively impacting the bottom line, so these corporations decide to stop outsourcing offshore call centers, offshore IT development, offshore R&D, offshore manufacturing etc., Guess what Congress, guess what American consumer, YOU will officially pay MUCH more for these goods and services. And then what? YOU will excoriate the corporation, again right? So, the reality is that USA corporations are in a lose-lose situation.

The kind of legislation we REALLY should be focused on should prevent Congresspeople from profiting from insider trading. Make sure they pay their “fair share” like their constituents do. More importantly we should be vigilant about term limitations to prevent Congress from doing too much damage to our country long term. Instead, we elect, then re-elect leaders that don’t know the first thing about leading. They go in with bright ideas, get wealthy, get use to the good-life and come up with every possible way to waste our tax dollars. Instead of innovating solutions to our nation’s problems, they’re in constant campaign mode, drumming up legislation which will never tackle the root of our issues as a country.

I strongly recommend they pick up an economics book and understand how things work. Maybe they should visit onshore and offshore call centers, interview industry leaders and really understand the impact of their proposed legislation. Or better yet, lead by example. Part with the every high tech gadget they own, manufactured in a foreign country. Trade in their foreign made cars. Stop wearing any clothing made outside the USA. In essence, an attack on outsourcing is an attack on every single USA based corporation that hires any form of foreign employee to produce any type of good or service. So let’s see how far this bill actually goes.