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Contact center outsourcing: Friend or foe?

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House bill aims to restrict call center outsourcing

Proposed federal legislation would slow the exodus of call center jobs, but analysts question the intent behind it and effectiveness.

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Contact center outsourcing: Friend or foe?

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It’s not yet clear what will happen to a congressional proposal that aims to curb, if not end, the overseas outsourcing of call centers.

But the measure, at the very least, can serve as a reminder to businesses of the choices they need to make when determining how they will talk to customers, according to several industry experts who question the bill’s intent.

H.R. 3596 would require businesses that move call centers to locations outside the country to notify the Department of Labor, which would then publicize a list of these companies and make them ineligible for any government loans and grants for five years.

For more on call center outsourcing

Read about the pros and cons of outsourcing

Trusting outsourced agents is debated in this story

Rep. Timothy Bishop of New York said he wrote the bill to protect Americans from having their data stolen from overseas call centers after seeing news of consumers in Australia and England having their personal information swiped and sold by employees of call centers in India and the Philippines.

But as several analysts observed, data theft occurs not just overseas but also in the U.S.

“It’s happened in India and onshore as well. It happens everywhere,” said Richard Snow, research director at Ventana Research in San Ramon, Calif.

Layne Holley, director of community services for the consulting and training firm International Customer Management Institute, joked that maybe the “Norton AntiVirus guys” are the only ones not susceptible to data theft.

Snow said Bishop’s proposal could be a red herring, referring to at least one congressman – Rep. Michael Grimm of New York - touting that a new law would stop jobs from going overseas.

If the bill aims to protect U.S. call center jobs, then lawmakers should consider that the loss of such positions amounts to “a pinpoint on the back of an elephant” when compared with the many manufacturing jobs that have gone overseas, Snow said.

Indeed, this is not the first time politicians have tried to stem the flow of outsourcing call center jobs offshore. Two years ago, Sen. Charles Schumer of New York proposed a bill that would impose excise taxes on calls transferred overseas. That bill went nowhere.

What H.R. 3596 means for call center management
Bishop’s proposal would also allow customers to ask where a call center agent is located and request to speak with one in the U.S.

“Think about the overhead to do that,” Kate Leggett, a customer service analyst for Forrester Research Inc. in Cambridge, Mass., said of the cost of splitting operations between an overseas agent and one in the U.S.

But Snow offered that anyone who objects to this portion of the bill should keep in mind that a call center is all about customer satisfaction. Asking to speak with an agent in the U.S. who speaks strong English doesn’t necessarily signal prejudice or racial bias, he said.

“Some people try to label that as being racist,” Snow said. “But a call center is about understanding and resolving problems. They can’t do that if they can’t do the basics … when you have a customer saying, ‘I can’t understand what you’re saying to me.’ ”

The bill hasn’t yet been reviewed at the committee level. Bishop’s office didn’t return a phone call seeking comment.

Companies that already have call centers overseas would not be affected if the proposal passes.

Language of the call center outsourcing bill
Under the proposal, businesses that relocate call center operations to locations outside the U.S. would be added to the Labor Department list -- and thus be ineligible for government funding -- unless they can prove the loss of such money would cause “substantial” job loss or threaten national security.

“Of course, it’s up to the business,” Leggett said. "But I don’t think a protectionist way of keeping jobs in America, or anywhere, has ever helped any economy.”

“At the end of the day, the customer wants an easy, quick and efficient answer to their question,” she added. “If the agent is knowledgeable, does it ultimately matter where they are?”

Holley said a business considering outsourcing would need to judge whether a loss in government money would outweigh the benefits that can be found in using overseas call centers.

“The great thing is there are some really great call centers all over the world,” she said. “You need that quality, you need to be accurate, and the customer needs to be satisfied and happy in many ways.”

If businesses can’t operate their own call centers, they could consider employing at-home agents instead of having to consider outsourcing overseas, Holley and Snow said.

Technology allows these contact center agents to work as if they’re right in a business’ headquarters. Plus, employees enjoy working from home, and the practice reduces energy use, they said.

Still, when it comes down to the bill’s ostensible aim -- guarding customer information -- it should be remembered that no data system can guarantee complete protection, Holley and Snow said.

When contemplating a third party to run a call center, a business should review that company’s protocol and systems, Snow said. Companies that have done well with outsourced call centers have asked those third parties what they’ve done about hacking and employee security and are satisfied with the answers, he said.

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Essential Guide

Contact center outsourcing: Friend or foe?

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