February 08, 2002
Call Centers Moving to Poorer Areas, Overseas
For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now! >Since the mid-1990s, corporations have been cutting costs by moving their phone banks out of high-wage urban areas, sending thousands of jobs to places like the depressed Central Valley of California and even overseas, particularly India, the San Francisco Chronicle reports.
"It's comparable to what happened with factories in the 1900s. They all started off in the Northeast, moved down South and then overseas," said Andy Shapiro, a consultant who helps corporations select call center sites.
Calls to the 800 numbers of many U.S. companies are now answered by young college graduates in Bangalore, India, who work with accent coaches to Americanize their English, the Chronicle reports.
General Electric Capital, Dell Computer, and the insurance firm Conseco now run their customer service centers out of India, with Indian citizens fielding calls from all over the globe.
Other firms, such as Sun and Hewlett-Packard, are dabbling in India; each has a few phone or e-mail representatives in India answering employee and customer questions. AltaVista, Amazon.com and Citicorp already have out-sourced some of their e-mail or phone customer support to firms with Indian call centers.
American out-sourcing firms that take over companies' customer service work are also looking overseas, according to the Chronicle. The Tampa, Fla., customer service out-sourcing firm Sykes Enterprises said in January that it would close call centers in Greeley, Colo., and Bismarck, N.D., and concentrate instead on expanding operations in Costa Rica and the Philippines.
The Chronicle points to a report published in September by research firm Datamonitor that says out-sourcing firms hope to multiply their call-center agents in India almost tenfold by 2005, from 3,250 to 35,000.
The report predicted that in the United States, out-sourcing firms would increase hiring only by 6 percent during the same period.
Meanwhile, in Porterville, Calif., a town of 40,000 where job opportunities are limited to fruit packing or working at the local Wal-Mart warehouse, officials have high hopes for an abandoned grocery store that they've marketed as an ideal home for a call center.
Residents are happy to take jobs paying as little as $7 an hour with benefits, these officials tell the Chronicle. Porterville College's Customer Service Academy is even ready to train applicants at no cost to their prospective employers.
But when compared with Indian pay rates of $2 to $3 an hour for college graduates, Porterville's costs suddenly seem sky high. American call centers spend 67 percent of their overall costs on labor, so salaries are a major consideration.
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