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Bangalore’s Calling
Global Re-Location of Call Centre Jobs
1) Intro
2) The situation in countries of origin: USA, UK, Australia
3) General situation in destination countries: India
4) Same procedure as everywhere: wage pressure and turnover
5) Short stay in India: relocating further
6) Sex and violence: last, but not least some good news
Intro
The
following should provide a general overview of the global re-location
of call centre jobs. So far most of the (union) initiatives and answers
to the question of re-location were constrained to protectionist and/or
nationalist campaigns for the ‘defence of our jobs’. We can recall the
‘Pink Elephant’ campaign of the English CWO (Communication Workers’
Union) when British Telecom made an announcement to slash jobs in the
UK in order to shift them to India. There are several racist campaigns
in the USA calling for abusive behaviour when talking to an Indian or
Philippine call centre agent. We don’t criticise the fact that workers
fight against redundancies and threats of relocation, like at Wanadoo
in France, when the management planned to shift work to Morocco (see
article on call centre struggles in France). But it is all together a
different thing if unions try to conjure up nationalist sentiments,
talk about ‘British quality’ and similar stuff, as part of a populist
campaign which didn’t hurt the bosses at all. There have only been a
few campaigns where activists tried to break down the national
perspective of their unions, e.g. when a US-delegation of unionists
visited colleagues in India or campaigns of Spanish and Argentinean
activists, when Telefonica tried to play workers off against each
other.
The rapid development of the call centre relocations means
that they also serve as proletarian case studies on how the conditions
change in the country of origin and in the destination country, how
capital adapts to different situations, and how workers find new ways
to struggle as well. As we will see, within a short period capital had
to face up to the same basic problems in Indian call centres as it had
to in the UK: a high turnover of staff, increasing pressure on wages
from below, first (violent) reactions of workers against the
undignified working conditions. Capital’s reaction shows its intrinsic
limitations, as it further migrates from the big cities to smaller
ones, from India to Pakistan and the Philippines, in order to start the
same cycle again, but at a higher pace.
The situation in the countries of origin: USA, UK, Australia
Since
the late 90s, as a result of the crisis in the IT and financial sector,
a lot of companies cut jobs and/or relocated them abroad. This process
still continues. Following some recent examples of companies who
shifted their call centre work to India or the Philippines:
* Datamonitor
predicts that more firms are set to follow the likes of British
Airways, Citibank, General Electric and HSBC, all of which have spun
off a part or all of their operations to India. [Datamonitor - 21st of March 2005]
* 350
call center jobs to go at British Gas: British Gas workers in Oldham
have been told 350 of them will lose their jobs because a new £430
million computer system can do their work better. The clerical,
administrative and data processing jobs at the Higginshaw Lane site
will be shed in the next 12 – 18 months because workers have been made
obsolete by the new technology. The company is considering transferring
any remaining clerical work that cannot be done by the computer to
workers in India. [www.oldhamadvertiser.co.uk - 21st of July 2005]
* British
Gas goes India: Recent reports that British Gas (BG) plans to axe 2,000
jobs in the Kingdom, out of which about a 1,000 including “back office”
jobs, would move to India, have spread panic among workers, especially
in Manchester, where four BG offices are located, according to
newspaper reports there. Interestingly, in their anger against
offshoring jobs to India, trade unions are making much ado over the
data protection issue. Though not overt, the reference surely is to the
recent Indian call centre case where a British reporter was said to
have got hold of classified data by offering money to an Indian
employee. According to Unison, British Gas plans to move backroom work
to India where the company claims they can make a 400% saving in
operation costs. [www.financialexpress.com - 21st of July 2005]
* IBM
shifts jobs from USA to India: Even as it proceeds with layoffs of up
to 13,000 workers in Europe and the United States, IBM plans to
increase its payroll in India this year by more than 14,000 workers,
according to an internal company document. [The New York Times - 8th of July 2005]
* NAB
shifts call center jobs: NAB outlined the plans to axe 4,200 jobs from
its Australian and UK operations as it revealed its half-year financial
results. This would affect 10 per cent of its global workforce.
Yesterday, Abbey’s new Spanish owner said it would cut 4,000 UK jobs
following its acquisition of the bank, rather than 3,000 as first
envisaged. It said the staff affected by today’s job losses were
“victims of offshoring by proxy”. The claim was denied by Lloyds TSB,
which announced last year it intended to have 2,500 staff in India by
the end of this year. [The Times - 12th of May 2005]
* Dell
adds 2,000 more staff in India: Dell plans to increase the number of
staff at its Indian call centre and software development operations to
10,000 by the end of the year, the company’s president and chief
executive officer (CEO) said Friday. Dell currently employs about 7,000
to 8,000 staff in India, Dell President and CEO Kevin Rollins told
reporters during a visit to Bangalore. [IDG News Service - 2nd of May 2005]
*
Call centre operator Sykes Enterprises shrank its U.S. operations and
last year added close to 10,000 call centre workstations in Costa Rica
and the Philippines. [Times Business - 2nd of May 2005]
It’s
obvious how capital uses and creates patches of regional
(under-)development, in order to recompose the conditions of
exploitation. The call centres in the USA, the UK or other western
countries had been praised as the alternative mass employment for
de-industrialised regions, such as Leeds, the Ruhr area, the mining
regions in the US. Low wages due to high unemployment and a work-force
shaken by years of crisis attracted the call centre companies. The
following summary of a Los Angeles Times article shows clearly the
political content of capitalist (under-)development:
Clintwood,
Va. - This remote Appalachian town doesn’t get many visitors, but every
day it sends thousands of travellers on their way. If you buy an
airline ticket off the Travelocity website and need to call with a
change or a question, the phone rings here. The Travelocity call centre
brought 250 jobs to a community wounded by the decline of coal mining,
its mainstay for a century. It plugged the town’s 1,500 residents into
the global high-tech economy, offering the prospect of a secure future.
That illusion crumbled last month when Travelocity fired Clintwood,
saying it would close the call centre by year-end and move all the jobs
to India. (...) Opened fewer than three years ago, the centre is the
largest private employer in the county. (...) The call centre clerks in
Clintwood start at $8 an hour. In India, their replacements will earn
less than a quarter of that. (...). More than a quarter of the 2.25
million call-centre jobs in the U.S. are expected to go offshore. (...)
Until recently, Appalachian towns such as Clintwood were an outsourcing
destination, not a victim. Companies that wanted to cut costs could
hardly find a cheaper place in America. With that salary of $8 an hour
plus benefits - something almost unknown in these parts for entry-level
jobs - Travelocity had no trouble attracting employees. (...). In a
financial document announcing the call centre’s closing, the company
said it had been trying to cut costs but “attrition levels” were a big
reason it wasn’t successful. “It was $4,000 in training every time we
hired someone new,” Peluso said. “Many people made the economics
tougher by choosing not to stay with Travelocity.” Did Clintwood, then,
fail Travelocity? The call-centre workers acknowledge that many new
hires worked briefly and quit, unable to endure the cranky customers
and strict regimen. Suddenly, $8 an hour didn’t look that good. (...)
The joke among the town’s citizens is that the only secure jobs are at
the new state prison, because they’re not going to be shipping the
convicts to India anytime soon. There are several new lockups around
the county, which a lot of people have mixed feelings about. “It’s not
quite as bad as being a nuclear waste dump site,” said John Clay
Stanley, director of the Dickenson County Chamber of Commerce (news -
web sites). (...) Fifteen years ago, the primary employer in Dickenson
County was Pittston Coal. Like Travelocity, it was losing money. So
Pittston cut benefits for retired miners and their widows. The miners
responded by walking out. Hundreds were arrested for civil
disobedience. Violence flared as the strikers punctured tires on coal
trucks. The strike lasted nearly a year, the bitterness far longer.
“The situation with Pittston was physical,” said Will Mullins, 22, a
Travelocity operations manager. “We could block the roads and block the
trucks, and there was no way they could get the coal out. But there’s
no way to block the Internet. If we tried to do a strike, they’d just
ignore us. [Los Angeles Times - 28th of March 2004]
That the
practical difficulties of fighting company closures and the nationalist
perspective of most of the unions result in the ugliest forms of
workers’ response is documented in the following note from the net:
I
made an Indian woman cry and promise to quit her job in 60 seconds. You
can do it too! I have inside knowledge of call centres, having worked
in several. It’s crucial that the agents be efficient. Barraging them
with 60-second calls will ruin their stats and also lower their morale.
Eventually, they’ll start thinking ‘another damn rude American a******’
every time a call comes up. All of this will have a cumulative effect.
If 100 people across the US would commit to spending 10 minutes a day,
we could cripple them, and bring those jobs back to the US.
This is
only a random (and printable) selection from the thousands of messages
in cyberspace calling for a campaign to harass Indian call centre
operators, to put an end to the offshoring of jobs. In the last few
months, and particularly since the US presidential elections, people
working in call centres in the country say that they are receiving more
abusive and racist phone calls than ever before.
‘Earlier, people
would get abusive if we didn’t answer their questions satisfactorily.
Now, I get calls-on some days up to five a shift-from people who are
calling only to abuse,” says Shalini J, a 22-year-old engineering
graduate who works in a major call centre in Malad.’ [www.callcentres.net]
Facing
that kind of response it is wonderful to know that even working class
racism can be turned into profitable business. Advert on the net:
American
English Accent. Hello, we specialize in training in American English
accents. We are based in San Francisco, USA. Our trainers are licensed
speech pathologists with a Master’s Degree or Ph.D. Our trainers will
come to your call centre! Over 20 years of experience, with companies
and call centres in the Philippines, Korea, and South America.
Examples
of cross-border activities are rare, but even high up in the union
bureaucracy the more clever functionaries can see the necessity of
understanding the situation in the destination countries. Although we
can expect that the union rep’s comments on the situation in Indian
call centres is partly due to the selective policies of the Indian
companies inviting him and the populist attitude of union officials, it
nevertheless indicates a global standardisation of working conditions:
Call
centre professionals in India are well taken care of by the employers,
compared to the US, where the workers were treated as a “commodity”,
said an official of Communication Workers of America (CWA), the largest
workers union in the US. “The call centre environment in India is much
better. In the US, the employers are not considerate about the workers.
They treat people as a commodity,” Steve Tirza, President, CWA, who was
in Chennai along with other members to have a first-hand understanding
of the call centre and IT industry in India, said. In the US, about 8
per cent of the people in call centres report sick, per day, Hicks
said. [The Hindu - 23rd of June 2004]
Another, probably rather
symbolic cross-border action took place during the recent strike at the
HSBC-bank. Nevertheless the action has got some significance given that
HSBC has been in the news due to it’s plans to relocate work to India:
Thousands
of HSBC workers will stage a nationwide 24-hour strike tomorrow in a
dispute over pay, the biggest industrial action against a leading bank
for more than eight years. The bank said around 10,500 of its 55,000
workers belonged to Amicus so it expected most of its employees to be
in work. The union claimed that 10% of staff will receive no pay rise
this year and a further 45% will be given an increase below the rate of
inflation. Amicus claimed that HSBC workers in India staged a protest
today in support of the UK workers. [news.scotsman.com - 27th of May 2005]
Situation in the countries of destination: Canada, India
A
main destination of outsourcing US-companies is Canada, where the call
centre sector was still booming during recent years, unlike in the US
or Europe.
The StasCan report’s main finding is that Canadian
business support services registered “unparalleled growth” between 1987
and 2004, driven by the adoption of new information and
telecommunications technologies during the past two decades. Business
support services workers, who mostly work in call centres, numbered
112,000 in 2004, up from 20,000 in 1987, according to the report,
entitled, “Who’s calling at dinner time?” The sub-sector’s growth rate
of 447 per cent well outstripped that of the service sector (37 per
cent) and the overall rise in employment in Canada (29 per cent), over
the period studied. Wages in the industry were also lower than in
comparable service industries, contributing to above-average turnover.
In 2004, the average pay was $12.45 an hour, compared with the service
sector average of $18.10, and the overall average of $18.50, the study
found. Some 85 per cent of workers left their jobs after five years or
less, compared with 55 per cent for all service industries and 53 per
cent for all industries combined. [www.cbc.ca - 25th of May 2005]
The
other main target country for US call centre services is India. In
India call centre work and work in the IT sector in general is done by
a comparatively tiny fraction of the total work force; to be exact, by
about 0.2 percent. In most cases the people working in these jobs have
a middleclass background and they went to university. In a country with
half of the population still malnourished and illiterate, and with only
about four per cent of its households with telephones, these jobs can
be sold as a privilege, as a present from the developed world. The call
centre companies praise the advantages of India for the international
outsourcing process:
* India is the largest
English-speaking population after the USA, has a vast educated
workforce, the manpower cost is approximately one-tenth of what it is
overseas. Per agent cost in USA is approximately $40,000 while in India
it is only $5,000. [‘Outsourcing’ - 7th of February 2004]
* Average call centre salaries in the UK are about £12,500 ($22,000) a year, compared with £1,200 ($2,100) in India. [BBC - 11th of December 2003]
* In
India, the influx of jobs has produced a community of young, single
Indians who have traded the frugal lifestyle of their parents for
extravagance. Sadhana Pasricha, a business and sociology professor at
Goldey-Beacom College in Pike Creek, Del., recently visited India and
said she was surprised by the trendy shops and bars in big cities, as
well as the young people she met. Leaving home for a better life is no
longer necessary. “In one generation, they’ve become a global
generation,” Pasricha said. [www.tucsoncitizen.com - 14th of June 2005]
We
haven’t found much material on the actual working conditions in Indian
call centres. The following study is likely to be very biased, given
the particular interests of the client, the British bosses and unions.
Both are eager to show the ‘special quality’ of the British call centre
performance. Nevertheless the survey might provide some hints:
The
research carried out by ContactBabel on behalf of the DTI (Department
of Trade and Industry) found that UK workers answered 25 per cent more
calls than Indian staff and resolved 17 per cent more queries first
time. While Indian workers answer the phones more quickly, researchers
found their calls last longer, possibly because of language or cultural
difficulties. Moreover staff turnover at Indian call centres is worse
than at UK operations, with Indian graduates only willing to stay in a
job for an average of 11 months, compared with three years in the UK.
But the report also revealed that overseas call centres are cheaper to
run as Indian workers are paid less than 12pc of a typical salary of
their UK counterparts. The report said the average starting salary for
a worker in India is just £1,500 a year, compared with £13,000 a year
in the UK. Steve Morrell, author of the report, said the difference was
a “shock,” especially as Indian staff typically worked six hours a week
longer than those in Britain’. “We already know the answer to any
survey that the government has commissioned and so do the British
consumers,” said David Fleming, the national secretary of Amicus.
“Services will suffer, cost savings will not be transferred to the
consumer, poor business decisions will be made in pursuit of short-term
cost savings and company brands will be damaged by outsourcing.”’ [BBC - 12th of February 2005]
In
India the first public criticism of the call centre jobs emerged,
declaring that the jobs aren’t steps towards development, but rather an
extension of the sweat-shop policies in a different form.
* About
85 per cent of Indian BPO work is handling calls, but this category
accounts for less than 10 per cent of work outsourced globally. So you
can’t build a sustainable future on such a narrow global base. [The Telegraph - 20th of April, 2005]
* The
huge growth in India’s call centre industry was highlighted again last
week, as British company Norwich Union announced they would be cutting
2,350 UK jobs and relocating them. But author Praful Bidwai said that
in effect the centres reduced the young Indian undergraduates to
“cyber-coolies.” “They work extremely long hours badly paid, in
extremely stressful conditions, and most have absolutely no
opportunities for any kind of advancement in their careers,” Mr Bidwai
told BBC World Service’s One Planet programme. “It’s a dead end, it’s a
complete cul-de-sac. It’s a perfect sweatshop scenario, except that
you’re working with computers and electronic equipment rather than
looms or whatever.” [BBC - 11th of December 2003]
And of course it is possible for the British to get their jobs back, they just have to relocate themselves:
In
a new twist to the outsourcing of call centres saga, UK graduates and
backpackers are being employed by UK firms to work in offshore Indian
call centres on Indian salaries. These backpackers can work in call
centres in India supporting UK customer service operations and earn
between Rs 11,000 (200 Euros) a month at entry level to Rs 40,000 (720
Euros) a month as team leaders. One such agency Launch Offshore, has
signed a deal for a pilot of six travellers to work for HSBC at its
offices in Bangalore, Hyderabad and Colombo in Sri Lanka. [BBC - 29th of April 2005]
If
a report in the Sun is anything to go by, up to 40,000 Britishers could
end up working in metros like Mumbai or Bangalore in the near future.
Quoting industry experts, the tabloid said that sectors like insurance,
banking and phone firms had in the last year shifted their operations
offshore to inexpensive countries like India as a wage-cutting measure.
Last year, 14,000 jobs were lost. According to the experts, the call
centre employees from Britain could expect to earn between £1,800 and
£4,500 annually.
[www.siliconindia.com
- 17th of June 2005]
Wage pressure and Turn-Over
It
is interesting to see that parallel to the acceleration of capital’s
movements the workers’ response also speeds up. For example, the
relocation in the car industry from western countries to the new
developing countries such as Brazil, South Korea, South Africa didn’t
take place much earlier than the 1980s. And it took a while before
workers created a wage pressure similar to the one in the countries of
origin. With call centres we can see a similar pattern, but due to
their very nature there is an acceleration of the whole process. The
following news items question the picture of contented and industrious
Asian workers who are supposed to happily welcome any old low-waged job
from western companies.
* An annual attrition rate of 50 per cent
plus is par for the course and a company that boasts of an attrition
rate of 30 per cent struts about like a prima donna. So the situation
is somewhat like what prevailed in the software industry during the
period of the tech bubble - more orders than what you know how to cope
with. The attrition is forcing BPO companies to pay more. Wages have
risen so quickly in India that it’s not much cheaper than Canada as an
offshoring location. [The Telegraph - 20th of April 2005]
* Indian
call centre attrition nears UK levels: The Financial Services Authority
(FSA) has found that the staff turnover (staff attrition) at Indian
call centres was approaching that in the UK, and that managers were
demanding comparable wages to their UK counterparts. The study,
conducted by the FSA into the impact of the increasing numbers of
financial companies that have moved call to lower-cost economies,
primarily India, says that the growing number of UK companies setting
up centres in cities such as Mumbai and Bangalore was creating intense
competition for staff, making them unlikely to stay with a company for
more than a few months and forcing up wages. [The Times - 9th of May 2005]
* Indian
back-office firms face a growing challenge holding on to employees,
even as they hire tens of thousands every quarter. Staff tend to
account for half of a back-office operation’s costs, according to
research firm Evalueserve, and the battle for talent has led to a
10-15% rise in employee salaries. Recruitment and training makes up 3%
of the overall per-employee cost of about $13,000 per year, including
administration and telecoms costs, according to Evalueserve. But the
really damaging cost is the lost business for companies which cannot
fill key jobs quickly enough. Many face a shortage of mid-level
manpower to manage their rapid growth as they lure clients with
promises of 40% to 50% cost savings. As the industry clocks up 50%-plus
growth, demand for quality personnel is outstripping supply. Employees
often hop to new jobs for slightly more money, and many do not view
back-office work as a career. Companies provide free transport,
subsidised meals and housing to retain staff, and try to enliven the
environment with musical entertainment, yoga classes and costume
contests. [The Hindu - 08th of July 2004]
As a consequence
of wage pressure, soaring real estate prices and labour shortages,
capital keeps on moving further abroad and/or towards the smaller
cities in India.
“Because of the fact that the demand for call
centre executives is increasing day by day, the supply from Delhi is
getting lower and lower,” “What we have done is to... move into smaller
towns. Over the last three months, almost 60% of our total hiring has
been done through these outstation offices.” [BBC - 11th of December 2003]
Apart
from relocation as an answer to rising wages, we also read more and
more about technological experiments in India itself to substitute the
work-force with high tech.
From low-end call centres to high-end
software development, Indian companies are seeking innovations to help
them combat the threat of new entrants to the market in countries like
the Philippines. One approach has been to offer higher-value services,
like business consulting or providing for a company’s full range of
software needs. Less well-publicized is a determined attempt to retain
low-end operations, even while expanding beyond them. The strategy is
to transform operations like call centres from labour-intensive,
cost-cutting shops into technology-intensive operations offering speed
and quality. At a Tata Consultancy research centre in the western city
of Pune, researchers are developing artificial intelligence software
that, once perfected, would be able to sift through a company’s
millions of e-mail messages, memos and other documents to detect and
formalize knowledge that the company may not know it possesses. Tata
Consultancy Services says such software could drastically reduce
technical-support calls by automatically gleaning from call transcripts
which problem keywords correlate with which solutions. “We can
transform the whole call centre - the way it looks today,” said
Subramanian Ramadorai, chief executive of Tata Consultancy. With
“automated software engineering tools,” he said, “if you’re deploying
1,000-people voice-activated call centres, tomorrow you may say you can
do the same thing with 10 people.” [www.iht.com - 27th of May 2005]
All in all various sources already speak about the end of the call center boom in India:
The
End of Call Center Entrepreneurship in India: Gartner Inc. released an
astonishing report that said, “As many as 70% of the top 15 Indian
business process outsourcing start-ups will cease to exist in the
coming months.” Gartner added scathingly that, “despite the hype, only
a small fraction of customer service outsourcing will be done at
offshore locations.” Margins in the call center sector have declined
steadily over the past couple of years, as customers demand lower bill
rates and agents insist on higher salaries. The result has been a
squeezing out of the smaller (and often newer) operators, which are
unable to spread their fixed costs over a larger base of revenue
producing agents. Throughout India and the Philippines, there has
already been significant rationalization (i.e. closings, buyouts,
mergers, etc.) in the call center industry, and Gartner is probably
right to say that more are to come. [www.indiadaily.com - 8th of July 2005]
Further Relocations
Indian
companies only managed for a very short period of two or three years to
establish themselves as low wage alternatives for international
capital. The workers’ response quickly crushed this image. As a
reaction countries like the Philippines, Pakistan, South Africa enter
the agenda. Often cheap explanations are brought up in order to
disguise the fact that these countries are only interesting for capital
because of the ‘virginity’ and low wages of their workers. The
Philippines and partly Pakistan are declared to be more interesting
because of the ‘Americanised’ culture and foreign policies. This
argument refutes itself, given that jobs are already relocated from
Manila towards the countryside, due to lower rent and wages.
The Philippines
A
recent survey by the Singapore-based ACA Research and Michigan-based
Fortune 500 staffing firm Kelly Services, seems to says that the
Filipinos are steadily progressing in the BPO business and may outsmart
the Indians soon. While an Indian BPO agent is likely to remain sick
for 15 days every year, Filipinos manage with only 8 sick leaves per
annum. They are also more loyal. While your next door BPO guy spends
less than a year (11 months) at a BPO, his Filipino counterpart spends
19 months on an average in a company. The Philippines is the third
largest English-speaking country in the world. About 72 per cent of the
population is fluent in English. The Philippines has one of the highest
literacy rates (94 percent) in the world. The US military rule had also
laid a strong base to the country’s telecom infrastructure. The country
was under the US rule from 1898 until 1935. It’s interesting that in
the case of India also the British rule had helped in giving a huge
popularity to the English language. Canada and Ireland are also
benefiting from their language skills to advance their outsourcing
business. Mexico, which was under Spanish rule from 1521 to 1810, has
bagged a huge chunk of Spanish voice processes from US. In the
Philippines, similarity in legal and tax framework with the US has
eased the administrative bottlenecks for the American firms setting
captive BPOs there. Chevron Texaco, AOL, P&G, Accenture and Dell
have set up centres there. Major BPO hubs in the Philippines are Manila
and Cebu City. Currently, there are about 100 call centres in the
country. Companies such as HSBC, Dell, AIG and UPS have all outsourced
their business to the Philippines. [www.callcentersindia.com - March 2005]
Apart
from the more or less interesting info, we also liked the headline of
the following article, which clearly confirms our thesis:
* Philippine
call centre boom spreads beyond capital: Faced with rising wage costs
as the pool of qualified candidates in Manila and central Cebu empties,
outsourcing firms are moving to parts of the country that are still
rich in English-speaking graduates willing to work for 12,000 pesos
($220) a month. In Baguio, 120 miles north of Manila, more than a third
of the 300,000 population are students. So far there is only one call
centre, run by ClientLogic Corp., a unit of Canadian firm Onex Corp.
“It’s a gold mine,” said Ramon Dimacali, head of industry group
Outsource Philippines, who sees benefits beyond pay rates that are a
third lower than Manila’s for the same caliber of graduate. “There’s
definitely higher loyalty, less attrition, less churn,” he said. But
there are signs the boom, a rare bright spot for the indebted economy
in recent years, could soon start to run up against the shortcomings of
an underfunded education system, poor infrastructure and a limited
labour supply. Bangalore in India alone churns out nearly as many
graduates each year as the 400,000 produced by the whole Philippines.
“We’re facing a hiring crunch,” said Carol Dominguez, president of
recruitment firm John Clements Consultants. “You’re losing more people
than you can hire. Call centres have to figure out a retention
strategy.” In 2001, there were only about six countries seen as serious
competitors for the outsourcing dollar. Now there are about 30, with
eastern Europe, China and South Africa among them. London-based
research firm Datamonitor said in a February report that the
Philippines was a strong competitor to India for the nearly 250,000 new
call centre jobs expected to be created in the two countries through
2009. The Philippines now has around 60,000 outsourcing jobs, compared
to 245,000 in India, according to Datamonitor. [Reuters - 12th of May 2005]
* The
Philippines has a bright spot in the call centre industry that
generated jobs for more Filipinos. From 1,500 seats in 2000, the
industry is growing by 20,000 a year and is expected to reach 60,000 by
the end of 2005 with almost $1 billion in revenues. But we still have
to do a lot of work to catch up with India’s 150,000 seats. [www.mb.com.ph - 22nd of May 2005]
* British
bank HSBC opened a 2,000-seat global centre for backroom service in
Manila’s Alabang suburb. The 185,000-square-foot facility at the
Northgate Cyberzone will be the permanent site for HSBC’s eighth global
centre. The bank operates similar hubs in China, India, Malaysia and
Sri Lanka. The HSBC hub employs 1,300 people and is expected to hire
2,000 this year. It handles call centre operations, mostly credit card
customer care services for the bank’s clients in the United Kingdom and
United States. It will soon serve the HSBC group’s desktop publishing
requirements. Jebsen said it was more expensive to put up such a
facility in India than in the Philippines, but less expensive than in
China. The average investment for call centres in the Philippines
ranges from $3,000 to $6,000 per seat. [money.inq7.net - 15th of June 2005]
* Philippines:
National Labor Code changes to boost call-center sector: To boost the
country’s thriving business process outsourcing industry, a senior
member of Congress has sought the immediate repeal of an old-fashioned
Labor Code provision that bans the employment of women at night. “The
absolute legal prohibition against night work for women has become
totally obsolete, irrelevant and inapplicable,” Rep. Eduardo Gullas of
Cebu said. At present, Gullas said local BPO service providers,
including call centers that employ mostly women, cope with the
prohibition through the tedious process of seeking an express exemption
from the Department of Labor and Employment. Since they have to deal
with clients in various time zones, local call centers have to operate
in up to three shifts 24 hours a day. [news.balita.ph - 30th of June 2005]
* Do
the Loop: Philippine call center company outsources to the USA: The
Philippine company that acquired Scottsdale-based Phase 2 Solutions
last year has opened another call center in the Valley and is hiring up
to 800 new employees. According to the company’s Web site, most of the
agent positions start at $9 an hour with opportunities for
performance-based bonuses. ETelecare Global Solutions, which is a
contract call center, now has three call centers in the Valley
employing about 1,600 workers. Because some of the 800 new jobs have
already been filled, the total employment in the Valley by eTelecare
will eventually range from 2,200 to 2,400, making it one of the largest
call center employers in the Valley. [The Arizona Republic - 30th of June 2005]
Pakistan
Pakistan
is trying to copy India’s success in luring IT work, but it’s slow
going: Think software and services outsourcing, and places like
Bangalore, Manila, and perhaps Budapest spring to mind. But Lahore or
Karachi? The country, after all, shares India’s British colonial
history and has some 17 million English speakers. It has a huge
community of émigrés with experience in technology. And like India, it
has a culture that values education and hard work. Wages, meanwhile,
stand at about the same level as in India, with call centre workers
earning about $12 per day and starting software engineers pulling in
$5,000 or so annually. Lower-level operations such as call centres are
expected to grow even faster: Some 120 centres have opened in Pakistan
in the past two years. Today they employ 3,500 people, and that number
is expected to grow by 60% a year. Arwen Tech, a Karachi company that
runs a 600-seat centre, saw its sales double last year, to $10 million,
serving clients such as Pakistan International Airlines and the local
franchisee for KFC Corp. (YUM!). [www.blogsource.org - 25th of May 2004]
South Africa
*
Africa: another English-speaking nation moves ahead to challenge India
in call centre market. An initiative supported by the national and
provincial governments in South Africa to lure call centres of
multinationals to this coastal city could impact on India’s huge role
in this field. One of the main reasons that could see South Africa
getting an edge over India was the stability of the communication
network in South Africa. He said India sometimes had communication
breakdowns that left multinationals with a concern over downtime.
Supported by the Western Cape provincial government as well as the
national ministry of trade of industry, the call centre industry in
Cape Town is expected to grow exponentially with the number of jobs
created expected to increase to more than 1,000 within the next three
months from just 60 two years ago. [BBC - 17th March 2005]
* South
Africa has “many of the same assets as India,” Bell says. It has an
English language heritage; high quality education; relatively low wages
and excellent political and business infrastructure. More than 200 call
centres operate in Cape Town alone. [www.informit.com - 17th of June 2005]
Latin America
* Research
from independent market analysis firm Datamonitor (DTM.L) concludes
that the fear of job losses from the US to Latin America is much ado
about nothing. “According to Datamonitor, the Latin American call
centre market is the fastest growing region in the world, spearheaded
by Brazil, Mexico and Argentina. Currently it has over 336,000 agent
positions in 5,100 call centres. [TMCnet.com - May 25, 2004]
*
Despite having a population of just 4 million people, a recent
outsourcing contract through Hewlett-Packard has elevated Costa Rica’s
role as a central figure among Central American and Caribbean
outsourcing nations. While the nation’s outsourcing ventures are still
stymied by bureaucratic complications like ICE, Costa Rica’s
telecommunications monopoly, some managers are starting to view the
nation as a growing centre for alternative outsourcing. InformationWeek
Reports: While the country has the obligatory call centres and
tech-support operations, it has begun to carry out some imaginative
tasks, too. Costa Rica is the land of coffee--they call it “grains of
gold.” Appropriately, a local IT company has developed a computerized
solution for sorting the precious beans. The firm, Xeltron, is now
working to develop the solution to sort rice and it sees a potential
global market therein. [FT - 23th of April 2005]
Israel
Jerusalem
becoming call center capital: When American entrepreneur and
philanthropist Howard Jonas visited Jerusalem during the peak of the
intifada he was overwhelmed by how many unemployed people there were,
even among the most highly educated. He decided to go beyond charitable
donations and in the summer of 2002, launched IDT Global (formerly
CSM), a Jerusalem subsidiary of his Fortune 1000 company, IDT, the
fourth largest telecom provider in the US. He found 20 Jerusalemites
formerly from the US who grew up amid American culture and manners, and
put them to work. The call center serving the US, Canada and western
Europe grew rapidly from 20 to 650 employees - skilled and educated
workers - and word got out around the immigrant community that having a
mother tongue in a language aside from Hebrew in Israel did not have to
be a professional handicap. “There’s no doubt that Jerusalem is the
optimal place for American and European companies to outsource their
work. There’s a huge brain resource here from North American and
European immigrants that provides unequaled source of manpower,” he
told ISRAEL21c. “We’ve drawn people from all manners of experience and
professional lifestyles, not to mention the multilingual capabilities
that are available.” A selling point of SUJ to potential foreign
investors, as documented by the report, is that labor costs in
Jerusalem are 40-60 percent lower than in the US or UK, for example,
but services are skilled, unlike India, where labor is cheap but
low-tech. Other advantages include an unusual labor force, with
mother-tongue fluency in a vast number of languages, including English,
Arabic, French, Spanish, Russian and German. SUJ is also manned on
staff and board by Jews and Arabs from around Jerusalem. “Arabic plays
a strong role,” says Khazdan. “Egypt is not going to outsource in
Israel, of course, but Europe has a growing number of Arabic speakers.”
“First of all, there’s an abundance of North American and European
professionals in and around Jerusalem who have decided to make Israel
their home. Seventy five percent of these immigrants are college
graduates - it’s a well-educated workforce and a huge resource for us,”
said Barnett. “Israel ranks better in terms of political stability than
India, the Philippines, South Africa, Mexico, China, Brazil and
Romania. We have big companies like Intel and IDT, and the political
situation doesn’t affect them at all... I think [even] Catalyst was not
expecting to find that Jerusalem was so suitable for ‘world class’
business outsourcing, in terms of the standards of technology,
infrastructure, management and labor force.”
[www.israel21c.org
- 10th of July 2005]
Eastern Europe and Others
* The
calling centres are on their way out in India, Friedman (New York Times
columnist) maintained. “They are going to move to Mauritius, they’re
going to move to Egypt, where they have a call centre of 1,000 people
now that works for Microsoft. That’s a call centre that would have gone
to Bangalore five years ago; now it’s in Cairo. So the low end is going
to migrate.” [news.pacificnews.org - 6th of June 2005]
*
The trend is toward “more offshore activity in countries besides India,
such as some of the smaller players like the Czech Republic and
Malaysia,” Pau notes. Moreover, she adds, there is likely to be a
farther eastward push within Eastern Europe, to countries such as
Romania and Bulgaria, as work spills over from places such as the Czech
Republic and Hungary. In the ebb and flow of the BPO sector, one
country - Ireland - appears to be ebbing. Ireland, host to call centres
in Dublin, has become saturated and is seeing wage and other cost
increases. That may not be the case in Northern Ireland, where India’s
HCL Technologies BPO Services recently says it was adding 400 jobs to a
call centre it operates in Belfast serving European clients. HCL
acquired the call centre from British Telecom in 2001 and already
employs 1,100 people there. An HCL official cited Northern Ireland’s
favorable “cost base” as one factor in his company’s decision to expand
the call centre. One BPO contender in Europe that is taking direct aim
at Ireland is the Czech Republic. CzechInvest, an arm of the Czech
Ministry of Industry and Trade, notes that the average salary in
shared-service centres in the Czech Republic is less than one-third the
salary for comparable positions in Ireland. Overall costs in Prague are
less than half of those in Ireland. [www.informit.com - 17th of June 2005]
Sex and Violence
Last, but hopefully not least, some good news concerning the fundamental driving forces of society:
* 3
cops injured in Mumbai call centre violence: The ongoing dispute
between the employees’ union and management of a call centre in Mumbai
turned violent on Monday with three police constables being injured in
the resultant stone-pelting. According to police sources, the
employees’ union and management of Hope India Ltd., a call centre in
Saki Vihar in suburban Powai, were at loggerheads with each other and
about 400 employees were on strike for the last few days. The dispute
took a violent turn today as the management allegedly manhandled the
employees. Fearing the situation worsening, a local resident called in
the police. As soon as the police came to the spot to intervene stones
were allegedly pelted on them from inside the office premises. Three
police constables were injured in the stone-pelting. The extent and
seriousness of the injuries are not yet known. Heavy police bandobast
has been ordered in the area and the situation is under control, the
sources said. Senior police officials have rushed to the spot to
supervise operations. [UNI - Mumbai, 7th of May 2005]
‘Kaam’ in Hindi means both, ‘work’ and ‘sex’, and a lot of call centre boys and girls seem to prefer the latter interpretation:
Hidden
cameras show enormous on the job sex by BPO gals and guys at night.
Indian BPO corporations have started monitoring their employee
activities at night. The call centre guys and gals at night are having
sex with each other and these are getting into secretly placed video
cameras watching them. The sex epidemic in India especially among call
centre gals and guys is rising at astronomical heights. According to
some think tanks, these guys and gals in early twenties get the sexual
freedom at night working together. The sex activities take place during
and after work hours in different places. Many companies take
disciplinary actions. Mostly they fire those employees who engage in
sex at work. But the number of employees engaged in lesbian and
straight sex has skyrocketed recently. [www.indiadaily.com - 8th of June 2005]
[prol-position news #3, 8/2005]
