The Good and the Bad of Offshore Outsourcing
Offshore outsourcing has been a controversial issue in the customer service industry for some time now.
Many tend to feel there are far more negatives than positives to offshore outsourcing, while others see nothing but the light.
It’s a given that like with anything else, there are good and bad things to come from offshoring, and I’ve personally experienced the sting of a company choosing to outsource their work overseas.
After working for more than a year in a call center that handled customer service and troubleshooting issues, I was offered a position in their quality assurance department. Essentially I monitored customer phone calls and ensured policies and procedures were met on every call.
I loved the job, probably one of the favorite positions I have ever fulfilled in a call center. After about 2 months of thriving and growing tremendously with all of the new information I was learning, I was pulled into a department wide meeting only to be told that our positions were being eliminated in the United States, and would be moved to India.
You can imagine how devastated we were!
They even went so far as to offer us a position in India if we wanted to relocate out of the Country.
It’s the only time I was given a two week notice, and I have to say I was quite a bit bitter about it. I was offered a position back on the ground floor with a pay cut, but I declined. Instead I went home and decided to figure out exactly why they would want to contract their business overseas, while leaving me with trying to figure out how to make ends meet.
After all it isn’t a secret that every time a company decides to engage in offshore outsourcing, many people are left without a job somewhere else. This impacts a lot of lives, and comes with consequences if you aren’t the company but instead simply an employee looking to support your family.
On the other hand if I were a company faced with an opportunity to save money while at the same time making money, I might be inclined to do so. As employees, we do this sort of thing all the time. If we get an offer for a job that pays better and offers better hours, we’d probably leave our current job and take the offer.
After the cry came the why
I was surprised to learn the many different reasons a company might choose to participate in offshore outsourcing. First of all, and probably one of the only reasons I knew for sure for a company to outsource overseas was the cut in their costs, a significant one at that. I knew instead of them having to pay me my $14 an hour, they could pay someone in India an average of $2 an hour. But beyond this reason, India is known to have one of the highest skilled workface base in the IT industry, making it possible to run a more efficient call center. And because of the 12 hour time difference between India and the United States, companies are able to effectively guarantee overnight delivery and achieve running a 24 hour operation with ease.Duty free imports are something companies are excited about and because India offers this, it’s yet another reason to outsource.
Privatization is something that is essential in maintaining control of a business when going to another Country and unlike many Countries, India allows privatization so it’s easy for a company to move or contract there.
There is a reduction in tariff on basic telecommunication needs including paging, internet, and cellular services. Most if not all of these services are used in call centers, hence the benefit of this. Proven capability is what is capitalized on when weighing the pros and cons of offshore outsourcing. India has this proven capability of being able to handle outsourced work, as call centers in India have satisfactorily contracted with companies such as General Electric, American Express, British Airways, and Microsoft.
Besides India, there are many other Countries with organizations designed to take outsourcing work from overseas, including Europe and the United States. For example, the Philippines have had no trouble jumping in on this kind of work. The average salary for a call center agent in the Philippines is $250 a month. They offer adequate language skills and experience, as most Philippines are known to speak Americanized English. The call centers found in the Philippines are employee focused, so offering good customer service is just an added benefit to outsourcing here.
Some figures...
All in all, even though offshore outsourcing isn’t productive for Countries losing the work, there are certainly many benefits a company can realize by outsourcing the work. In fact, between 2000 and 2004 more than 250,000 jobs were outsourced offshore which resulted in a loss of almost 150,000 jobs in doing so. A 20% increase is estimated for each year until 2008. In 2005, Forrester research estimated an amount of 3.3 million service related jobs including call center work and more than 130 billion dollars in wages were outsourced to Countries such as India, Russia, China, and the Philippines.Although these numbers are astounding, not all call centers will be outsourced overseas. Call center professionals will continue to offer superior customer service and fight for their jobs. The controversy is bound to stick around for awhile longer in regard to offshore outsourcing, with companies throughout the World that strongly believe in keeping their work at home.
No matter what a company chooses to do with their business, whether offshore outsourcing is right or wrong is a question that will be debatable as long as outsourcing is a continued practice.
