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Call Center Outsourcing Slows
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SHOW: Morning Edition 11:00 PM EST

February 23, 2006 Thursday

HEADLINE: Call Center Outsourcing Slows

ANCHORS: RENEE MONTAGNE

REPORTERS: JIM ZARROLI

BODY:
RENEE MONTAGNE, host:
Over the past few years, some U.S. companies have been closing their domestic call centers and relocating them to low-wage countries like India. Researchers say many more companies are resisting that trend.
Despite huge savings, these companies say some call center jobs are ill-suited to overseas workers. Many companies have found an alternative to outsourcing: hiring workers who answer calls from their homes.
NPR's Jim Zarroli reports.
Unidentified Man: Honda Accord. And what color is it?
JIM ZARROLI reporting:
Every day of the year, the call center at AAA of Northern New Jersey receives at least 500 calls. Many come from stranded motorists whose cars have broken down.
Executive Vice President David Hughes says roadside assistance is one of the most important things the company does.
Mr. DAVID HUGHES (Executive Vice President, AAA of New Jersey): If you're stuck on the side of the road, it's the most important thing we do. AAA is known for road service, among other things, but that's what members usually refer to when they talk about AAA.
ZARROLI: Hughes says that in busy times, or at night, the calls that come in to New Jersey are routed through AAA headquarters in Florida. It would be a lot cheaper to route calls through India, or the Philippines, but Hughes says that's something the company has never considered.
Mr. HUGHES: One of the downsides is location. People aren't familiar with New Jersey roads and highways. Now that's not to say that people in South Florida aren't either, but I think the learning curve on someone in another country might be a bit slower.
ZARROLI: It's a view that is shared by a lot of companies, says Rosemary Batt, Associate Professor of Human Resource Studies at Cornell University, who recently surveyed almost 500 call centers. Batt says there's been a steady trickle of companies sending call center jobs to places like India, places where English is widely spoken and there's a glut of educated workers.
But she says the number of outsourced jobs is still small. There are some four million call center jobs in the United States, compared to about 400,000 in India. What's more, she says, many companies are reluctant to take outsourcing too far.
Professor ROSEMARY BATT (Human Resource Studies, Cornell University): The pattern we saw is that companies tend to outsource simple transactions that involve repetitive work, such as credit card activation or telemarketing or simple retail-type sales.
ZARROLI: Batt says that in many of these jobs, workers are required to stick closely to a script so there's little risk they'll say the wrong thing. Batt says companies have been much more reluctant to outsource jobs that require more complex interactions, such as business to business calls.
Professor BATT: And even in the mass market, they keep in-house transactions that involve some level of complexity, and particularly transactions in which a service inquiry can be turned into a sale.
ZARROLI: Companies, she says, are simply reluctant to give up too much control over the call center process, and that is slowing the trend of outsourcing.
For companies that want to stay close to home and still save money, one alternative is a practice called home sourcing.
Mr. JOHN MILLER (Willow CSN Employee): And your email address is still the same?
ZARROLI: In his bedroom in Poughkeepsie, New York, John Miller is on the phone taking orders for a large office supply retailer. Miller was trained as a chef but now works for a company called Willow CSN, which contracts him out to other companies for call center work. He can do the job using his home PC and a separate phone.
Mr. MILLER: Well, you don't have to leave your house, you know. You don't have to worry about getting dressed for, all clothes for work and dry cleaning bills and food bills, and being stuck in traffic. And you can wake up ten minutes before you go to work, turn your computer on, grab a cup of coffee, and, you know, just go to work.
ZARROLI: When Miller gets lonely working by himself all day he can log on to a chat room for Willow employees.
The office supply company that Miller is answering calls for can listen in on him anytime it wants, so it can monitor his job performance. Angie Selden is CEO of Willow, one of a handful of home-sourcing companies that have opened in recent years. She says using home-based workers costs companies a lot less than building their own call centers.
Ms. ANGIE SELDEN (CEO, Willow CSN): First and foremost, there is a significant cost savings over internal call centers for companies in the U.S.
The second is that the quality of the people that we can attract is far superior to any bricks and mortar call center, whether its off-shore or whether its on-shore in the United States.
ZARROLI: Selden says there's a huge workforce of educated entrepreneurial people in the United States who live in rural areas or can't leave home because they're disabled or care for sick relatives. As long as they have a DSL line, she says, they can do call center work.
In the long run, many of these companies could still save more money by sending these jobs overseas. But companies like Willow are helping them cut costs without having to do that.
Jim Zarroli, NPR News.