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January 2009 | Volume 27 / Number 8
On The Line

Let the predictions begin!

By Tim Searcy

The speeches have been given, and the losers are licking their wounds and paying their debts. Everyone is a little sad that the great sporting event of the election season is once again over. However, the repercussions are just beginning to be considered. Although the inauguration of President Obama may have actually taken place by the time you read this, there is plenty we can still guess about this new administration. Let me join the cacophony of punditry with some political predictions of my own:




1. Minimum wage is going to go up. If re-distribution of wealth is the real stated and understood goal of this new administration, we can expect to see wage increases over the next several years. Although the money is going to be hard to find, government is going to expect “real wages” to effectively rise at least 15% over the next few years for those that are in the bottom quartile of the employed population. This means that we can expect to see a great deal of pressure to cut costs and decrease service levels in contact centers to manage for this expense increase. The push for higher wages will have the effect of increasing pressure to either send jobs offshore or to employ technology at a much higher rate. Either way, left to its own devices, those elements which increase cost are going to have the unintended consequences of driving employment in the contact center industry down in the United States.

2. Unions are going to enter the contact center industry in a big way. With 5.3 million employees in the contact center industry and a revitalized CWA emboldened with new union forming tools and powers, we would be foolish to think that this is not going to happen. Keep in mind that the new President of the United States took $80 million in campaign contributions from this constituency, and they are going to look for some payback. The Employee Free Choice Act is designed to make it very easy to organize a union and almost impossible to remove one.

3. A multitude of labor oriented pieces of legislation will be contemplated and probably passed. The next administration has made it clear that this is the era of the employee and not the employer. For this reason, we can expect very little meaningful discussion around balancing business and employee interests. A conversation I had with Chad Richter from Berens & Tate has gotten me scared right down to my socks. Chad is an expert in labor law, and he brought to my attention no less than nine pieces of legislation and regulation creation, which will make costs to operate a domestic contact center increase dramatically. Everything from the new American Disabilities Act modifications to changes in mandatory sick leave and new definitions for exempt versus non-exempt employees.

4. Consumers are going to enjoy unbalanced representation as well. Consumer protection is an easy segue from employee protection. For this reason, we can expect that legislation the American Teleservices Association (ATA) has been predicting concerning severe limitations on cross-sell, up-sell, and the use of the existing business relationship are going to be turned from idea to law.

5. The ATA’s petition for federal exclusive jurisdiction will be answered . . . and we will win! This is the hardest prediction to make, but it is probably the bright silver sliver in a cloud filled sky. Centralization of regulatory authority makes tremendous sense to an incoming government which feels that laissez faire and state driven regulation have been ineffective at curbing corporate abuse in almost every area of business. By centralizing authority, it will make regulation much easier to pass and implement. The sour taste you are experiencing is the knowledge that the decision to support exclusive jurisdiction will be for the regulators’ benefit, and not the industry’s.

6. Tax incentives and penalties for staying onshore versus going offshore will make little to no impact on the contact center industry. Other costs are going to be so much higher that we can anticipate a lot of contact centers will be forced to go overseas to maintain cost structures and ultimately competitiveness. However, we can expect to see the Lou Dobbs’ witch hunt over jobs going oversees in contact centers and other industries to reach a fevered pitch.

7. Everything is going to take longer than people think. Don’t get me wrong, many of the changes which will be hardest on our industry will come to pass quickly. However, the President-elect has to appoint not dozens, but literally hundreds of bureaucrats to positions. Many of these positions require Senate approval. For this reason, it will take until late in 2009 for enough dust to settle to even begin to consider what this is all going to mean to us.

What are we (the ATA) going to do about all of this? We are meeting in April in Washington D.C. to outline the strategy and define the steps necessary to create a partnership with decision makers and use what power the ATA Political Action Committee has created for us. If you would like to join us or contact me, please visit our website at www.ataconnect.org or send me an e-mail at tim@ataconnect.org.

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