Publisher's Outlook

Will Contact Centers Boost U.S. Employment Again?

By Rich Tehrani, CEO, Technology Marketing Corporation  |  June 01, 2011

It was 1991. The U.S. was in the midst of a recession and economic development agencies worldwide started to court the editors of this publication to write articles about their locations as attractive places to start a new center. In that year, my fist article-writing assignment outside the U.S., in fact, was to attend an IDA Ireland (News - Alert) event in Dublin. At the time, call centers were seen as the perfect job creators, as the skills needed to work in them were limited. Moreover, they didn’t require massive amounts of water or electricity like the manufacturing space. You could drop them anywhere and they would just create jobs – sometimes by the thousands per center.

The one-two punch of IP communications followed by do-not-call regulations really killed employment in the space, as tens of millions of jobs flowed from the U.S. to the Philippines, India, Vietnam, South Africa, the Middle East and elsewhere. In the case of the do-not-call list – millions of jobs were killed overnight, but the problem was masked temporarily by a housing bubble fueled by the same government – assuring systemic unemployment once the housing and credit bubbles burst.

Now, with the U.S. in one of its deepest employment slumps in half a century, there may be a bit of good employment news as it relates to contact centers. You see, although contact centers are hiring at a nice clip worldwide – especially in India – in many parts of the world, the career path does not have the luster it once had.

In the U.S., a contact center job may be considered a few notches above being a cashier or so but, in other countries a decade ago, a call center job was something great to have and it was a fantastic career. What a difference a decade makes. With time zone issues – having to work nights to cover U.S. daytime callers and the challenges of communicating with a different language utilizing different slang and growing hostility regarding India call center agents – it seems working in a contact center is no longer the prized job it once was.

In a recent video interview, Dan Boehm, VP of Sales & Marketing at Spectrum (News - Alert) Corp., told me Indian contact center costs are skyrocketing and attrition is very high. He just returned from the country before our interview and quoted attrition rates as high as 60% and wage inflation on a yearly basis as high as 20%. These challenges are obviously affecting profitability and Spectrum is using this opportunity to sell more of its agent efficiency tools to Indian and other contact centers so they can remain viable entities. He mentioned that his business is also growing in Singapore and the Philippines because contact centers are looking for new low-cost countries to expand into.

In another video interview, Mary Murcott, CEO of Novo 1 Contact Centers, a call center outsourcer with 1,600 US based agents, said her business is to bring outsourced jobs from other countries back to the U.S. with a claimed cost savings of 15% over India or the Philippines. Murcott says she has seen attrition rates of 140-150% as agents would go across the street for a dime more.

She went on to say that customer satisfaction rates and first call resolution rates are up to 20 points lower in India than the U.S. because, just as domestic callers have a tough time understanding agents, agent, too, have a tough time understanding us.

Ten years ago, I started a website called because I wanted the government to put a stop the flood of jobs leaving the U.S. I soon realized I was extremely naïve and, if U.S. companies didn’t use cheaper labor, companies from other countries would and, in doing so, would wipe out the American companies that would not be able to compete. Instead, I realized the global standard of living needed to increase for it to become less attractive to send jobs outside the U.S.

The good news is the process is well underway and, not only is free market capitalism helping to make the tide rise around the globe, over time it is building future generations of middle-class families who, in turn, will buy more products – whether they be movies from Hollywood, wine made in France, iPads, or cars made by Ford.

A decade ago, I was certainly concerned about the future of the U.S. contact center market. While it is early to predict a massive influx of new U.S. jobs in the sector, global wages are beginning to increase to a point where it is starting to make sense to not only keep the call center jobs in the U.S., but it may make sense to bring many of them back to where they began.

Rich Tehrani is CEO of TMC. In addition, he is the Chairman of the world’s best-attended communications conference, INTERNET TELEPHONY Conference & EXPO (ITEXPO (News - Alert)). He is also the author of his own communications and technology blog.

Edited by Stefania Viscusi