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A Case Against Outsourced Call Centers


Those of you who know me, know that for well over 14 years, I worked in a call center in various positions.  From basic order entry, telemarketing, customer service, supervisory, claims information specialist, to technical support operator, I have done them all.  Now that I have moved to IT Support, I don’t do this type of work anymore, but I still do respect and stand up for our Call Center employees who put in sometimes long hours, angry customers, happy customers, and your garden variety of customers.   You can learn a lot about human nature working in call centers and one of the things you learn pretty fast is that speaking clearly and being articulate when on the phone are vital to understanding the customer’s reason for the call.   If your customer can’t understand you, this creates a barrier against you and reduces the overall confidence in what you can offer for them as a service or solution.

Today, I had to place a call in for technical support for our home theater.  It seems that Netflix decided to log us out of our application and we had to sign back in.  This happened before, but it was after they rolled out a major update to their interface.  This time around, nothing had changed.  I hit the manufacturer’s chat support and got someone with an American name who appeared at least on the chat to be articulate enough and speak good English, but within a few minutes, it was quite obvious that who I had actually reached was a foreign associate who was handling multiple chat questions at once and he quickly lost my trust and confidence when sending me links to products that were not mine as possible solution pages.  After explaining to him several times what the issue was and he never addressed, I left the chat and called the company.

When the person answered the phone, she gave an American name, but had a fairly thick accent.  Now, I have worked in call centers side by side with bi-lingual associates who’s native language is not English so this didn’t bother me or phase me.  But what triggered me pretty quick was her process of following her script.  “Okay, I understand that you are having trouble with your Netflix account is that right?”,  You do not hear this with American Call Centers usually.  I confirmed that was the issue but did go ahead and tell her again, the problem was with the sign in issue not the account.  She followed up with the same verbiage.   I explained to her that we do not wish to have to sign in every time or after a few weeks because as a general rule of thumb, I use long passwords which are quite difficult to enter on the remote let alone on a keyboard.  In this case, our password had upper case and lower case letters and numbers mixed in a preset length.  She ignored this fact and had me reset my device effectively logging me out of Netflix and other services I was signed into!  She didn’t understand my objection to this and basically didn’t tell me what she was going to have me do but blindly push a button which reset the device.  (BTW – if you have a Samsung Blu-Ray Player, you can apparently press and hold the STOP button for 8 seconds and reset it to factory.)   Total call time was about 10-15 minutes with her.

Let’s put this scenario now if I were to have reached an American based call center:

I would have entered the same question into their midst which was “I had to re-sign into my Netflix account on your device after a couple of weeks of signing in again, is this a normal thing with the player similar to a web site cookie time out?”  In response, I would have either gotten an answer directly, or the agent would have asked to put me on hold and researched the answer for me.    Total call time would have been roughly 1-6 minutes based on if the Agent knew the answer already or not.  This translates to cost savings in the long run.

A typical call center may spend anywhere from 4-5 minutes per call.  When they work the metrics out, factoring in the hourly wage of the employee, cost per minute of the call since they pay for incoming on toll free numbers, and the overhead (power, building lease, etc…), the call may cost anywhere from $30-$100 or more to the company for the 5 minutes.   When you combine this across multiple call center agents, things can add up, but they do balance out and costs per call can actually go down because you are now splitting the cost of overhead and so forth among not just one or two employees to 3-thousands of agents.

Outsourced call centers on the other hand will often charge a flat rate to the company outsourcing which can greatly decrease the costs associated with operation.  For example, I know first hand that a company charges $2000/month for their call center agents to take calls.  This is a fantastic rate, but there are hidden costs to this.

When you run a business you know that your customer is the boss and without them, you have no money to operate.  A successful business owner keenly knows that keeping a customer happy, means a repeat customer and a loyal one.  In order to this, most owners will do whatever is necessary to build the loyal customer base and generate return customers and referrals back to them for new customers.

A problem with outsourced call centers is there are often language barriers between the agent and the customer.  We all know that living in America, we have several different speaking styles, accents and audio cues which we easily understand because we were raised in this environment.   When you work with an Indian, South American, Philippine, or other outsourced center, they are not familiar with our speaking styles or accents in most cases.  I am fully aware though that many call centers outside the US are training their employees with our culture and speaking style.  Some even go so far as to train the agent to speak in an “American accent” as to gain our trust.  And would you believe that the very trainers of these things are Americans themselves?

When customers call an outsourced center, and reach the language barrier, there is often an instant feeling of frustration when being asked to repeat something or to confirm what they said.  This in turn can cause a once loyal customer to turn away from the company and move to a competitor.

Aside from these few points which I know are pretty weak at best, but still relevant, are still valid.  There is also a massive issue which I perceive to be the top one in my book with outsourcing work, and that is American Jobs are lost.  A company can literally save thousands if not millions by outsourcing, but in turn, they cause an impact on the economy:

Case in point:

ACME Company has an in-house call center and has an expenditure of $950,000/month on wages, benefits, call costs and overhead with 1500 call center agents.   The vice presidents and executives receive a tempting offer to outsource the call center duties to an international provider at a cost of $239,000/month with a “Proven track record of success”   A vote is taken and in favor of cutting costs to increase profits, they vote to move the call center operations overseas.

ACME Company now has 1500 call center agents who are now losing their job with a  severance package the company feels is nice and moves on to enjoy their savings.

1500 employees are now out of work and hitting the unemployment lines seeking benefits while they seek another job.  Some get a job fairly quickly while others take longer because of their limited skill set.  (Most call center agents are trained to be just that and nothing more).  Other agents will go to school to train.

During this time, the affected agent will not be able to pay their bills as readily as they used to because they no longer have the job.   The bill ends up being put off for a while to put food on the table and a roof over their head.  Luxury expenditures such as dining out, ordering in, drive up coffee, etc.. are no longer taken because of the lack of money.  Instead, enrollment in the country’s Food Stamp program proceeds, affecting tax payers.   Because the bill which was put off earlier will end up in collections or be put into an assistance program (depending on the bill), this in turn costs tax payer money as well in the long run.  If the creditor seeks a judgment, the tax payers pay.  If the agent seeks public assistance for a power bill or other utility from a Government agency, or non-profit, then that can affect the tax payers.  If a non profit is used, Government grant money is often  used to cover the costs.

Because of the agent not buying from places they normally would, this in turn lowers the business income for the companies  they would use and can affect the overall profit which may in turn cause layoffs due to lack of work.  You now have as a result of layoffs, new people out of work doing the same thing as our agents.

I personally believe the reason I just outlined above is one of the issues which caused our economy to collapse.  Employers lost money, they let people go, this caused a domino effect.  All of a sudden, more people were on welfare and losing their homes because they couldn’t pay their mortgage.  Next thing then was the collapse of the real estate market with a massive number of foreclosures which are still seeing today, but are also slowly recovering from.  Ask any seasoned real estate agent and they will confirm this.   Court costs associated with the foreclosures (Before a public court, would be paid by the public for the Judge, filing fee by the bank’s attorneys), maintenance of the property by the bank to keep things presentable to a prospective buyer, and more were often passed on to the buyer.

Other things have since happened, with the closure of major store chains due to bankruptcy from a lack of sales, increased costs in fuel, and more have caused a deeper collapse.

I am not claiming that outsourcing call centers caused this but I am saying that outsourcing certainly does not help the economy.


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