Prol-Position analyse trends in the movement of call centre jobs around the world as employers seek the lowest labour costs.
2) The situation in countries of origin: USA, UK, Australia
3) General situation in destination countries: India
4) Same procedure as everywhere: wage pressure and turnover
5) Short stay in India: relocating further
6) Sex and violence: last, but not least some good news
The following should provide a general overview of the global re-location of call centre jobs. So far most of the (union) initiatives and answers to the question of re-location were constrained to protectionist and/or nationalist campaigns for the ‘defence of our jobs’. We can recall the ‘Pink Elephant’ campaign of the English CWU (Communication Workers’ Union) when British Telecom made an announcement to slash jobs in the UK in order to shift them to India. There are several racist campaigns in the USA calling for abusive behaviour when talking to an Indian or Philippine call centre agent. We don’t criticise the fact that workers fight against redundancies and threats of relocation, like at Wanadoo in France, when the management planned to shift work to Morocco (see article on call centre struggles in France). But it is all together a different thing if unions try to conjure up nationalist sentiments, talk about ‘British quality’ and similar stuff, as part of a populist campaign which didn’t hurt the bosses at all. There have only been a few campaigns where activists tried to break down the national perspective of their unions, e.g. when a US-delegation of unionists visited colleagues in India or campaigns of Spanish and Argentinean activists, when Telefonica tried to play workers off against each other.
The rapid development of the call centre relocations means that they also serve as proletarian case studies on how the conditions change in the country of origin and in the destination country, how capital adapts to different situations, and how workers find new ways to struggle as well. As we will see, within a short period capital had to face up to the same basic problems in Indian call centres as it had to in the UK: a high turnover of staff, increasing pressure on wages from below, first (violent) reactions of workers against the undignified working conditions. Capital’s reaction shows its intrinsic limitations, as it further migrates from the big cities to smaller ones, from India to Pakistan and the Philippines, in order to start the same cycle again, but at a higher pace.
The situation in the countries of origin: USA, UK, Australia
Since the late 90s, as a result of the crisis in the IT and financial sector, a lot of companies cut jobs and/or relocated them abroad. This process still continues. Following some recent examples of companies who shifted their call centre work to India or the Philippines:
* Datamonitor predicts that more firms are set to follow the likes of British Airways, Citibank, General Electric and HSBC, all of which have spun off a part or all of their operations to India. [Datamonitor - 21st of March 2005]
* 350 call center jobs to go at British Gas: British Gas workers in Oldham have been told 350 of them will lose their jobs because a new £430 million computer system can do their work better. The clerical, administrative and data processing jobs at the Higginshaw Lane site will be shed in the next 12 – 18 months because workers have been made obsolete by the new technology. The company is considering transferring any remaining clerical work that cannot be done by the computer to workers in India. [www.oldhamadvertiser.co.uk - 21st of July 2005]
* British Gas goes India: Recent reports that British Gas (BG) plans to axe 2,000 jobs in the Kingdom, out of which about a 1,000 including “back office” jobs, would move to India, have spread panic among workers, especially in Manchester, where four BG offices are located, according to newspaper reports there. Interestingly, in their anger against offshoring jobs to India, trade unions are making much ado over the data protection issue. Though not overt, the reference surely is to the recent Indian call centre case where a British reporter was said to have got hold of classified data by offering money to an Indian employee. According to Unison, British Gas plans to move backroom work to India where the company claims they can make a 400% saving in operation costs. [www.financialexpress.com - 21st of July 2005]
* IBM shifts jobs from USA to India: Even as it proceeds with layoffs of up to 13,000 workers in Europe and the United States, IBM plans to increase its payroll in India this year by more than 14,000 workers, according to an internal company document. [The New York Times - 8th of July 2005]
* NAB shifts call center jobs: NAB outlined the plans to axe 4,200 jobs from its Australian and UK operations as it revealed its half-year financial results. This would affect 10 per cent of its global workforce. Yesterday, Abbey’s new Spanish owner said it would cut 4,000 UK jobs following its acquisition of the bank, rather than 3,000 as first envisaged. It said the staff affected by today’s job losses were “victims of offshoring by proxy”. The claim was denied by Lloyds TSB, which announced last year it intended to have 2,500 staff in India by the end of this year. [The Times - 12th of May 2005]
* Dell adds 2,000 more staff in India: Dell plans to increase the number of staff at its Indian call centre and software development operations to 10,000 by the end of the year, the company’s president and chief executive officer (CEO) said Friday. Dell currently employs about 7,000 to 8,000 staff in India, Dell President and CEO Kevin Rollins told reporters during a visit to Bangalore. [IDG News Service - 2nd of May 2005]
* Call centre operator Sykes Enterprises shrank its U.S. operations and last year added close to 10,000 call centre workstations in Costa Rica and the Philippines. [Times Business - 2nd of May 2005]
It’s obvious how capital uses and creates patches of regional (under-)development, in order to recompose the conditions of exploitation. The call centres in the USA, the UK or other western countries had been praised as the alternative mass employment for de-industrialised regions, such as Leeds, the Ruhr area, the mining regions in the US. Low wages due to high unemployment and a work-force shaken by years of crisis attracted the call centre companies. The following summary of a Los Angeles Times article shows clearly the political content of capitalist (under-)development:
Clintwood, Va. - This remote Appalachian town doesn’t get many visitors, but every day it sends thousands of travellers on their way. If you buy an airline ticket off the Travelocity website and need to call with a change or a question, the phone rings here. The Travelocity call centre brought 250 jobs to a community wounded by the decline of coal mining, its mainstay for a century. It plugged the town’s 1,500 residents into the global high-tech economy, offering the prospect of a secure future. That illusion crumbled last month when Travelocity fired Clintwood, saying it would close the call centre by year-end and move all the jobs to India. (...) Opened fewer than three years ago, the centre is the largest private employer in the county. (...) The call centre clerks in Clintwood start at $8 an hour. In India, their replacements will earn less than a quarter of that. (...). More than a quarter of the 2.25 million call-centre jobs in the U.S. are expected to go offshore. (...) Until recently, Appalachian towns such as Clintwood were an outsourcing destination, not a victim. Companies that wanted to cut costs could hardly find a cheaper place in America. With that salary of $8 an hour plus benefits - something almost unknown in these parts for entry-level jobs - Travelocity had no trouble attracting employees. (...). In a financial document announcing the call centre’s closing, the company said it had been trying to cut costs but “attrition levels” were a big reason it wasn’t successful. “It was $4,000 in training every time we hired someone new,” Peluso said. “Many people made the economics tougher by choosing not to stay with Travelocity.” Did Clintwood, then, fail Travelocity? The call-centre workers acknowledge that many new hires worked briefly and quit, unable to endure the cranky customers and strict regimen. Suddenly, $8 an hour didn’t look that good. (...) The joke among the town’s citizens is that the only secure jobs are at the new state prison, because they’re not going to be shipping the convicts to India anytime soon. There are several new lockups around the county, which a lot of people have mixed feelings about. “It’s not quite as bad as being a nuclear waste dump site,” said John Clay Stanley, director of the Dickenson County Chamber of Commerce (news - web sites). (...) Fifteen years ago, the primary employer in Dickenson County was Pittston Coal. Like Travelocity, it was losing money. So Pittston cut benefits for retired miners and their widows. The miners responded by walking out. Hundreds were arrested for civil disobedience. Violence flared as the strikers punctured tires on coal trucks. The strike lasted nearly a year, the bitterness far longer. “The situation with Pittston was physical,” said Will Mullins, 22, a Travelocity operations manager. “We could block the roads and block the trucks, and there was no way they could get the coal out. But there’s no way to block the Internet. If we tried to do a strike, they’d just ignore us. [Los Angeles Times - 28th of March 2004]
That the practical difficulties of fighting company closures and the nationalist perspective of most of the unions result in the ugliest forms of workers’ response is documented in the following note from the net:
I made an Indian woman cry and promise to quit her job in 60 seconds. You can do it too! I have inside knowledge of call centres, having worked in several. It’s crucial that the agents be efficient. Barraging them with 60-second calls will ruin their stats and also lower their morale. Eventually, they’ll start thinking ‘another damn rude American a******’ every time a call comes up. All of this will have a cumulative effect. If 100 people across the US would commit to spending 10 minutes a day, we could cripple them, and bring those jobs back to the US.
This is only a random (and printable) selection from the thousands of messages in cyberspace calling for a campaign to harass Indian call centre operators, to put an end to the offshoring of jobs. In the last few months, and particularly since the US presidential elections, people working in call centres in the country say that they are receiving more abusive and racist phone calls than ever before.
‘Earlier, people would get abusive if we didn’t answer their questions satisfactorily. Now, I get calls-on some days up to five a shift-from people who are calling only to abuse,” says Shalini J, a 22-year-old engineering graduate who works in a major call centre in Malad.’ [www.callcentres.net]
Facing that kind of response it is wonderful to know that even working class racism can be turned into profitable business. Advert on the net:
American English Accent. Hello, we specialize in training in American English accents. We are based in San Francisco, USA. Our trainers are licensed speech pathologists with a Master’s Degree or Ph.D. Our trainers will come to your call centre! Over 20 years of experience, with companies and call centres in the Philippines, Korea, and South America.
Examples of cross-border activities are rare, but even high up in the union bureaucracy the more clever functionaries can see the necessity of understanding the situation in the destination countries. Although we can expect that the union rep’s comments on the situation in Indian call centres is partly due to the selective policies of the Indian companies inviting him and the populist attitude of union officials, it nevertheless indicates a global standardisation of working conditions:
Call centre professionals in India are well taken care of by the employers, compared to the US, where the workers were treated as a “commodity”, said an official of Communication Workers of America (CWA), the largest workers union in the US. “The call centre environment in India is much better. In the US, the employers are not considerate about the workers. They treat people as a commodity,” Steve Tirza, President, CWA, who was in Chennai along with other members to have a first-hand understanding of the call centre and IT industry in India, said. In the US, about 8 per cent of the people in call centres report sick, per day, Hicks said. [The Hindu - 23rd of June 2004]
Another, probably rather symbolic cross-border action took place during the recent strike at the HSBC-bank. Nevertheless the action has got some significance given that HSBC has been in the news due to it’s plans to relocate work to India:
Thousands of HSBC workers will stage a nationwide 24-hour strike tomorrow in a dispute over pay, the biggest industrial action against a leading bank for more than eight years. The bank said around 10,500 of its 55,000 workers belonged to Amicus so it expected most of its employees to be in work. The union claimed that 10% of staff will receive no pay rise this year and a further 45% will be given an increase below the rate of inflation. Amicus claimed that HSBC workers in India staged a protest today in support of the UK workers. [news.scotsman.com - 27th of May 2005]
Situation in the countries of destination: Canada, India
A main destination of outsourcing US-companies is Canada, where the call centre sector was still booming during recent years, unlike in the US or Europe.
The StasCan report’s main finding is that Canadian business support services registered “unparalleled growth” between 1987 and 2004, driven by the adoption of new information and telecommunications technologies during the past two decades. Business support services workers, who mostly work in call centres, numbered 112,000 in 2004, up from 20,000 in 1987, according to the report, entitled, “Who’s calling at dinner time?” The sub-sector’s growth rate of 447 per cent well outstripped that of the service sector (37 per cent) and the overall rise in employment in Canada (29 per cent), over the period studied. Wages in the industry were also lower than in comparable service industries, contributing to above-average turnover. In 2004, the average pay was $12.45 an hour, compared with the service sector average of $18.10, and the overall average of $18.50, the study found. Some 85 per cent of workers left their jobs after five years or less, compared with 55 per cent for all service industries and 53 per cent for all industries combined. [www.cbc.ca - 25th of May 2005]
The other main target country for US call centre services is India. In India call centre work and work in the IT sector in general is done by a comparatively tiny fraction of the total work force; to be exact, by about 0.2 percent. In most cases the people working in these jobs have a middleclass background and they went to university. In a country with half of the population still malnourished and illiterate, and with only about four per cent of its households with telephones, these jobs can be sold as a privilege, as a present from the developed world. The call centre companies praise the advantages of India for the international outsourcing process:
* India is the largest English-speaking population after the USA, has a vast educated workforce, the manpower cost is approximately one-tenth of what it is overseas. Per agent cost in USA is approximately $40,000 while in India it is only $5,000. [‘Outsourcing’ - 7th of February 2004]
* Average call centre salaries in the UK are about £12,500 ($22,000) a year, compared with £1,200 ($2,100) in India. [BBC - 11th of December 2003]
* In India, the influx of jobs has produced a community of young, single Indians who have traded the frugal lifestyle of their parents for extravagance. Sadhana Pasricha, a business and sociology professor at Goldey-Beacom College in Pike Creek, Del., recently visited India and said she was surprised by the trendy shops and bars in big cities, as well as the young people she met. Leaving home for a better life is no longer necessary. “In one generation, they’ve become a global generation,” Pasricha said. [www.tucsoncitizen.com - 14th of June 2005]
We haven’t found much material on the actual working conditions in Indian call centres. The following study is likely to be very biased, given the particular interests of the client, the British bosses and unions. Both are eager to show the ‘special quality’ of the British call centre performance. Nevertheless the survey might provide some hints:
The research carried out by ContactBabel on behalf of the DTI (Department of Trade and Industry) found that UK workers answered 25 per cent more calls than Indian staff and resolved 17 per cent more queries first time. While Indian workers answer the phones more quickly, researchers found their calls last longer, possibly because of language or cultural difficulties. Moreover staff turnover at Indian call centres is worse than at UK operations, with Indian graduates only willing to stay in a job for an average of 11 months, compared with three years in the UK. But the report also revealed that overseas call centres are cheaper to run as Indian workers are paid less than 12pc of a typical salary of their UK counterparts. The report said the average starting salary for a worker in India is just £1,500 a year, compared with £13,000 a year in the UK. Steve Morrell, author of the report, said the difference was a “shock,” especially as Indian staff typically worked six hours a week longer than those in Britain’. “We already know the answer to any survey that the government has commissioned and so do the British consumers,” said David Fleming, the national secretary of Amicus. “Services will suffer, cost savings will not be transferred to the consumer, poor business decisions will be made in pursuit of short-term cost savings and company brands will be damaged by outsourcing.”’ [BBC - 12th of February 2005]
In India the first public criticism of the call centre jobs emerged, declaring that the jobs aren’t steps towards development, but rather an extension of the sweat-shop policies in a different form.
* About 85 per cent of Indian BPO work is handling calls, but this category accounts for less than 10 per cent of work outsourced globally. So you can’t build a sustainable future on such a narrow global base. [The Telegraph - 20th of April, 2005]
* The huge growth in India’s call centre industry was highlighted again last week, as British company Norwich Union announced they would be cutting 2,350 UK jobs and relocating them. But author Praful Bidwai said that in effect the centres reduced the young Indian undergraduates to “cyber-coolies.” “They work extremely long hours badly paid, in extremely stressful conditions, and most have absolutely no opportunities for any kind of advancement in their careers,” Mr Bidwai told BBC World Service’s One Planet programme. “It’s a dead end, it’s a complete cul-de-sac. It’s a perfect sweatshop scenario, except that you’re working with computers and electronic equipment rather than looms or whatever.” [BBC - 11th of December 2003]
And of course it is possible for the British to get their jobs back, they just have to relocate themselves:
In a new twist to the outsourcing of call centres saga, UK graduates and backpackers are being employed by UK firms to work in offshore Indian call centres on Indian salaries. These backpackers can work in call centres in India supporting UK customer service operations and earn between Rs 11,000 (200 Euros) a month at entry level to Rs 40,000 (720 Euros) a month as team leaders. One such agency Launch Offshore, has signed a deal for a pilot of six travellers to work for HSBC at its offices in Bangalore, Hyderabad and Colombo in Sri Lanka. [BBC - 29th of April 2005]
If a report in the Sun is anything to go by, up to 40,000 Britishers could end up working in metros like Mumbai or Bangalore in the near future. Quoting industry experts, the tabloid said that sectors like insurance, banking and phone firms had in the last year shifted their operations offshore to inexpensive countries like India as a wage-cutting measure. Last year, 14,000 jobs were lost. According to the experts, the call centre employees from Britain could expect to earn between £1,800 and £4,500 annually. [www.siliconindia.com - 17th of June 2005]
Wage pressure and Turn-Over
It is interesting to see that parallel to the acceleration of capital’s movements the workers’ response also speeds up. For example, the relocation in the car industry from western countries to the new developing countries such as Brazil, South Korea, South Africa didn’t take place much earlier than the 1980s. And it took a while before workers created a wage pressure similar to the one in the countries of origin. With call centres we can see a similar pattern, but due to their very nature there is an acceleration of the whole process. The following news items question the picture of contented and industrious Asian workers who are supposed to happily welcome any old low-waged job from western companies.
* An annual attrition rate of 50 per cent plus is par for the course and a company that boasts of an attrition rate of 30 per cent struts about like a prima donna. So the situation is somewhat like what prevailed in the software industry during the period of the tech bubble - more orders than what you know how to cope with. The attrition is forcing BPO companies to pay more. Wages have risen so quickly in India that it’s not much cheaper than Canada as an offshoring location. [The Telegraph - 20th of April 2005]
* Indian call centre attrition nears UK levels: The Financial Services Authority (FSA) has found that the staff turnover (staff attrition) at Indian call centres was approaching that in the UK, and that managers were demanding comparable wages to their UK counterparts. The study, conducted by the FSA into the impact of the increasing numbers of financial companies that have moved call to lower-cost economies, primarily India, says that the growing number of UK companies setting up centres in cities such as Mumbai and Bangalore was creating intense competition for staff, making them unlikely to stay with a company for more than a few months and forcing up wages. [The Times - 9th of May 2005]
* Indian back-office firms face a growing challenge holding on to employees, even as they hire tens of thousands every quarter. Staff tend to account for half of a back-office operation’s costs, according to research firm Evalueserve, and the battle for talent has led to a 10-15% rise in employee salaries. Recruitment and training makes up 3% of the overall per-employee cost of about $13,000 per year, including administration and telecoms costs, according to Evalueserve. But the really damaging cost is the lost business for companies which cannot fill key jobs quickly enough. Many face a shortage of mid-level manpower to manage their rapid growth as they lure clients with promises of 40% to 50% cost savings. As the industry clocks up 50%-plus growth, demand for quality personnel is outstripping supply. Employees often hop to new jobs for slightly more money, and many do not view back-office work as a career. Companies provide free transport, subsidised meals and housing to retain staff, and try to enliven the environment with musical entertainment, yoga classes and costume contests. [The Hindu - 08th of July 2004]
As a consequence of wage pressure, soaring real estate prices and labour shortages, capital keeps on moving further abroad and/or towards the smaller cities in India.
“Because of the fact that the demand for call centre executives is increasing day by day, the supply from Delhi is getting lower and lower,” “What we have done is to... move into smaller towns. Over the last three months, almost 60% of our total hiring has been done through these outstation offices.” [BBC - 11th of December 2003]
Apart from relocation as an answer to rising wages, we also read more and more about technological experiments in India itself to substitute the work-force with high tech.
From low-end call centres to high-end software development, Indian companies are seeking innovations to help them combat the threat of new entrants to the market in countries like the Philippines. One approach has been to offer higher-value services, like business consulting or providing for a company’s full range of software needs. Less well-publicized is a determined attempt to retain low-end operations, even while expanding beyond them. The strategy is to transform operations like call centres from labour-intensive, cost-cutting shops into technology-intensive operations offering speed and quality. At a Tata Consultancy research centre in the western city of Pune, researchers are developing artificial intelligence software that, once perfected, would be able to sift through a company’s millions of e-mail messages, memos and other documents to detect and formalize knowledge that the company may not know it possesses. Tata Consultancy Services says such software could drastically reduce technical-support calls by automatically gleaning from call transcripts which problem keywords correlate with which solutions. “We can transform the whole call centre - the way it looks today,” said Subramanian Ramadorai, chief executive of Tata Consultancy. With “automated software engineering tools,” he said, “if you’re deploying 1,000-people voice-activated call centres, tomorrow you may say you can do the same thing with 10 people.” [www.iht.com - 27th of May 2005]
All in all various sources already speak about the end of the call center boom in India:
The End of Call Center Entrepreneurship in India: Gartner Inc. released an astonishing report that said, “As many as 70% of the top 15 Indian business process outsourcing start-ups will cease to exist in the coming months.” Gartner added scathingly that, “despite the hype, only a small fraction of customer service outsourcing will be done at offshore locations.” Margins in the call center sector have declined steadily over the past couple of years, as customers demand lower bill rates and agents insist on higher salaries. The result has been a squeezing out of the smaller (and often newer) operators, which are unable to spread their fixed costs over a larger base of revenue producing agents. Throughout India and the Philippines, there has already been significant rationalization (i.e. closings, buyouts, mergers, etc.) in the call center industry, and Gartner is probably right to say that more are to come. [www.indiadaily.com - 8th of July 2005]
Indian companies only managed for a very short period of two or three years to establish themselves as low wage alternatives for international capital. The workers’ response quickly crushed this image. As a reaction countries like the Philippines, Pakistan, South Africa enter the agenda. Often cheap explanations are brought up in order to disguise the fact that these countries are only interesting for capital because of the ‘virginity’ and low wages of their workers. The Philippines and partly Pakistan are declared to be more interesting because of the ‘Americanised’ culture and foreign policies. This argument refutes itself, given that jobs are already relocated from Manila towards the countryside, due to lower rent and wages.
A recent survey by the Singapore-based ACA Research and Michigan-based Fortune 500 staffing firm Kelly Services, seems to says that the Filipinos are steadily progressing in the BPO business and may outsmart the Indians soon. While an Indian BPO agent is likely to remain sick for 15 days every year, Filipinos manage with only 8 sick leaves per annum. They are also more loyal. While your next door BPO guy spends less than a year (11 months) at a BPO, his Filipino counterpart spends 19 months on an average in a company. The Philippines is the third largest English-speaking country in the world. About 72 per cent of the population is fluent in English. The Philippines has one of the highest literacy rates (94 percent) in the world. The US military rule had also laid a strong base to the country’s telecom infrastructure. The country was under the US rule from 1898 until 1935. It’s interesting that in the case of India also the British rule had helped in giving a huge popularity to the English language. Canada and Ireland are also benefiting from their language skills to advance their outsourcing business. Mexico, which was under Spanish rule from 1521 to 1810, has bagged a huge chunk of Spanish voice processes from US. In the Philippines, similarity in legal and tax framework with the US has eased the administrative bottlenecks for the American firms setting captive BPOs there. Chevron Texaco, AOL, P&G, Accenture and Dell have set up centres there. Major BPO hubs in the Philippines are Manila and Cebu City. Currently, there are about 100 call centres in the country. Companies such as HSBC, Dell, AIG and UPS have all outsourced their business to the Philippines. [www.callcentersindia.com - March 2005]
Apart from the more or less interesting info, we also liked the headline of the following article, which clearly confirms our thesis:
* Philippine call centre boom spreads beyond capital: Faced with rising wage costs as the pool of qualified candidates in Manila and central Cebu empties, outsourcing firms are moving to parts of the country that are still rich in English-speaking graduates willing to work for 12,000 pesos ($220) a month. In Baguio, 120 miles north of Manila, more than a third of the 300,000 population are students. So far there is only one call centre, run by ClientLogic Corp., a unit of Canadian firm Onex Corp. “It’s a gold mine,” said Ramon Dimacali, head of industry group Outsource Philippines, who sees benefits beyond pay rates that are a third lower than Manila’s for the same caliber of graduate. “There’s definitely higher loyalty, less attrition, less churn,” he said. But there are signs the boom, a rare bright spot for the indebted economy in recent years, could soon start to run up against the shortcomings of an underfunded education system, poor infrastructure and a limited labour supply. Bangalore in India alone churns out nearly as many graduates each year as the 400,000 produced by the whole Philippines. “We’re facing a hiring crunch,” said Carol Dominguez, president of recruitment firm John Clements Consultants. “You’re losing more people than you can hire. Call centres have to figure out a retention strategy.” In 2001, there were only about six countries seen as serious competitors for the outsourcing dollar. Now there are about 30, with eastern Europe, China and South Africa among them. London-based research firm Datamonitor said in a February report that the Philippines was a strong competitor to India for the nearly 250,000 new call centre jobs expected to be created in the two countries through 2009. The Philippines now has around 60,000 outsourcing jobs, compared to 245,000 in India, according to Datamonitor. [Reuters - 12th of May 2005]
* The Philippines has a bright spot in the call centre industry that generated jobs for more Filipinos. From 1,500 seats in 2000, the industry is growing by 20,000 a year and is expected to reach 60,000 by the end of 2005 with almost $1 billion in revenues. But we still have to do a lot of work to catch up with India’s 150,000 seats. [www.mb.com.ph - 22nd of May 2005]
* British bank HSBC opened a 2,000-seat global centre for backroom service in Manila’s Alabang suburb. The 185,000-square-foot facility at the Northgate Cyberzone will be the permanent site for HSBC’s eighth global centre. The bank operates similar hubs in China, India, Malaysia and Sri Lanka. The HSBC hub employs 1,300 people and is expected to hire 2,000 this year. It handles call centre operations, mostly credit card customer care services for the bank’s clients in the United Kingdom and United States. It will soon serve the HSBC group’s desktop publishing requirements. Jebsen said it was more expensive to put up such a facility in India than in the Philippines, but less expensive than in China. The average investment for call centres in the Philippines ranges from $3,000 to $6,000 per seat. [money.inq7.net - 15th of June 2005]
* Philippines: National Labor Code changes to boost call-center sector: To boost the country’s thriving business process outsourcing industry, a senior member of Congress has sought the immediate repeal of an old-fashioned Labor Code provision that bans the employment of women at night. “The absolute legal prohibition against night work for women has become totally obsolete, irrelevant and inapplicable,” Rep. Eduardo Gullas of Cebu said. At present, Gullas said local BPO service providers, including call centers that employ mostly women, cope with the prohibition through the tedious process of seeking an express exemption from the Department of Labor and Employment. Since they have to deal with clients in various time zones, local call centers have to operate in up to three shifts 24 hours a day. [news.balita.ph - 30th of June 2005]
* Do the Loop: Philippine call center company outsources to the USA: The Philippine company that acquired Scottsdale-based Phase 2 Solutions last year has opened another call center in the Valley and is hiring up to 800 new employees. According to the company’s Web site, most of the agent positions start at $9 an hour with opportunities for performance-based bonuses. ETelecare Global Solutions, which is a contract call center, now has three call centers in the Valley employing about 1,600 workers. Because some of the 800 new jobs have already been filled, the total employment in the Valley by eTelecare will eventually range from 2,200 to 2,400, making it one of the largest call center employers in the Valley. [The Arizona Republic - 30th of June 2005]
Pakistan is trying to copy India’s success in luring IT work, but it’s slow going: Think software and services outsourcing, and places like Bangalore, Manila, and perhaps Budapest spring to mind. But Lahore or Karachi? The country, after all, shares India’s British colonial history and has some 17 million English speakers. It has a huge community of émigrés with experience in technology. And like India, it has a culture that values education and hard work. Wages, meanwhile, stand at about the same level as in India, with call centre workers earning about $12 per day and starting software engineers pulling in $5,000 or so annually. Lower-level operations such as call centres are expected to grow even faster: Some 120 centres have opened in Pakistan in the past two years. Today they employ 3,500 people, and that number is expected to grow by 60% a year. Arwen Tech, a Karachi company that runs a 600-seat centre, saw its sales double last year, to $10 million, serving clients such as Pakistan International Airlines and the local franchisee for KFC Corp. (YUM!). [www.blogsource.org - 25th of May 2004]
* Africa: another English-speaking nation moves ahead to challenge India in call centre market. An initiative supported by the national and provincial governments in South Africa to lure call centres of multinationals to this coastal city could impact on India’s huge role in this field. One of the main reasons that could see South Africa getting an edge over India was the stability of the communication network in South Africa. He said India sometimes had communication breakdowns that left multinationals with a concern over downtime. Supported by the Western Cape provincial government as well as the national ministry of trade of industry, the call centre industry in Cape Town is expected to grow exponentially with the number of jobs created expected to increase to more than 1,000 within the next three months from just 60 two years ago. [BBC - 17th March 2005]
* South Africa has “many of the same assets as India,” Bell says. It has an English language heritage; high quality education; relatively low wages and excellent political and business infrastructure. More than 200 call centres operate in Cape Town alone. [www.informit.com - 17th of June 2005]
* Research from independent market analysis firm Datamonitor (DTM.L) concludes that the fear of job losses from the US to Latin America is much ado about nothing. “According to Datamonitor, the Latin American call centre market is the fastest growing region in the world, spearheaded by Brazil, Mexico and Argentina. Currently it has over 336,000 agent positions in 5,100 call centres. [TMCnet.com - May 25, 2004]
* Despite having a population of just 4 million people, a recent outsourcing contract through Hewlett-Packard has elevated Costa Rica’s role as a central figure among Central American and Caribbean outsourcing nations. While the nation’s outsourcing ventures are still stymied by bureaucratic complications like ICE, Costa Rica’s telecommunications monopoly, some managers are starting to view the nation as a growing centre for alternative outsourcing. InformationWeek Reports: While the country has the obligatory call centres and tech-support operations, it has begun to carry out some imaginative tasks, too. Costa Rica is the land of coffee--they call it “grains of gold.” Appropriately, a local IT company has developed a computerized solution for sorting the precious beans. The firm, Xeltron, is now working to develop the solution to sort rice and it sees a potential global market therein. [FT - 23th of April 2005]
Jerusalem becoming call center capital: When American entrepreneur and philanthropist Howard Jonas visited Jerusalem during the peak of the intifada he was overwhelmed by how many unemployed people there were, even among the most highly educated. He decided to go beyond charitable donations and in the summer of 2002, launched IDT Global (formerly CSM), a Jerusalem subsidiary of his Fortune 1000 company, IDT, the fourth largest telecom provider in the US. He found 20 Jerusalemites formerly from the US who grew up amid American culture and manners, and put them to work. The call center serving the US, Canada and western Europe grew rapidly from 20 to 650 employees - skilled and educated workers - and word got out around the immigrant community that having a mother tongue in a language aside from Hebrew in Israel did not have to be a professional handicap. “There’s no doubt that Jerusalem is the optimal place for American and European companies to outsource their work. There’s a huge brain resource here from North American and European immigrants that provides unequaled source of manpower,” he told ISRAEL21c. “We’ve drawn people from all manners of experience and professional lifestyles, not to mention the multilingual capabilities that are available.” A selling point of SUJ to potential foreign investors, as documented by the report, is that labor costs in Jerusalem are 40-60 percent lower than in the US or UK, for example, but services are skilled, unlike India, where labor is cheap but low-tech. Other advantages include an unusual labor force, with mother-tongue fluency in a vast number of languages, including English, Arabic, French, Spanish, Russian and German. SUJ is also manned on staff and board by Jews and Arabs from around Jerusalem. “Arabic plays a strong role,” says Khazdan. “Egypt is not going to outsource in Israel, of course, but Europe has a growing number of Arabic speakers.” “First of all, there’s an abundance of North American and European professionals in and around Jerusalem who have decided to make Israel their home. Seventy five percent of these immigrants are college graduates - it’s a well-educated workforce and a huge resource for us,” said Barnett. “Israel ranks better in terms of political stability than India, the Philippines, South Africa, Mexico, China, Brazil and Romania. We have big companies like Intel and IDT, and the political situation doesn’t affect them at all... I think [even] Catalyst was not expecting to find that Jerusalem was so suitable for ‘world class’ business outsourcing, in terms of the standards of technology, infrastructure, management and labor force.” [www.israel21c.org - 10th of July 2005]
Eastern Europe and Others
* The calling centres are on their way out in India, Friedman (New York Times columnist) maintained. “They are going to move to Mauritius, they’re going to move to Egypt, where they have a call centre of 1,000 people now that works for Microsoft. That’s a call centre that would have gone to Bangalore five years ago; now it’s in Cairo. So the low end is going to migrate.” [news.pacificnews.org - 6th of June 2005]
* The trend is toward “more offshore activity in countries besides India, such as some of the smaller players like the Czech Republic and Malaysia,” Pau notes. Moreover, she adds, there is likely to be a farther eastward push within Eastern Europe, to countries such as Romania and Bulgaria, as work spills over from places such as the Czech Republic and Hungary. In the ebb and flow of the BPO sector, one country - Ireland - appears to be ebbing. Ireland, host to call centres in Dublin, has become saturated and is seeing wage and other cost increases. That may not be the case in Northern Ireland, where India’s HCL Technologies BPO Services recently says it was adding 400 jobs to a call centre it operates in Belfast serving European clients. HCL acquired the call centre from British Telecom in 2001 and already employs 1,100 people there. An HCL official cited Northern Ireland’s favorable “cost base” as one factor in his company’s decision to expand the call centre. One BPO contender in Europe that is taking direct aim at Ireland is the Czech Republic. CzechInvest, an arm of the Czech Ministry of Industry and Trade, notes that the average salary in shared-service centres in the Czech Republic is less than one-third the salary for comparable positions in Ireland. Overall costs in Prague are less than half of those in Ireland. [www.informit.com - 17th of June 2005]
Sex and Violence
Last, but hopefully not least, some good news concerning the fundamental driving forces of society:
* 3 cops injured in Mumbai call centre violence: The ongoing dispute between the employees’ union and management of a call centre in Mumbai turned violent on Monday with three police constables being injured in the resultant stone-pelting. According to police sources, the employees’ union and management of Hope India Ltd., a call centre in Saki Vihar in suburban Powai, were at loggerheads with each other and about 400 employees were on strike for the last few days. The dispute took a violent turn today as the management allegedly manhandled the employees. Fearing the situation worsening, a local resident called in the police. As soon as the police came to the spot to intervene stones were allegedly pelted on them from inside the office premises. Three police constables were injured in the stone-pelting. The extent and seriousness of the injuries are not yet known. Heavy police bandobast has been ordered in the area and the situation is under control, the sources said. Senior police officials have rushed to the spot to supervise operations. [UNI - Mumbai, 7th of May 2005]
‘Kaam’ in Hindi means both, ‘work’ and ‘sex’, and a lot of call centre boys and girls seem to prefer the latter interpretation:
Hidden cameras show enormous on the job sex by BPO gals and guys at night. Indian BPO corporations have started monitoring their employee activities at night. The call centre guys and gals at night are having sex with each other and these are getting into secretly placed video cameras watching them. The sex epidemic in India especially among call centre gals and guys is rising at astronomical heights. According to some think tanks, these guys and gals in early twenties get the sexual freedom at night working together. The sex activities take place during and after work hours in different places. Many companies take disciplinary actions. Mostly they fire those employees who engage in sex at work. But the number of employees engaged in lesbian and straight sex has skyrocketed recently. [www.indiadaily.com - 8th of June 2005]
[prol-position news #3, 8/2005] www.prol-position.net