*** Shifts in the Call Centre Industry: Gurgaon Tata Workers’ Report and Global Re-Locations –
Call centres can be seen as ‘the industry of globalisation’. The came up in the 1990s as a product of Taylorisation of office work: information technology enabled to undermine the ‘individual skills’ of accountants, bank and other office workers. Contrary to what a lot of lefty ideologist thought the technological restructuring lead to a massification and concentration of work-force. By the end of the 1990s call centres went global, jumped the English speaking global wage scales from the global north to south. The patriotic populism of most of the trade unions proved helpless facing global relocations. India became the global back-office and call centre. Call centres combined ‘excess capital’ (finance, dubious personal services etc.) with an excess educated working class (students, graduates etc.). Unemployed post-graduates in Tunisia phoned for French Telecom, their Indian work-mates did the same for British Telecom. With the crisis one of the main pillars of call centre industry – the finance sector and personal services – came under pressure, so did wages in the global north. Currently we can witness rapid changes and shifts within global call centre work. In the following we give a sketchy overview on recent trends. Gurgaon is probably still the biggest call centre hub world-wide, so we are glad to document a short letter by a worker at Tata Consultancy Services based in Gurgaon.
a) Re-relocation back to the US and UK – Falling wage levels and populism
b) ‘Indian’ call centre companies opening call centres in the global north – Investing in the industrial decay (Manchester)
c) Call centre industry shifting further into the lowest wage regions, example Kashmir and Bhutan
d) Strike by call centre workers at Sparsh after relocation to small Indian town
e) Intensified outsourcing of accountancy and personnel departments and supply-chain management by major corporations
f) Squeezing space in ‘Indian call’ centres to counteract rising rent prices
g) Foreign workers in Indian call centres – Report of a worker from the USA
h) Strike by workers at Verizon in the US
i) Worker’s report from Tata Consultancy, Gurgaon
a) Re-relocation back to the US and UK – Falling wage levels and populism
There is a lot of talk about ‘on-shoring’, meaning that US or UK companies would close their call centres in India and re-open it in the US/UK. Most of these cases are actually blown up and don’t represent a major trend. The reasons given are often populist to both the patriotic sentiments and the ‘client pride’ (local accents, ‘good quality’ etc.). In general the share of IT-BPO service work done in India still increased, the global market share stood at about 55 per cent in 2010. Nevertheless there are some shifts taking place. We document some of them:
Indian call centres: not as cheap as the UK
(4th of July 2011, ET)
“But with Indian salaries expected to rise 13 per cent this year, at least one UK company has decided it’s cheaper to operate out of northern England than in Mumbai. According to a report in the Daily Telegraph, New Call Telecom said it was leaving Mumbai to open a call centre in Burnley, Lancashire after being attracted by low commercial rents and cheap labour costs there. Salaries in India aren’t that cheap any more. Add to that the costs of us flying out there, hotels and software, and the costs are at an absolute parity. Mr Eastwood added he also expected to save money through better staff retention in Burnley. In the UK we will pay workers the minimum wage. Given the current economic environment, we will get good “sticky” employees who will also receive bonuses linked to performance. The new call centre will operate out of rented property and employ up to 100 people. Some days later banking giant Santander announced to bring its call centres ‘back’ to the UK: 500 jobs would be created by the switch of call centre work from India to staff based in the UK cities of Glasgow, Leicester and Liverpool from this month. This year, BT has also created several hundreds of jobs in the West Midlands through the opening of a new call centre in Sandwell in the West Midlands. That investment follows a decision announced at its annual meeting two years ago that it too would be moving some offshored customer support jobs from India back the the UK. UK insurer Aviva moved back some jobs from its Indian BPO partner WNS to Norwich, UK, earlier this year. Although it did not give a reason, people familiar with the matter said it was facing quality issues.”
The following example demonstrates the ironic side of things: banking call centre relocation back from Asia because local workers are better in putting pressures of local workers in debt:
“The decision to bring the work – which had been handled from the Philippines under contract by Accenture has boosted employment at United’s offices in Warrington and Whitehaven in north-west England.
Russ Houlden, chief financial officer, said a review of United’s debt collection strategy had prompted the move – and a recognition that local staff were best positioned to deal efficiently with customers with genuine problems in meeting their bills.”
b) ‘Indian’ call centre companies opening call centres in the global north – Investing in the industrial decay (Manchester)
“On 14th of July 2011 the Indian firm Aegis announced to create 600 jobs by opening call centre in Manchester, UK. The contact centre will handle calls on behalf of Aegis clients, most of which are blue chip companies in sectors like healthcare, travel and hospitality, retail and technology.”
“As Indian companies grow in the U.S., outsourcing comes home
By Paul Glader, 20th of May 2011
New York – Ray Capuana paces the rows of cubicles in a haggard high-rise a stone’s throw from Wall Street as his people hustle the phones and hope for a bonus check. His employees are not bond traders, though. They are call center workers. Many are African Americans without college degrees. Some lack high school diplomas. They work for a Mumbai-based company called Aegis Communications. India’s outsourcing giants – faced with rising wages at home – have looked for growth opportunities in the United States. In this evolution, outsourcing has come home. The pay runs $12 to $14 an hour, with bonus checks of up to $730 a month. At $12 to $14 an hour with possible monthly bonuses, workers can make four times what call center workers in India do. But Essar executives say it’s worth paying more in wages to leverage a large U.S. presence to gain contracts with banks, health-care companies and governments that require the work to be done here.”
Importing cheap labour
Actually at least in the US most of the ‘Indian’ companies import some of their work-force and undermine local wage levels.
“In the past, if, say, BNY Mellon inked an IT contract with Infosys, Infosys would handle 70 percent of the work in India and send 30 percent of its project staff to the United States on temporary work visas. These Indian workers often live in ethnic enclaves on the outskirts of a city, work long hours and earn less than an American would for the same work. Companies such as Tata Consultancy Services, Genpact and Infosys are the largest users of the H-1B visa program and have collectively brought as many as 30,000 workers into the country in a year on H-1B or other visas. The workers are often paid “home-country wages” in America. “That’s as low as $8,000 a year” with housing allowances, he says. The employers own the visas – so the workers can’t bargain for wages, and if they lose their job they have to leave the country.”
c) Call centre industry shifting further into the lowest wage regions, example Kashmir and Bhutan
In the end it’s a question of wages, and wages are low when workers conditions are miserable. Aegis not only opens call centres in Manchester, they and companies like Genpact are the global tracker dogs for an ‘educated low waged work-force’. They have to enter the fields of social disintegration and decaying dictatorships:
Kashmiri call centre gives flicker of hope to a bleak future
(12th of August 2011 ET)
IS one of the world’s most volatile regions – a flashpoint between two nuclear-armed states that has become an economic backwater.
Now, India’s IT revolution has arrived in Kashmir with the opening of the state’s first call centre, in the city of Srinagar. The 230-seat centre, which handles calls mostly from customers in other parts of India. The call centre is operated by Aegis, an outsourcing company owned by Essar Group. Much of its work involves handling calls from customers in India’s booming mobile phone market, which is adding 15 million subscribers a month. With 500,000 unemployed, there is no shortage of willing job applicants, while wages in Kashmir are among the lowest in India.
Despite slowdown, BPOs look for expansion in Bhutan
(24th of August 2011, FE)
While the industry body, Nasscom, sticks to its projection of 16-18 per cent growth in IT exports in 2011-12, industry leader Genpact is all set to foray into Bhutan. “We are all set to open our office in Bhutan and we hope to start the operations soon. Tiger (NV Tyagarajan) and his team are already working on it,” said Pramod Bhasin, vice-chairman Genpact. “We believe that our country is an ideal destination to start a BPO because of the conducive atmosphere we have. To begin with, we have a stable government that is eager to set up an outsourcing industry. Apart from Genpact, we are also in talks with Wipro and few other players to start their operations in Bhutan,” said Kezang, executive director, ministry of information and communications, government of Bhutan.
d) Sparsh workers strike again!
In March 2009 workers at Sparsh call centre went on strike against low wages.
https://gurgaonworkersnews.wordpress.com/gurgaonworkersnews-no-933/#fn2
The call centre closed and a smaller call centre was opened in a small town in Rajasthan. About two years later and several hundred kilometres in distance Sparsh again faced workers’ anger:
BSNL call centre employees on strike
(22nd of June 2011, Times of India)
AJMER: Employees of state’s first call centre – BSNL – went on strike alleging the organization for illegal deduction of money. They said they got payments lower than what was promised to them during their appointment. The management was in touch with the employees but no solution came until the evening. The call center was inaugurated by union IT and telecom state minister Sachin Pilot. About thirty people working with call centre ‘Sparsh’ walked out of the office on Friday morning. They shouted slogan against the officials. “They promised to pay Rs 5,500 at the time of appointment but they are paying us Rs 3, 700 only,” Minali, an employee, said. They also accused the HR and operation officials of harassment , “They have zero tolerance . Even when the system fails they deduct half day’s salary,” another employee said. When contacted, the officials refused to talk and said there was some misunderstanding , which they were trying to solve.
e) Intensified outsourcing of accountancy and personnel departments and supply-chain management by major corporations
Obviously it becomes more interesting when global call centre agents or back-office workers not only handle ‘global clients’ but form part of an actual global productive cooperation. For example a back-office in Gurgaon organises all shift-shedules for the German railways Deutsche Bahn. Some recent examples from Gurgaon:
“Capgemini inaugurated its new Business Process Outsourcing (BPO) centre in Gurgaon, its first BPO centre in North India and sixth in India
(23rd of July 2011, FT)
Spread across an area of 35000 sq. ft, the new BPO facility in Gurgaon will increase Capgemini’s BPO’s total capacity in India to over 4500 seats. The existing BPO staff in Gurgaon will deliver Global Order Management services to Nokia Siemens Networks, a leading global enabler of communications services, to support the company’s global Supply Chain Management.”
“Genpact acquires Nissan’s HR operations
(2nd of June 2011, ET)
India’s largest BPO firm, Genpact, on Monday bagged a seven-year HR outsourcing contract from its existing client Nissan by acquiring its shared services center for human resources in Yokohama , Japan. The acquisition will boost Genpact’s presence in Japan and the center ( Nissan Human Information Service )) will be renamed as Genpact Japan Service . The amount paid for acquisition was not disclosed by Genpact. Genpact will provide payroll, benefits, staffing, training and other key HR services to Nissan’s 54,000 employees. Genpact already manages procurement for Nissan from its offices in Gurgaon and Dalian.”
f) Squeezing space in ‘Indian call’ centres to counteract rising rent prices
Apart from cutting wages, free food, bonuses etc. a lot of call centres in India, particularly in high-rent urban areas, start to reduce the work and breathing space of their workers.
“IT, ITeS firms pack more employees in confined work space to save on real estate costs
3rd of August 2011)
“Under pressure from their clients, or parent organisations, to reduce bills amid increasing rentals and employee salaries, these IT-enabled services (ITeS) firms are taking stringent measures to cut costs. They are reducing space per employee, and decreasing the size of common areas like cafeterias and conference rooms. At a clutch of ITeS companies, office space is being shared between IT workers and the call centre workforce (as the latter work the late shift to synchronise with US timings). And a few firms have even been asking employees to work out of the library. At the Gurgaon offshore office mentioned above, space per employee has been reduced to 60 sq ft from 100 sq ft; at large IT companies, 125 sq ft per employee is a standard. Workstation width has dropped from 3-4 feet earlier to 2 feet. All this is leading to severe workrelated stress. “I can’t move my hands in the fear of hurting someone. And all day one has to hear colleagues talking about issues from boyfriends to food recipes to childcare, which is not just distracting, but irritating,” says Rajsekhar. A Kumar, an employee at one Gurgaon ITeS centre, adds: “In the morning, the lifts are so packed it feels like you are travelling in a Mumbai local train.” “In the West, people come out on the street to protest when governments allow higher bird density in poultry farms. Over the past five years, rentals for IT and ITeS firms in the main metros have gone up by between 20% and 90%, according to real estate consultant Jones Lang LaSalle India. Salaries, on the other hand, have seen a 15-20% growth year-on-year. A junior employee with generic skills in India costs about $20 an hour, or $40,000 a year. An equivalent resource in the US comes for $60,000. A senior executive resource in India costs $30 an hour, or $60,000 a year, while an employee with a similar experience and skill in the US costs $90,000 annually. The result? Margins in business process outsourcing (BPO) have been stagnating at 18% for the past years even as revenues declined in 2011. For IT services the drop in profitability is worse: margins have plunged from 32% in 2006 to 18% in fiscal year 2011.”
g) Foreign workers in Indian call centres – Report of a worker from the USA
And obviously there are quite a few foreign workers employed in Indian call centres now. A readable account of a US based worker from Gurgaon:
http://motherjones.com/politics/2011/05/indian-call-center-americanization
h) Strike by workers at Verizon in the US
They have been one of the proletarian back-bones of global communication workers and one of the first call centre workers who went on a mass strike in 2000.
http://libcom.org/library/6-confrontations-pulse-collective-struggle
They had to go on strike again this year in August, after Verizon announced to cut health care and pension. We know little about whether this strike had repercussions within the global telephone lines, whether Verizon call centre work was done by invisible (and probably unknowing) ‘scabs’ at the other line. This mass work-force which is still semi-integrated with the ‘hard-ware’ workers like electricians or line-maintenance could have reached out to a global work-force. We know too little about the strike and given the lack of first-hand accounts or reports by comrades we document the conclusion of the WSWS:
http://www.wsws.org/articles/2011/aug2011/pers-a22.shtml
i) Worker’s report from Tata Consultancy, Gurgaon
“Two brief accounts from Gurgaon where call centres continue with their exploitative practices
Tata, the salt to software conglomerate is no stranger to controversies. From the killing fields of Nandigram to driving the endangered Olive Ridley turtles to near extinction the Tatas have seen them and done them all. Outsourcing behemoth, Tata Consultancy Services (TCS), which operates in both information technology and business processing outsourcing (BPO) domains, has kept alive the age old Tata tradition of exploitation of workers – this time in Gurgaon call centres. As an employee of TCS, I have documented two such practices.
One of them relates to increasing the notice period. A notice period is the time which the employee must serve on resignation before he is relieved from company services. As per labour laws these are a part of the employment contract and cannot be increased to the disadvantage of the employees without employee consent. Rachel, an agent with TCS, narrated an incident when she found a better offer with a rival call centre and resigned from TCS. To her consternation, she was informed that her notice period had been unilaterally increased by TCS from two (as was mentioned in her employment contract with TCS) to three months. She was not informed of this change in the terms of her employment (which is completely illegal in the first place) and she came to know about it only when she had resigned. Since she had already committed on a joining date to the rival call centre – which she was unable to meet – she was left with no choice but to take back her resignation and continue working with TCS. On the first glance this may not appear to be a serious violation of employee rights. Reality however is different. Since call centres are not unionised the agents have no negotiating power. This creates fertile conditions for exploitation by the management all of which is well documented in call centre literature. The only real power that an employee possesses is to resign. By depriving the employees of this power they are further subjugated to management whims leading to possibility for pervasive exploitation.
Timesheets are meant to document the man-hours logged by agents at work. Agents fill them at the end of a day’s work. Call centres extensively use them to determine the salary payout to the agents. Abhishek, an agent with a voice based process for domestic client narrates that their team was asked to fill 8 working hours of work even as they were asked to put in 10 hours. What it meant was that they were paid for 8 hours work while they were putting 10 hours. What is more interesting is that there virtually no protests on what was a patently exploitative mandate. As Abhishek notes, the typical reaction of an agent was of docile acceptance coupled with the acknowledgement of lack of negotiating power vis-a-vis the employers.
These two instances only go to reveal the extent of exploitation of the workforce and an urgent need for unionisation in the call centre space.
PS- Some names have been changed in order to prevent the victimisation of my sources. Again this goes to show the oppressive nature of neo-liberal global capitalism that is pervasive in Gurgaon.”
*** A Prelude? Current Problems of the Real Estate Giant DLF –
The real estate company DLF was the symbol of the ‘Shining India’ of the post-1990 period, the shooting star on the stock-markets and the builder of neoliberal city Gurgaon. The most recent news about DLF might be an indicator of the current condition of the ‘Indian boom’ and will have an impact on the local (political) ruling class, which has been forged in the gold rush of ‘land deals’. We should keep an open eye at further developments.
DLF to sell 13-acre Gurgaon plot for Rs 300 crore to ease debt burden
(19th of August 2011, ET)
India’s largest developer DLF is selling a 13-acre plot in Gurgaon, Haryana, as part of its plan to ease its debt burden through asset sales. About 1 million sq ft of commercial space can be built on the plot, which is expected to fetch Rs 300 crore for the realty firm. DLF’s net debt increased by Rs 100 crore during the April-June quarter to Rs 21,524 crore. The firm had said that it plans to sell developed assets, including IT parks and its hotels business as well as hotel plots to raise Rs 7,000 crore over the next two years. The company reported that the money from the sale of non-core assets was Rs 165 crore in April-June quarter. The company is also trying to sell land in other cities such as Hyderabad, Kolkata, and Chennai. DLF has also appointed Goldman Sachs as an advisor to sell Aman Resorts, a luxury hotel chain of 23 hotels across 12 countries it had acquired in November 2007 for $400 million. Real estate giant DLF may have to pay Rs 900 crore extra penalty if the Competition Commission of India (CCI) finds it guilty of abusing its dominant market position in three more projects in Gurgaon.
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