Outsourcing Your Typos
A very interesting Bill was recently introduced to the US House of Representatives: the US Call Center Worker & Consumer Protection Act. The Bill states:
To require a publicly available a list of all employers that relocate a call center overseas and to make such companies ineligible for Federal grants or guaranteed loans and to require disclosure of the physical location of business agents engaging in customer service communications.
Thanks to my English teacher I didn't make it past the first line, take a look again:
To require a publicly available a list of all employers
One should not expect that Bills introduced to the House of Representatives might have been proofread.
The Bill seems aimed to target outsourcing call center operations and penalize businesses that would move call centers outside of the United States by listing them and making them ineligible for Federal grants or guaranteed loans.
I am not familiar with Federal grants or guaranteed loans that businesses could be granted, however I agree with the premise that Federal funding does not seem best suited to build offshore call centers.
In principle I am not opposed to outsourcing call centers, in fact I see call center employees daily here in Cebu City. I have witnessed the developmental effect that they have had on cities in the developing world. They have provided thousands of jobs within Cebu City, which allowed American (and other international) businesses to save thousands (millions) of dollars on operational expenses which may or may not have been appropriated properly from a shareholder's standpoint. In addition, I know that outsourced call centers have also had an effect on small to medium sized enterprises (SMEs) by allowing them to expand or create customer service operations in a cost effective manner.
In addition to the ineligibility of Federal funding, this Bill could be interesting for a few business types.
SMEs
- NOTICE REQUIREMENT:
- (A) IN GENERAL.—Not fewer than 120 days before relocating a call center to a location outside of the United States, an employer shall notify the Secretary of such relocation.
- (B) PENALTY.—A person who violates sub-paragraph (A) shall be subject to a civil penalty not to exceed $10,000 for each day of violation.
One should certainly be on top of Notifying the FTC prior to relocating, a $10,000 per day maximum penalty is intimidating.
- TRANSFER TO U.S.-BASED CUSTOMER SERVICE CENTER.—A business entity that is subject to the requirements of subsection (a) shall, at the request of a customer, transfer the customer to a customer service agent who is physically located in the United States.
This requirement could be complicated as it in essence stipulates that you have a customer service agent physically located in the US. If you have outsourced your entire customer support, you may need to reconsider.
Generally, the Bill would make outsourcing call centers more complicated for SMEs.
JPMorgan Chase
I know that they have currently outsourced at least part of their call center operations to Cebu City & that they at one time received Federal funding during the financial crisis of 2008. They were also one of the first to repay the bailout. If we presume that JPMorgan was in part, able to pay the bailout money thanks to outsourcing we might need to reconsider if this Bill is in fact worthwhile.
Outsourcing can be a good solution for businesses, I personally feel that maintaining a strong and direct connection between your business and your customer is one of the smartest things you can do. I therefore think that even if you outsource your customer service, it should be outsourced as part of your business entity and not to a third-party. Outsourcing also has risks and drawbacks, remember that just because something is cost effective, does not always mean it works better in the long run.
To the Representatives who have authored the Bill - I hope you realize that it is not just call centers that are being outsourced, in fact many business processes have already been outsourced (hint: Google "BPO"). I suggest you contact these BPOs next time you have a Bill for submission, at least then someone will proofread your work.
In the local market, I have seen an incredible competition arise for qualified agents in which call centers are competing with each other to recruit talent. This has driven the call center agent's salaries up and in the mid to long term will have a considerable negative impact on the overall cost effectiveness of outsourcing. Outsourcing has certainly lifted the experience, expertise and exposure within the local market. I personally hope that this Bill will serve as a wake up call for the Philippines. We cannot simply rely on outsourcing alone (or for that matter any single economic driver: OFWs) as the sole development agent of the country. Outsourcing has laid an incredible foundation to build upon and I am optimistic that new businesses are going to spring up. The government should invest in infrastructure and an environment that will allow these new startups to succeed.
I am currently working on convincing call center agents with great ideas to stop working for the Man and to startup their own companies. If you have a great idea or want to help this next step of development I'd love to hear from you - email me.
Full House Bill: http://e-lobbyist.com/gaits/text/365010
