In the 1980s and 1990s, approximately 600,000 call center jobs were outsourced overseas. Lately, however, they have started to come back. This is great news for American job seekers and businesses alike—there were more than 100,000 positions created in call centers throughout the country between 2010 and 2012, and companies are generating better business results.
Why are call centers coming back to the United States?
One of the major reasons why companies outsourced call center jobs in the first place was to take advantage of affordable labor in countries such as India and the Philippines. However, wages in these countries are becoming less and less affordable every year. In India, salaries are rising 10 percent annually; in the Philippines, the annual jump is about 7 percent. Thus, the financial edge of outsourcing is beginning to blunt, and many companies are starting to reverse course and “insource” their call center operations.
Along with the rising costs of call center outsourcing, companies are also experiencing diminishing returns. In the past, people called customer service representatives to perform simple tasks like resetting passwords or placing orders, and offshore call center professionals were more than capable of handling these tasks. Today, however, these simple functions are now automated, and customer service reps must be able to handle more complex, “context-sensitive” calls. Performing this kind of call center work successfully requires advanced knowledge of the product and excellent communication skills. Representatives must understand what the person on the other end of line is saying, and they must be able to be understood.
Being understood is, in fact, vitally important. A 2008 study by the CFI Group concluded, “when customer service representatives are perceived to speak clearly, they also resolve customer issues 88 percent of the time.” But when they are not perceived as speaking clearly, “they resolve customer issues only 45 percent of the time.”
This lack of understanding, whether perceived or real, has a very real impact on customer satisfaction levels. In 2012, CFI Group’s survey revealed that, in general, call centers average a satisfaction score of 77 out of 100. Offshore call centers received a score of only 62—a 20 percent decrease. The main goal of a call center is to ensure customer satisfaction, and domestic call centers simply do it better.
Lastly, government action has driven the trend of insourcing. For example, New York congressman Tim Bishop recently introduced bipartisan legislation to prohibit corporations that send U.S. call center jobs overseas from receiving federal grants and loans. U.S. Senator Bob Casey has pushed similar legislation to protect call center jobs in Pennsylvania.
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What is the impact of call center insourcing?
A recent survey of 100 chief financial officers conducted by BDO USA and highlighted by the FCC revealed that that just 12 percent of businesses maintained offshore contact centers or help desks—a dramatic drop from the 35 percent that did so in 2009.
Job seekers are also experiencing the impact of this shift. There were more than 2.3 million customer service jobs in the U.S. in 2012. By 2022, the Bureau of Labor Statistics expects that number to grow 13 percent, creating thousands of job opportunities for those with good customer service and computer skills.
The turnaround of the American call center industry is a big win for the economy, workers and American consumers.