In the 80s and 90s, many US corporations began outsourcing their call center operations to countries like India and the Philippines in an attempt to leverage the low wages of overseas workers. Once customer complaints began piling up due to poor service quality and managers became increasingly frustrated from the lack of collaboration between the call centers and other US-based departments, these companies started to think twice about their decision.
With the advent of new technologies, the adoption of a more customer-centric focus and cheaper alternatives to the traditional brick and mortar call center, companies like Citi, Neiman Marcus and Nationstar Mortgage started making the move back.
Now, many companies are following suit and moving their call center operations back to America. And there’s evidence that they are not looking back: this trend has led to an increase in customer satisfaction, first call resolution, control over vital business functions and profit. With outcomes like these, it appears that call centers have found a new home in a familiar place: America.
This blog post will discuss the factors that led to the movement of call centers back to the US as well as what trends you might see in the future of call centers in America.
Not long ago, one third of the approximately 5 million call center jobs were outsourced to contractors in a wide range of developing nations, from Malaysia to El Salvador. Now, the percentage of customer support reps in overseas call centers has fallen to around 12 percent, according to Mary Murcott, CEO of the global outsourcing firm Novo 1. At a panel discussion on US jobs at the White House recently, Murcott explained that although call centers are returning, “nobody’s talking about it.”
The main reason for the silence, she explained, is that brands have done a great deal of damage to their credibility through unsatisfactory customer service. As a result, nobody in upper management wants to call attention to the fact that they made a mistake. Even the narrative of bringing jobs back to the USinevitably leads to a discussion of why they were outsourced in the first place.
In addition, although complex customer support calls may be routed back to the US, simple ones may still be handled abroad or by an automated system, which is not a message that companies want to broadcast. Murcott identified companies including United Airlines, Merrill Lynch and Dell as ones that have been moving call centers back to the US quietly because they want to keep their options open for moving operations again if they don’t hit specific cost targets.
Despite the radio silence, it remains clear that many companies are making a huge push to bring their call center operations to US soil. Below are the top 5 reasons why:
1. The Cost of Unhappy Customers
While costs have fallen for managing call centers in the US, wages in other countries have be rising by as much as 20 percent per year. Although wages may still remain below US averages, the costs of unresolved problems and angry customers have offset the saving in salaries. The most complex calls (also known as “contextually sensitive” calls) require a comprehensive understanding of language and cultural awareness.
A study conducted by the CFI Group concluded that customer support agents that can be understood clearly were able to resolve 88 percent of their problem calls. When customers report that the agent was difficult to understand, the calls are only resolved 45 percent of the time.
The report found that communication skills were at least as important as comprehensive product knowledge. Due to rising customer frustration there has been incredible push for corporations to move their call center operations back to the US.
2. Federal Grants and Loans
To win points with voters concerned about the the high unemployment rate, lawmakers have begun to attach financial incentives to moving (or keeping) call centers back to the US. Last fall, US Congress considered the U.S. Call Center and Consumer Protection Act of 2013. If passed, this legislation would cut off all federal grants, direct loans, indirect loans and guarantees to companies that moved their call centers operations overseas.
Call center agents would by law have to tell callers where they are located and transfer the caller to a US call center upon request. Similar bills have been introduced into state and local legislature in various places such as New York, Florida and Arizona. If this bill (or a similar bill) passes, companies will feel the pressure from their own customers to move their operations back to the US.
Instead of waiting in vain, many companies have decided to be one step ahead of the US government and make the move back.
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3. Regulatory Incentives
Political pressure and the negative associations of offshore call centers have driven new regulatory policy since the most recent bailout. PRA is one of the companies that has announced it will be closing all of its offshore call centers and opening a new center in Texas in 2014. PRA purchased over 3 million collections accounts, mostly defaulted credit cards, in bulk from US banks and one of the conditions of the purchase was that there would be no “offshore collections.” Many other companies are being enticed to come back with similar incentives.
4. Technological Advances in Call Center Software
Technology, especially voice recognition and call routing software, have advanced by great leaps in the past few years, making it cheaper to operate and maintain call centers in the US. Simple problems like password resets can now be handled online or by an automated service. Additionally, advances in call center software, like browser-based solutions, have allowed US-based agents to work remotely. This cost effective solution has made hiring a team of remote US-based agents more tangible than ever for many companies.
5. The Mobile/Cloud Revolution
In the midst of this economic and political debate, the vast changes that have come from the proliferation of new technology is being felt as well. Extremely powerful enterprise level apps, running in the cloud, have shifted the business world away from the office and to the home. Now laptops, tablets and even some phones have the same capabilities as a server from a decade ago.
As a result, an ad hoc telemarketing call center can be arranged from a host of contractors working from home or a remote location and updating a central database. That has changed the pricing structure of call centers across the board. Customers can gain easy access to native, sometimes hyperlocal, agents and as a result are becoming brand advocates on social media.
Undoubtedly, there will be some back and forth as the shaky global economy recovers. T-Mobile, for example, was one of the companies singled out in discussions of the U.S. Call Center and Consumer Protection Act for call center layoffs and offshoring in 2012. However, as profits increased, T-Mobile announced last fall that it had turned around and added 2,000 full time employees to US call centers in 2013.
Many companies will be caught in this type of back and forth, but will most likely start to feel the pressure from the top down (i.e. executives feeling the political pressure) and the bottom up (i.e. their customers) and make the switch.
Another trend that will likely continue is the shift from traditional brick-and-mortar operations to the at-home call center agent. A recent Forrester report estimated that 34% of U.S. companies plan to invest in at-home agents and with benefits like reduced operating costs and enhanced customer satisfaction that number will likely continue to increase.
Finally, the role of the call center agent is shifting as well. Call center agents themselves are increasingly becoming more educated, more knowledgeable about business matters and more skilled. With new technology, they are more informed about their customer, more integrated within their team and a more vital asset to the company.
As a result, the role of the call center agent is shifting from answering basic how-can-I-help-you-today mundane questions to answering more complex issues, cross-selling/up-selling and going the extra mile to enhancing the customer’s experience.
As companies move their call center operations back to US soil, they are realizing that it is a win-win. They are enhancing customer service quality, enhancing collaboration between departments and increasingly gaining back control over vital business functions, without sacrificing profit. With results like these, what company wouldn’t want to make the switch?