If The U.S. Is Finally Cheaper Than India, Don't Foul Up The Opportunity

| Contact Center/CRM Views and Analysis

If The U.S. Is Finally Cheaper Than India, Don't Foul Up The Opportunity

Is the U.S. finally competitive with India for contact centers and IT?

That's the spin on the word from BPO outsourcer Genpact. Company president and ceo Pramod Bhasin was reported in Hindu Business Line saying that his firm is doubling its U.S. workforce to 2,000 in the next two to three years to provide BPO, help desk and other services.

"The unemployment level in the U.S. has created a situation where you can hire good professionals, cheaper," said Bhasin.

I'm not exactly surprised with this. India has been moving to saturation levels for high offshore- quality (well-educated, superb English-language skills) contact center workers as it moves up the IT chain, resulting in higher turnover and increased wage pressure. Contact center employment in India is often less desirable in North America because the agents and supervisors have to work the graveyard shifts to be there for American, Canadian and U.K. end-customers. 

There has been points raised that going offshore results on longer calls, increased escalations and repeat inquiries that add directly to costs, and their admittedly less tangible impacts on customer satisfaction and retention, and sales. The numbers do not begin to look good for offshoring for the higher-value calls.

At the same time steadily improving voice (IVR, speech recognition systems) and web self-service are capturing an increasing proportion of the simple calls once offshore outsourced. In a comment ascribed to global BPO TeleTech president and CEO Kenneth Tuchman: "I don't care where in the world you go, self-service will always be cheaper."  

The net results are that the calls that are increasingly being handled by agents are the most difficult ones: from upset customers who went through the self-service drill and that means there is no room for the cultural-difference-driven misunderstandings and repeat questions that happens all too often with offshore agents. Not when with a few clicks annoyed buyers can carve virtual fresh orifices out of firms via social media, which means potential lost sales from others who read and sympathized with their stories.

(Social media tracking response is for that reason the last function any smart firm will have offshored/nearshored)

Does this mean happy days for American contact centers and IT departments? Only if the companies employing these workers tell their senior managers and management consultants who have been recommending  slicing wages, cutting hours and benefits i.e. treating their workers like garbage to make more money to walk off some very high cliffs themselves. Otherwise the quality of staff and work will deteriorate: especially as the economy picks up and the best employees return to their former careers or seek new opportunities elsewhere.
The net results? A renewed look at nearshoring/offshoring in the remaining nations--often in dicey places safetywise for Western managers, trainers and consultants (next-door Mexico is bad enough)--that have not yet slash-and-burned by contact centers, especially BPOs. A fresh focus on automated solutions so that contact centers agents will become as scarce as elevator attendants.

The Huffington Post had a nice expose authored by a writer for the Independent on the lives-destroying and economy-crippling scam that passes for a good chunk of management consulting. Lazy firms looking for quick fixes to their bottom lines hire smooth talking outfits who hire young know-nothing idiots who then feed them their snake oil that they tell their customers that makes them feel better--old fashioned patent medicines were laced with booze and opiates--while crippling their operations and killing the very people who make them exist i.e. their employees.

Johann Hari, a columnist for the Independent, wrote in the Huffington Post that the answer lies in keeping rather in people off payroll (POP).

"Professor Wayne Cascio of the University of Colorado has studied the relative costs and benefits of POPing your workforce. Corporations and governments are receptive to the idea that the quickest, easiest way to save money is to fire workers. But Cascio has shown that, most of the time, the costs outweigh the gains. Obviously, you have to immediately find large amounts of redundancy and severance pay. But the costs don't stop there. Your workforce becomes very nervous - and a nervous workforce is dramatically less productive and less innovative. The best people leave. The service to the customer deteriorates - so they abandon you even more."

"The facts backing this up are striking. The OECD has studied developed economies over a 20-year period, and it found labor productivity growth was much higher in the countries where it is hardest to fire people. The better you treat a workforce, the better they work. Professor Peter Cappelli studied 122 companies and found that lay-offs most often shrank their future profitability, instead of swelling it."

The formula for contact centers have been mentioned frequently in this blog and the Logout column in Customer Interaction Solutions: shifting to work-at-home, selecting and training the right people both agents and supervisors and treating them right. How about time we give these concepts a real try now that we have the golden opportunity to do so? 

Before we lose the contact center sector and the opportunities it provides for good....




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