Throughout the 1990s and the first decade of the 2000s, call centers were often the poster children for jobs leaving the U.S. and being outsourced to other countries. Many businesses outsourced their call center operations to foreign countries, most often India and the Philippines, leaving U.S.-based phone centers behind in favor of less expensive international ones.
In recent years, however, this trend has seen something of a reversal. Rather than increasingly leaving the U.S., many businesses are now bringing their call centers back to the U.S. What’s behind this trend, and what does it mean for call center outsourcing? Read on to find out more.
A Look at Overseas Call Center Outsourcing
During the 1990s and early 2000s, a trend of call center operations for U.S.-based businesses being outsourced to foreign countries began. This trend started when businesses discovered that it was less expensive to set up operations in countries like India and the Philippines, where wages were lower and the cost of living was less expensive.
Where a U.S.-based call center employee cost a business an average of $20 an hour, one based in India cost an average of $12. When expanded out to hundreds or thousands of employees, the savings that could be generated by overseas outsourcing were often substantial.
Because of the savings that could be had through overseas outsourcing, the number of jobs that left the U.S. was often staggering. Between 2001 and 2003 alone, over 250,000 call center jobs were outsourced to the Philippines and the U.S.
A Reversing Trend?
In recent years, however, the trend in call center outsourcing has been for jobs to be sent back to the U.S. In 2010, 35 percent of call center contacts had a significant onshore delivery presence in the U.S. Just three years later, the number had increased to 49 percent. By 2015, it had increased again to 53%.
Clearly, many companies were reconsidering their decision to send call center jobs overseas. What caused them to reevaluate? It turns out there are several factors that have led to this reversal in outsourcing policy:
- Lower U.S. operating costs: As a result of the 2008 recession, the cost of operating in the U.S. became lower. Because of the change in costs, many businesses found that the savings for operating overseas were no longer as significant.
- Decreased savings: Unlike with more skilled/specialized labor, the cost difference between call center employees in one country and those in another is often not as large in practice as it might at first seem.
- Improved customer service: Perhaps the biggest reason for the change is that many businesses now feel that any additional costs associated with operating a call center in the U.S. are worth incurring for the related improvement in customer satisfaction. When businesses use native English speakers, customers are better able to communicate with call center staff. This increases customer satisfaction, decreases complaints, and lowers the amount of time customer phone calls take, letting call centers handle more customers.