Offshore outsourcing has been a hot topic for many years and gained tremendous momentum in the 1990s and early 2000s with companies intently focused on reducing operational costs. Fortune 500 organizations led the charge by setting up call center operations in developing countries, which seemed to signal a rush to find the cheapest agent on the planet.
India and the Philippines were the most popular destinations due to their perceived economic stability and telecommunications infrastructures. Not only were workers paid much less than their American counterparts, but they already spoke basic English, albeit in some cases with a strong accent.
In 2017, with the inauguration of President Donald Trump, the America First policy was enacted to bring American companies’ production and resources back to the U.S. For the first time in many years, a bipartisan appetite emerged for legislation encouraging repatriating operations. Congress passed significant tax incentives which forced companies to take a close look at their offshore operations and rethink their strategies.
In addition, new tariffs caused trade instability and concern. Pressure was mounting on companies not only from the government and the public but also from internal cost metrics. As demand for services increased, wage growth in popular offshore markets began to rise, essentially negating many of the primary benefits of foreign outsourcing.
Mergers and Acquisitions
In recent years, something like a tsunami has occurred in the marketplace with companies being bought out or merged to create new hybrids of their former selves. Some of the household names we grew up with no longer exist. Many restructured corporations – the retail space is a good example – began to rely heavily on call centers. Changes in ownership have led to a redundancy in their assets and the ultimate consolidation of their customer service operations both domestic and offshore.
Customer Experience and Technology
Technology has changed the paradigm for customers’ expectations. Businesses that choose to deliver higher levels of service perform better across the board.
We have also seen an increase in the underemployment of millennials who have become prime candidates for call center positions. This demographic is native to the digital communications required for customer contact. Millennials can be more comfortable conversing via live chat, e-mail and text than by telephone.
Organizations that allow subpar service from their offshore operations – whether via digital channels or traditional telephone contact – can quickly damage the trust and relationship they’ve built with their customers and ultimately reduce profitability.
COVID-19 Keeps Workers at Home
The global COVID-19 pandemic has sent shock waves throughout the entire world. Business as usual came to a standstill earlier this year and new norms are still being established. Customer behavior has changed.
The most immediate result of COVID-19 was the reality that working from home is the best way to keep employees productive and safe in times of uncertainty. Call centers leaders have been establishing work-at-home models for many years. At the beginning of the pandemic, these companies simply expanded the programs already in place to accommodate their immediate needs.
Offering a work-from-home model reduces costs and casts a much wider net from a recruiting and retention standpoint. Employees are more likely to be comfortable, have a greater appreciation for their careers, and be more open to non-traditional schedules such as evening, overnight and weekend hours. Split shifts can be essential to providing cost-effective coverage for customer service demand levels, and staff can be more easily incentivized to accept these shifts while working from home as opposed to traveling back and forth to an external office location.
As lower cost models take effect, providing higher-quality employees available in the U.S. with improved morale and working conditions, reshoring call centers will continue to be attractive to successful organizations. T&ID