Outsourcing Is NOT The Answer

I saw an advertisement today for a company that wanted US and European clients to outsource to India.

Outsourcing is not always the answer.

In fact I have been setting up call centers since 1994 for Europe and US clients and never went to India or China. OK, I admit, there was one exception. The company opened an office in both India and China and hired our own full time staff, just like we would in any country. We paid at the 66% of the median wage. If an average person got between 10,000 and 20,000 a year, our salary was 16,600. Above average, but not high enough to change the local economy. That pay scale was the same in every country for people below the senior director level.

Outsourcing in Europe

I live in France.  I had one client, the director of technical support for one of the worlds biggest software companies, that wanted to outsource to India, pretty much because he heard that people were doing that.

His project called for 400 tier 2 and tier 3 call center agents that were all certified by Microsoft, Cisco and other related companies. All agents needed to speak English and about half had to speak French.

The call center decision was given to me (as where they all). I went through all the due diligence as one would expect, and came back with an opinion that we could not keep out call center agents, since the agents habitually moved on to the next job as soon as it paid just a little more. I had been in contact not just with the service providers but also agents who were taking tech support calls.

How to Speak to Indian Call Center Agents

I decided that I needed to speak with the actual agents, so I asked for permission to add tech support calls to my expense report. The budget was nearly bottomless, but the time-line was short, so it was approved. I  called a tech support numbers for different companies that had call centers in India, and when I got someone on the line I asked that recording be turned off for my privacy. Not that unusual a request and no one had an issue with it. I paid for my calls by credit card and had an agent that was free to speak about whatever I wanted.

I asked some difficult questions like how do you replicate an SQL data base real time across untrusted domains while using older versions of Microsoft SQL. I had worked a solution out some years before when I actualy had to do this, and since the version of SQL was old I probably new the product better than the agent.

While working through the problem I would quizz the agent on conditions at the office, the pay and everything else. Agents were more than happy to chat and since they knew that the call was not being recorded they were very honest. One agent told me that he went as far as leaving his job in mid-shift because he had a better offer. He just up and left.

Dell left India based on this constant flux of agents and the inability to assure their clients with a proper level of service.

Eastern Europe

Following this ‘awakening’ the team then wanted to set up a call center in Poland. Poland was the next best thing to India/China from the noise the technical support director had been hearing in the press. Poland quickly went bust, the economy was better off that the team had hoped and getting 400 English & French speaking agents would be more expensive than the effort was worth.

Next – Eastern Europe. Bulgaria or Romania apparently had a lot of French speakers, but a combination of the Indian issue where people switched jobs with little notice and the fact that the Economy was getting better gave doubt to the long term value in Eastern Europe (although this seemed better than the Asian solution.

North Africa

Because of the North African history there are a lot of French speakers. I looked at Morocco and Tunisia as possible places for our center. Both countries offered highly educated people (as did China, India, Poland, Romania and Bulgaria) that were very willing to work. We even looked at Algeria, but the country was too unstable.

North Africa lost out because of an existing prejudice against the accent that North Africans have when they speak French. Since I American, I found this odd. These countries were former French colonies and Algeria was actually part of France.

Decision Time

So, each region had something against it. There was either no savings in the long run, high of client un-sat rates or the prejudice that we never speak of out loud.

What I did in the end was to get in touch with a set of French city that all had a high level of unemployment and universities within a 50 kilometer radius. Then we got in touch with the local governments and the local unemployment offices.

In ‘exchange’ for our hiring 400 full time employees to do tier 2 and tier 3 support the city supplied office space and ‘incentives’. An incentive in France can go as far as:

the unemployment office continuing to pay the unemployment benefits, so our company only paid the difference between unemployment benefits and negotiated salary.  That is 30% to 50% of the salary.

Paying little or no social charges for several years. Social charges can be 50% of the base salary. This means that a salary of 10,000 actually costs the company 15,000. Total salary and social charges of 15,000 actually cost 5,000 (extreme case)

Great press, help this country and its unemployment level and we have native language speakers who are happy to be in the city they are in, and we know they won’t jump to the next offer, because there are not that many offers.

In The End

The decision to outsource to foreign shores is not one to be taken quickly. Consider what is best for your client overall, not just the cost. You may be surprised to find that a call center in your own city is better than anything you could hope for in another country.

Tagged as: call center agents, outsource to china, outsource to eastern europe, outsource to india, outsource to north africa, Outsourcing in Europe, tier 2, tier 3, why outsource