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What is the future of call centers here in the United States? The first mental picture most
people have of when thinking of a call center is “If I have to call one, who will I be speaking to?”
One reason for these thoughts is that now companies are offshoring call centers to overseas
locations. India and the Philippines are two primary locations for this. It is estimated that
companies spend almost half the cost to operate call centers overseas than it is in the US. (Fluss)
In a time of economic hardship, it would only make sense that companies would want to save
money and move functions overseas, but is saving money better than contributing to a higher
unemployment or losing customers because they have a hard time understanding what the call
center representative is saying? This paper will look into the movement of services overseas, the
advantages and disadvantages of doing so and finally if there is a trend of it continuing.
Offshoring and outsourcing are often used as the same term. This is not the case; by
definition offshoring is a type of outsourcing that involves the relocation of a company's business
process or processes to a foreign country. Whereas outsourcing is any task, operation, job or
process that could be performed by employees within an organization, but is instead contracted
to a third party for a significant period of time. In addition, the functions that are performed by
the third party can be performed on-site or off-site. (Bucki) Offshoring first started to become
popular in the 1990’s, especially in the IT area. It began to take place in the country of India
where was a large pool of English speaking people that were technically proficient at low cost
labor. Global firms such as HP, IBM, Microsoft and Cisco began moving some of their call
centers to India because of this advantage. Other countries have followed suit as well, Japan is
offshoring to China; Germany is moving functions of some companies to Poland and Romania;
France to North Africa and Australia to Indonesia. Offshoring has become popular all over the

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world. The practice became and has remained popular because of the money companies save by
using labor in countries where labor costs are lower.
As one could see, the biggest advantage to moving call centers to overseas locations is
the savings on cost of labor. The savings are good for the companies, up to 70 percent versus
onshore, the jobs being moved to the overseas location is good for the local economy, offshoring
is supposed to benefit both the origin and destination country by creating free trade, providing
jobs and lowering cost of goods and services to the origin country. But not everyone sees it quite
this way, in a Wall Street Journal poll “83% of blue-collar workers agreed that offshoring to
foreign countries with lower wages was a reason the U.S. economy was struggling and more
people weren't being hired.” (Murray & Belkin, 2010)
When looking at the disadvantages of offshoring there were several that referenced the
language and distance barrier faced by not only the consumer but the companies as well. One of
the greatest disadvantages of offshoring is the physical distance; companies don’t have as much
opportunity for personal contact with the call center themselves. This can make operation
managerial decisions difficult to not only implement but sustain compared to mainland call
centers that are easier to visit for hands-on training and management purposes. In many
locations where offshoring has occurred English is the second language for most representatives
in overseas call centers, which can result frustration for both the customer and representative.
One example of this can be seen not only in the language barrier, but the “script” or checklist the
representative follows due to having little to no exposure or experience with the product they are
troubleshooting. This leads to the question of what does the trend of offshoring in the future
look like.

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On July 18, 2012 two senators introduced a bill to Congress named “The United States
Call Center Worker and Consumer Protection Act.” If passed, this law would make companies
ineligible for federal grants or loans for five years if they move jobs overseas. According to an
article in The Wall Street Journal, “The bill seeks to penalize companies up to $10,000 a day if
they don't inform at least 120 days ahead the secretary of the U.S. Department of Labor about
any relocation of call center jobs to locations outside the U.S. The bill also seeks to make
companies to offer callers an option of a U.S.-based call center worker to speak to.” (Machado,
2011) Depending on your opinion of the topic, this could be a good or bad thing, either way the
bill died in congress and the threat of being penalized for offshoring was removed.
In summary, the offshoring of call centers begin in robust approximately in the 1990s.
The driver was cost savings for companies in the form of labor costs by almost 70 % in some
cases. Depending on your view point labor cost savings are not the only the advantage of
moving call centers to overseas locations, the jobs that are moved to the overseas location is
good for the local economy as well. In the end, with the death of a bill introduced to congress
attempting to curb offshoring, it does not seem that the practice will be discontinued any time
soon.

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References
Bucki, J. (n.d.). Offshoring - Definition of Offshoring . Retrieved 1 29, 28, from About.com:
http://operationstech.about.com/od/glossary/g/Offshoring.htm
Fluss, D. (n.d.). Offshore call center outsourcing: Is it saving money or costing you? Retrieved
01 27, 2013, from SearchCRM: http://searchcrm.techtarget.com/opinion/Offshore-call-
center-outsourcing-Is-it-saving-money-or-costing-you
Machado, K. (2011, 12 21). Very Low Possibility For US Outsourcing Bill To Become Law -
Nasscom . Retrieved 01 28, 2013, from The Wall Street Journal:
http://online.wsj.com/article/BT-CO-20111221-707599.html
Murray, S., & Belkin, D. (2010, 10 2). Americans Sour on Trade . Retrieved 01 28, 2013, from
The Wall Street Journal:
http://online.wsj.com/article/SB10001424052748703466104575529753735783116.html