OFFSHORING JOBS CONTINUES WHILE LEGISLATION STALLS
Three recent articles appearing on Bloomberg’s news website suggest that U.S. businesses are continuing to offshore call center and customer service operations to faraway lands despite problems inhibiting those foreign operations’ ability to service those businesses’ needs in light of structural changes required by the COVID-19 pandemic. At a time when Americans desperately need jobs, this continuing trend is truly disappointing, if not unpatriotic.
On June 10, 2020, Bloomberg posted a story entitled “Call Centers Discover WFH [Work from Home] Doesn’t Work for Them.” The story focuses exclusively on call center operations in the Philippines, which makes up 8% of the country’s gross domestic product and directly employs over 1.3 million people. The article notes that “U.S. companies outsourcing this kind of customer service benefit from lower labor costs while counting on their Philippine operators to keep customers’ confidential information safe within the walls of the call centers.”
But “[n]ow the coronavirus is testing that arrangement,” as “[m]any staffers won’t be returning to call centers and instead will be answering customer questions from their residence.” However, working from home as a call center operator is a huge problem in the Philippines because “many [workers] live in places with unreliable internet connections and unstable electricity supplies.” Additionally, much of the Philippines customer service operations involves sensitive materials, such as credit card and medical information, for which a myriad of U.S. laws imposes substantial penalties for violations of confidentiality requirements – compliance with which can prove difficult, if not impossible, when calls are made or received from workers’ homes.
To avoid those crippling problems, one might think that businesses would be inclined to repatriate their call center and customer services operations to the U.S. But according to the article, businesses are instead pressuring their Philippines operations to bring workers back to the office despite the safety concerns caused by the pandemic. “Our clients are going to ask us to bring people back simply because the infrastructure of work-from-home in the Philippines is not the best environment for contact center work,” one call center executive told Bloomberg. “If there is a four-hour power interruption, in our facility we have backup generators that ensure we don’t have a problem.” Another call center executive is quoted as saying that his company is “trying to keep in the office” calls that involve “really sensitive” customer information and to limit work from home to calls involving “no credit card information, credit information, health information,” or the like.
Thus, the article’s subtitle is, “Concern about data security, power outages, and poor internet service fuels a return to offices” – even though the article quotes a leading industry consultant warning about the dangers of such offices pose to workers in the Philippines. “These call centers are typically densely occupied, which makes it challenging to protect workers’ health,” the consultant told Bloomberg. “You can imagine that speaking all day would raise the risk of transmission.” But rather than repatriate such operations to the U.S., where such dangers are eminently avoidable, business apparently are squeezing their Philippine partners to endanger workers because allowing them to field calls from home is impractical if not impossible.
The same day (June 10, 2020), Bloomberg posted another article entitled, “An Indian Outsourcer Begins Bringing Back 150,000 Workers,” with the subtitle, “Team meetings and birthday celebrations are out. Thermal scans and tracking devices are in.” The article describes such working environments as “the new normal as India’s $181 billion IT services industry, which builds software and provides customer service for Wall Street banks, Silicon Valley giants, global airlines, and retailers, slowly goes back to work.” The article also describes how such Indian “outsourcers – long known for their teeming workspaces, packed company transportation, and standing-room-only cafeterias – are figuring out how to return their huge workforces to offices in an era where crowding is considered dangerous.” Indeed, the article reports that many such outsourcers, including Asia’s largest outsourcer, “say that they may never bring the bulk of workers back to offices” because the “cost of office space to allow almost half a million employees to work under social distancing conditions would simply be too high.” And yet, American businesses seem intent to continue to offshore their customer service operations to India, the Philippines, and other distant lands.
Indeed, on June 14, 2020, Bloomberg posted a third article entitled, “Philippines’ Outsourcing Sector Bouncing Back with Jobs on Offer.” The article reports that “[t]he Philippines’ outsourcing industry is experiencing a resurgence, with companies looking to fill thousands of positions as the pandemic forces other countries to move jobs overseas, according to the [Philippines’] labor department.” The country’s labor secretary issued an official statement claiming that – far from causing businesses to repatriate operations – “[t]he coronavirus outbreak and the global recession will force more companies in other countries to offshore jobs, a lot of which will go to the Philippines ….” And the article quotes the secretary as saying that “some big companies have already given notice for their requirements, one of which is needing at least 4,000 seats to be filled up before September.”
It seems increasingly apparent that the desperate need for American jobs caused by the pandemic-triggered shutdown of the economy, as well as the dangers and inadequacies posed by offshoring call center and customer service operations, are insufficient to induce U.S. businesses to repatriate such operations. In short, cost-cutting is continuing to trump quality, reliability, compliance, and economic patriotism. Further inducements are needed to right this wrong.
I have written previously about proposed federal legislation designed to halt the offshoring of American jobs, including the “United States Call Center Worker and Consumer Protection Act,” the “No Tax Breaks for Outsourcing Act,” the “Stop Tax Haven Abuse Act,” and the “End Outsourcing Act.” It is beyond time for Congress to pass these bills, all but the latter of which were originally introduced years ago. Our economy has been devastated, and Americans need jobs desperately, but U.S. companies seem unwilling to do what is no longer simply the right thing to do, but a national imperative. Our public officials must step into the breach.
Lauren Irwin-Szostak is the President of Business Processes Redefined, LLC, a call center solutions management firm headquartered in Fairfield, New Jersey which is certified as a woman-owned business enterprise by both the New Jersey Woman-Owned Business Enterprise (NJWBE) and the Woman’s Business Enterprise National Council (WBENC).