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U.S. Call Center/Back Office Operations Regaining Lost Ground

The United States is uniquely positioned to gain back the jobs in this now more knowledge-based sector that have been lost over the last decade.

Spring 2011
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  • Wage Inflation: Wage rates in mature markets such as India, the Philippines, Costa Rica, Guatemala, and Jamaica are increasing by 7-10 percent per year as compared to 2-3 percent in the United States. Wages have doubled in most of these markets over the last decade.

  • Employee turnover: The annual employee turnover rates within these countries have increased from 10-20 percent in the early 2000s to more than 70-80 percent today. Training expenses have also increased and employee quality has diminished.

  • Currency valuation: The weakened valuation of the U.S. dollar has affected near-shore locations like Canada and has impacted the savings opportunities in near-shore and offshore markets.

  • Availability of qualified English-speaking workers: As the markets have matured, the fast pace of the industry's growth, combined with escalating employee turnover rates, has caused labor demand to exceed supply in almost all offshore markets. Wage wars will develop and training costs will increase further as companies are forced to compete for qualified labor.

3. Consumer, political, and business continuity pressure - There are outside forces that continue to put a dark cloud over the long-term viability of many near-shore and offshore markets. Among the factors presenting greater risk for corporations considering offshore and near-shore strategies are the following:

  • Consumer pressure: Americans are completely fed up with the quality of offshore call centers. Consumers demand quality and corporations want customer loyalty. Offshore locations cannot satisfy both of these objectives.

  • Political pressure: Local, state, and federal governments are pressuring corporations to create jobs in the United States. The federal government has tried to pass legislation to hamper offshoring, while state and local governments are trying harder than ever to attract call center/back office operations.

  • Business continuity risk: There are three core business continuity risks that continue to plague the offshore and near-shore markets - terrorism, political stability, and weather. Many markets present one or more of these risks, which impact a corporation's ability to locate in certain regions of the world.

Call center/back office jobs have become a staple of the white-collar U.S. work force. It is critical that U.S. governments support the industry's growth and diversification as the nation is uniquely positioned to gain market share lost over the last decade.

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