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USEFUL INFORMATION There’s been extensive coverage of recent deals involving companies moving call centre jobs overseas. Some of the most comprehensive are: Unions that have started campaigning against the offshoring trend, including the A perspective on offshoring from the management point of view can be found at the organisation of Details of the DTI’s look at call centres can be found UNISON’s submission to the DTI’s study is available To read Acrobat PDF files you need Acrobat Reader software, which is available free of charge from the |
Thousands of call centre jobs are being transferred to India where workers are paid a fraction of Western wages. Critics say 200,000 British jobs will go by 2008 and the social impact on UK society could be devastating, as Gary Flood discovers
An offshore investment?
Last November, members of the Transport Select Committee were somewhat
startled to hear why the operators of the National Rail Enquiry service
proposed to close its UK call centres and move them to India.
Apparently the move would benefit the British railway passenger because
of the high number of power cuts that bedevil the UK and which constantly
disrupt the service.
Well, maybe. A much more likely explanation is that the Association of
Train Operating Companies, along with most commercial organisations, just
prefers paying its staff £2,000 a year instead of £12,000.
Indeed, at the start of February, the £100m contract was awarded,
with 250 jobs going to Bangalore and Bombay. The future of 500 existing
enquiry call centre jobs in Plymouth and Cardiff are now in doubt. Welcome
to the world of offshoring – the growing trend to move white-collar
jobs to developing countries.
Employers can do this because the power of communications technologies
like the internet mean phone calls can be routed easily to a call centre
operative in a different country. Equipped with your customer details
by computer, they are just as able to deal with your enquiry as their
predecessors in Newcastle or Edinburgh.
Offshoring is just part of the ongoing process of globalisation. Manufacturing
jobs have been moved to places like the Far East for decades; now it’s
the turn of white-collar ones.
Countries like India (see box) are attracting offshoring business from
Western companies due to the cheapness of its labour, English-language
skills, and high standard of education.
A growing range of functions – from writing computer systems to
processing insurance applications to basic drug industry administration
– is now being taken off Western workers and given at a fraction
of their wages to professionals in India, Mexico, South Africa, and the
Philippines.
Research from Amicus shows 200,000 UK jobs will be lost by 2008 to India,
and it also estimates 50,000 UK jobs have gone abroad in the past two
years.
Worldwide, institutions will make savings of $138bn by moving certain
processing operations offshore in the next five years. It’s all
about cost saving.
Employers may like the cost cuts, staff don’t. And there is a concern
we are seeing only the thin end of the wedge.
UNISON has more than 25,000 members working in call centres in industries
such as gas, electricity and water and also in the public sector in NHS
Direct and other operations. Fifteen hundred of its members’ jobs
have already been offshored.
The type of work moved abroad - or planned to - includes both IT and a
range of backoffice tasks, such as billing enquiries, meter readings,
change of customer address details and energy supply connections.
UNISON accepts technological advances and innovations in business processes
will intensify international competition, but any evaluation on the impact
of offshoring and the movement of jobs around the world “has to
be more than simply a market analysis”, says UNISON general secretary
Dave Prentis.
“It is not good enough to simply look at who pays the lowest wages.
The social impact of such changes on the UK also needs to be taken into
account. There has to be a commitment from the government to keep jobs
in the UK and not just let them flow to the other side of the globe. The
UK economy suffers adversely when jobs disappear overseas.”
UNISON also has concerns about the impact that offshoring has on training
and providing skills to UK employees. “Moving work abroad gives
employers the opportunity to opt out of such responsibilities, which again
has a negative effect when trying to build a skilled workforce in the
UK.”
To compound matters, call centres set for offshoring are currently based
in the very regions that suffered so much when the UK de-industrialised
in the 1980s. Such work is often of most appeal to women trying to juggle
work and family needs. When such jobs are lost in these regions it’s
hard to see what could replace them.
In November Norwich Union announced it would export 350 call centre and
2,000 IT staff jobs to India creating 2,350 jobs there, a move it said
would cut its costs by 40%. In January Abbey and insurers Axa made similar
announcements, involving 1,100 jobs. HSBC, Lloyds TSB and Barclays since
the start of the year have said they’ll expand their Indian operations
by a total of 6,000 staff.
At the same time, some UK companies have come out against offshoring.
Nationwide Building Society’s chief executive Philip Williamson
believes "call centres abroad may suit some of our competitors, but
they are not the right option for us,” as it announced plans to
increase investment in its UK call centres and create 180 more jobs. Legal
& General, the Alliance and Leicester and the Co-op are all reported
to have looked into offshoring but decided against.
Offshoring is becoming an issue in the US, too. As many as 400,000 US
jobs have shifted abroad and studies suggest three million may disappear
by 2015.
Cost isn’t the only attraction – staff in developing countries
are also conveniently non-unionised, and generally highly motivated to
be earning what’s a low Western wage but often four or five times
what teachers or doctors get paid locally.
What worries critics of offshoring is that as technology allows more sophisticated
job functions to go abroad highly-skilled workers may be priced out of
the market altogether, and leave less-skilled workers even fewer options.
So what does the government think? We’re waiting for the DTI’s
report on the impact of offshoring on call centres, due in March, But
we do know that for Tony Blair the picture’s clear.
For when asked in January about offshoring, the Prime Minister reminded
the House of Commons: "We live in an economy today which is global,
in which there is going to be a lot of changing of jobs, in which the
concept of nine-to-five jobs is changing, and has already changed."
Jobs moving to India, he added, was "the way the world is today".
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