New research suggests that an increasing number of companies are opting to outsource their call centers to a highly exotic place: suburbia.
Framingham, Mass.-based researcher International Data Corp. (IDC) said the practice of employing work-from-home call center agents, or home-sourcing, is becoming a popular choice for companies that want an alternative to sending that work overseas.
There's no doubt that overseas outsourcing is good for the bottom line, and analysts expect the trend to continue indefinitely. Cambridge, Mass.-based Forrester Research Inc. predicts that about 3 million U.S. service jobs will be sent overseas by 2015. But companies that send call center work overseas are no strangers to customer complaints about language barriers and other miscommunication caused by differences in cultural norms.
"One disadvantage of sending work over to India, which I think some companies have discovered, is that even though you might train the people … they may be not as aware of exactly what goes on in the markets here," said Merle Sandler, a senior research analyst with IDC. "That can sometimes give rise to problems."
Companies have also found that displacing U.S. workers in favor of cheap overseas labor can be problematic from a public relations standpoint.
IDC said those mounting difficulties are why more enterprises are beginning to experiment with home-based call centers. Outsourcing to places like India is cheaper, but with home-sourcing, according to experts, companies are finding that they're able to provide a higher level of customer service at what is still considered to be a reasonable cost.
IDC reports that there are currently about 100,000 home-based phone representatives in the U.S., and that number is expected to grow. For companies that want to avoid going offshore, experts said home-sourcing is cheaper than having call center agents together in an office because there is less overhead. Oftentimes, experts said, home-based employees use their own hardware, reducing costs for the employer.
John Ragsdale, a research director at Forrester, said technologically speaking, there aren't any barriers to going with a home-based workforce. Ten years ago, when he ran call centers for J.C. Penney, Ragsdale said it wasn't so easy.
"It's getting easier because back then there were some huge challenges on the telephony side," Ragsdale said. "With IP telephony, it's not a big deal anymore. You can put an agent from their home into the call queue and route calls to them just as you would if they were sitting in [the office]. So, the technical challenges are kind of gone."
While the technology is sound, Ragsdale said some of the old challenges remain, and they generally fall into the areas of training and quality assurance.
Ragsdale said ensuring the quality of customer service is always easiest when supervisors and call center agents work together in the same room. But barring that possibility, the analyst said there are several vendors, such as Witness Systems, that sell software for recording agents' telephone conversations, as well as screen cam images of what the agents are typing on their computer screens. Ragsdale said these types of products are the second best thing to seeing call center agents in person.
Ragsdale said companies with local employees will have an easier time when it comes to training because they can have agents easily come to the office for training sessions. Companies with agents that are further spread out will have to invest in home-based training software and services.
Experts said all companies could potentially benefit from home-sourcing. But companies that do home-source will need to decide if they want to take on the task of recruiting a home-based workforce on their own, or contract with a third-party provider to hire the workforce for them.
Alpine Access Inc., Aspect Communications Corp., IntelliCare, West Corp., Working Solutions Inc., ARO and Willow CSN Inc. are examples of call center providers that make use of home-based reps, according to IDC.
Tim Himes, vice president of technology for Willow, said firms that typically consider going a third-party provider are those that don't consider running a call center to be among their core competencies; have trouble handling high turnover rates; and have problems with handling peak demand.
Himes, who said his company has seen a sharp increase in business over the past two years, said companies that want to contract with a third-party provider will first need to evaluate their IT infrastructure.
"If you're trying to build something off of their base, then you're going to have to evaluate the base system's ability to support remote connectivity, both from a data standpoint and a voice connection standpoint," Himes said.