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The Debate over call center outsourcing

The question over whether call center outsourcing be allowed or be limited in number has economic and ethical answers attached to it. While some sections of the society are in its favor, others vehemently protest it. Outsourcing call centers has become a hot topic of debate with many citizens asking for legislation against it.

What are the advantages of outsourcing a call center? The labor costs in outsourced countries (mostly Asia) are very low. For example in India labor costs are about 10- 20 percent of what it is in the Unied States. The native workforce is skilled enough to take on the processes both in communication and technical skills. The widespread availability of the workforce is also an enticing factor. In 2002 India IT association NASSCOM produced a joint report with McKinsey Consulting. The report found that General Electric had saved a whooping $340 million dollars by outsourcing its operations to Indian shores! This figure gives an estimate on the amount of labor costs saved by outsourcing call centers. Many multinationals argue that the money saved on operational costs would let them divert funds on Research and Development which in the long run would enable them to provide products with better technology. Many economists believe that this trend may actually prove beneficial to the economy in the long run.

Dissent over outsourcing revolves around the loss of jobs in United States. Critics argue that for every job outsourced , a job will be lost. The IT research firm Forrester estimates that some 400,000 have been relocated since 2000 and this may go up to 600,000 in 2005.The projected figure for 2015 is roughly 3.3 million jobs outsourced. Critics believe that it is the moral duty of the government and reputed companies to check loss of jobs. The unemployment rate in United States is increasing and there is fear that given the cost advantages of outsourcing and a vast supply of skilled workforce, jobs leaving the US may never come back. The cost reduction which the companies achieve may reduce consumer prices and raise shareholder profits but will not help in creating any new jobs.