In-Country Outsourcing

In-Country Outsourcing


One of my friends here works at a call center during the summer. Until this semester, I always assumed he was employed by whatever company the customers were calling for. But he told me the other day that heís actually employed by a company that focuses entirely on the call centers themselves, and that the company whose customers heís dealing with is actually outsourcing the work to the company he really works for.

I feel dumb for this, but I never really thought about outsourcing as something that happens between two companies in the same country. In my mind, outsourcing was always the thing that sent jobs overseas--not to my friendís hometown! My friend is making a legal wage right here in the U.S.A., so why doesnít the first company just hire him directly? I donít get it!

Donít feel dumb--Americans focus a lot on the practice of outsourcing jobs to other countries (86% are sure that the practice is common), and itís easy to forget that outsourcing is not synonymous with overseas labor. The reality, as youíve discovered, is that outsourcing happens right here at home--though this type is, mercifully, not quite as politically volatile.

Outsourcing companies are better equipped to hire the right people in the first place

The type of domestic outsourcing that youíre talking about is quite common. For instance, 70% of small businesses outsource their tax preparation work. Large companies do so, too--Polycomís telecom experts, for instance, have gotten work from no less a company than Microsoft. You asked, though, why companies donít just hire these workers directly. After all, your friend isnít making any less than he would make working directly for the company using the outsourced call center, right?

That may be so, but there are other ways that employees cost money besides in salary. Hiring and firing employees is expensive, as are benefits. For businesses (particularly small businesses) hiring new workers is risky. What if they later decide they donít need a certain type of work, or what if they have trouble finding a qualified candidate? Outsourcing allows one company to hire the accountants, call center employees, or other professionals so that individual client companies donít have to face the risk of individual employees not working out.

On top of that, of course, outsourcing companies are better equipped to hire the right people in the first place. Starting an accounting department from scratch is a tall order, but a company that has always specialized in accounting should find it (relatively) easy to hire the right person.

Itís easy to forget that outsourcing is not synonymous with overseas labor

That expertise matters on the job, too, of course. Ameridialís call center outsourcing service, which operates similarly to the one you described your friend working for, processes 100 million customer interactions a year. Outsourcing companies build experience that brand-new in-house departments wonít have.

The scale of a big operation like that call center also matters. Costs are lower when solutions are at scale, and a company starting a single call center and getting telecom services for that one center will be less efficient than a large call center company signing a big contract for telecom services at multiple centers. The efficiency allows outsourcing companies to offer low prices and still make a profit--allowing outsourcing to make financial sense even as your friend works for his full value.

Source : By Suzanne Hite, former publications editor serving the technology services sector.