Developments in the Call Centre Industry

Julia Connell, John Burgess, Julia Connell, John Burgess

• Publisher: Routledge
• Year: 2006
• ISBN:
  9781134248810
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Over the past ten years there has been a massive growth in call centres worldwide. These centres are said to represent the most dynamic growth area in white-collar employment internationally since the mid 1990s. Yet the footloose and global nature of the industry means that jobs will always be susceptible to outsourced operations, ICT developments, public sector subsidization of business restructuring and re-location, and cheaper operations elsewhere. This book conducts a thorough analysis ofthis modern phenomenon.

1 Developments in the call centre sector: An overview

John Burgess and Julia Connell

Not another call centre collection!

The title of this book Developments in the Call Centre Industry: Analysis, changes and challenges is indicative of the intention to reflect upon and analyse past, current and future scenarios for the call centre industry. Unlike earlier edited volumes, this volume is not focused upon developments within specific countries, or within a specific area of analytical research. The book showcases a diverse range of research issues, research approaches and research methods, while also covering many of the core issues that can be found in previous call centre collections and journal editions. This volume differs from earlier volumes in three obvious respects – it is timely, an important consideration given the ongoing growth and development of the sector; it incorporates studies of the call centre sector in countries where the sector is relatively new (India, South Korea and Greece); and it is generalist, in that it attempts to encompass the broad domain of research issues and approaches associated with the analysis of call centre work and workplaces.

Specifically, the book offers a meta-analysis of business process outsourcing in the US (Srivastava and Theodore), national studies that have not previously been published (on Germany and South Korea) and includes issues that have not received a great deal of coverage in the literature previously, such as the experiences and dilemmas facing call centre managers (Houlihan) and how unions organise on non-union greenfield locations (Rainnie and Drummond). Also incorporated in the volume are many contemporary call centre issues including: the design of HR strategies to meet conflicting organisational goals (Weinkopf); the nature of the jobs and skills required in call centres (Russell); the extent of control and autonomy exercised by workers (Lindgren and Sederblad); and the career prospects for women workers in the industry (Durbin).

This chapter provides an overview and summary of the chapters within the book. First, the editors place the call centre industry into context, before outlining some of the reasons why call centres have attracted so much academic interest. The next section presents the structure of the book before drawing conclusions.

Introduction

Over the past ten years there has been a massive growth in call centres worldwide, which has resulted in a parallel escalation in international white-collar employment (Bain et al. 2002; Richardson et al. 2000). In Europe alone, there are now over 15,000 call centres, with the growth rate in the number of centres averaging around 10 per cent, per year. It is evident that call centres are being established and relocated to all parts of the globe, with not only Europe but Asia, North and South Africa, Central and South America all possessing call centre industries (see Datamonitor 2005a, 2005b). As such, call centres have moved from being the product of internal restructuring of large organisations with a large customer base (such as banks, insurance companies, telecommunication companies and utilities) to independent and specialist service providers that encompass all services and all countries that have the requisite ICT platform.

The growth and development of the call centre sector is not only impressive, it is confronting. In the space of less than two decades, an industry has emerged that has transformed the delivery of business services, the nature of service sector work and the location where service work is conducted. The catalyst for this revolution is threefold. First, the means and the platform are provided by ICT. Through time, the delivery capabilities, the different media and the range of services available have expanded. From simple telephony through to texting, email systems and voice recognition protocols, call centres reflect the impact that ICT is having on work, production and organisations (Castells 1996; Tapscott 1995). The impact of ICT is profound, and its implications for work and the workplace are extensive (Felstead et al. 2005) forming the basis for bold projections regarding information work (Reich 1991) and a ‘post-employment’ future, where technology automates functions that were previously performed by labour (Rifkin 1995).

The second phenomenon concerns the restructuring or re-engineering of organisations that are, in part, facilitated by the ICT platform (Tapscott 1995). Organisations are restructuring, management structures and workforces are being reconfigured, and subsequently, the nature of work and careers is changing. Production processes and the workforce have been reconfigured to save costs and overheads, in order to produce ‘leaner’ organisations, with processes such as outsourcing and sub-contracting allowing organisations to drive down costs in response to competitive pressures. Commercial contracts now replace labour contracts, allowing organisations to assume flatter structures, raising questions about the future of internal labour markets and graduated career paths within organisations (Capelli et al. 1997). These processes extend beyond large commercial organisations, through to the public and not-for-profit sectors, where call centre development is also linked to the restructuring of organisations (Burgess et al. 2005). Through the utilisation of call centres, large organisations can reduce their core employee numbers and costs, while still benefiting from continuous, and in some cases, extended service provision. Indeed, one could say that the impact of the 1980s and 1990s public sector restructuring in many Anglo-Saxon countries (the UK, Australia and New Zealand) has demonstrated how organisations can be restructured and workforces reduced (see the case studies for Australia in Fairbrother et al. 2002). The possibilities offered by ICT, which are driven by the imperatives of competition and shareholder value, are enabling organisations to undertake production in different ways, with different forms of organisation and in different locations.

The third factor related to the growth in call centres, which is related to the other two, is that it captures how ICT and the externalisation of production have facilitated the restructuring of service sector work. The physical separation of the worker from the workplace and the customer is now possible. These new forms of organisation and delivery bring with them new possibilities in the division of service labour, and for different types of skills from the past (Frenkel et al. 1999; Shire et al. 2002). Service work can be restructured, relocated and organised, as per a mass production model, with a high division of labour and continuous operations. Hence, references to manufacturing industrial systems with routinised production and rigid forms of control and labour subordination, as outlined by Braverman (1974), have been referred to in numerous call centre studies (Taylor and Bain 1999; Bain and Taylor 2000).

The explosion of academic research on call centres has matched the emergence and growth of the industry. For example, a search on ‘Google Scholar’ unearthed around 39,000 articles that mentioned call centres! In the social sciences, call centres embody many of the debates and discussions that resonate across disciplines. To begin with, there is the future of work in an age where the extensive application of ICT offers potential for new ways of doing things, expanding markets, developing new products and undertaking work in different ways (Burgess and Connell 2005). The very nature of, and even existence of, work has to be questioned in a context where many processes and functions can be automated or performed by customers. Technology brings with it the potential for better and new work, while also bringing the potential to eradicate jobs, depersonalise and deskill work (Castells 1996; Rifkin 1995; Reich 1991). Also evident are the processes of globalisation, whereby production and work become a temporary phenomenon in a spatial context. Coupled with the capabilities of ICT, the globalisation of service sector work means that new jobs can be located in new spaces and those regions and workers previously excluded from the distribution of new wealth can be part of the global growth process. As Dicken (1998, p. 1) states ‘something new is happening out there’. However, this process is also, paradoxically, a temporal process with regard to call centres since they can be located anywhere, and can be superseded by new technological developments in service delivery. Production and employment can be shifted to new locations, supply chains can be extended and new networks and clusters of production can be generated (see the ICT and call centre cluster in Bangalore, India). For these reasons, these developments are not only about the transformation of work and production; but are also about the transformation of the workplace and the location of work (Dicken 1998).

The nature and development of call centres

Call centres are ICT-based workplaces that supply services to customers in diverse and remote locations via electronic media. Services provided include: inquiries, billing, marketing, advice, bookings, timetables, accounts and complaints handling. Functions that, at one time, would have occurred in-house and within divisions of large organisations (for example, accounts, bookings and marketing) can now be separated from head office and be relocated anywhere in the world, so long as the requisite ICT and labour requirements are met. In fact ‘contact centre’ frequently replaces the term call centre in the industry terminology, reflecting the fact that operations in addition to telephony, including email/web enabled transactions/texting, are now being utilised to deliver services to customers. The range of actual and potential services that can be located in a call centre is also increasing as communications technology is upgraded and new software is developed and applied.

Although each call centre has an ICT infrastructure platform that is supported by a workforce of operatives, managers and technical support staff, the appearance and configuration of each centre can differ (see Lindgren and Sederblad in this volume). There are differences between the types of ICT used, the services delivered and how production and employment are organised (Russell 2004). Nonetheless, the enduring feature of call centres is that they represent a new form of service delivery and employment. Work that was previously conducted within organisations is now performed elsewhere, often under conditions of mass production that, in turn, enables the realisation of economies of scale and an extended division of workforce labour.

In terms of industry evolution and development, it seems that call centres are moving into a phase of outsourcing and internationalisation (Taylor and Bain 2004). In Australia, it is estimated that approximately one-third of call centre functions are performed by specialist outsourced providers, and that this share continues to grow (Call Centres Net 2005). Processes of outsourcing and internationalisation offer cost and strategic opportunities and both are viable through ICT developments (see Srivastava and Theodore, and Taylor and Bain this volume). So, although examinations of the labour process within call centres have dominated earlier discourse on call centre operations (see Fernie and Metcalfe 1998; Taylor and Bain 1999), the evolution of call centres is now moving towards more automated processes and locations that are physically remote from head offices and customers.

While in the UK and the US the call centre industry has existed for more than a decade, in other countries it is almost a twenty-first century phenomenon (see for example, the studies of Greece and South Korea in this volume). Russell (2004) has likened the impact of call centres on service work and production to the impact of machinery on manufacturing work and production in the nineteenth century. New possibilities in delivering services are offered, and new forms of work are generated, often in new locations, requiring new skills and new forms of organisation (Frenkel et al. 1998). The type of work performed in call centres ranges from the mundane and routine (Bain and Taylor 2000), to skilled professional work (Colin-Jacques and Smith 2002). Work can be organised around strict factory regime type production models with tight monitoring and fixed production quotas (Bain and Taylor 2000) through to high performance work systems, built around teams and rewards (Kinnie et al. 2000). New job opportunities are offered in regions that have gone through post-industrial decline (Richardson et al. 2000) and new job possibilities and careers are offered to female workers (Hunt 2005). To ‘new’ service sector work we can add the strong attractor of internationalisation, or the more appealing term of globalisation. The call centre industry offers global possibilities and is growing in many less developed countries – leading to new jobs and a new international division of labour. This process is not, however, without its tensions and contradictions, with operatives sometimes being encouraged to hide their location and mask their ethnicity by pretending to be New Yorkers (tracking the progress of the Yankees), Glaswegians (Rangers or Celtic?) or Melbournians (comprehending Australian Rules Football) (see Taylor and Bain in this volume).

The call centre industry

Call centres are everywhere, except in the official industry data for each country. Even though they are more a way of conducting business via a different process, call centres can be labelled as an industry, operating in different locations and through different organisational forms than previously. The call centre industry is enigmatic, we know it is there, we can observe them and the activity taking place there, but it is difficult to collect ‘official’ call centre data. Call centres are an industry that has largely emerged over the past decade as a derivative of activities that previously occurred in other industries. In the call centre ‘industry’ elements of all other industries can be found. Indeed, call centres are a good example of how networking and business to business relationships can generate significant financial and efficiency gains. Likewise, all service occupations and professions can potentially be located in the call sector industry, including nursing (Colin-Jacques and Smith 2002) and social work (van den Broek 2003). While the origins of the industry can be traced to the restructuring of the delivery of front office customer relationships, the industry now encompasses both front and back office functions, as well as all service occupations.

As a result of the derivative nature of the industry, it is difficult to record accurately its scale and growth. So long as a service function can be removed from the need for the physical presence of a customer and the location of the industry service provider and relocated into a service centre, then call centre activity can be generated. As Russell states in his contribution:

The quest for productivity improvement in the service sector, the availability of new information technologies and the growth of multidimensional forms of global competition has promoted the development of customer contact centres as a format for the rationalisation of info-service work. Thus, call centres usually entail a concentration of labour. As in the financial sector, although by no means restricted to it, branch offices and face-to-face encounters are replaced by over-the-phone, voice-to-voice encounters, which can be more tightly scripted, and controlled through standardised training in designated processes. Smaller, over-the-counter offices and service centres tend to give way to larger call centres in the process.

In some cases, work and production stay within the organisation, in others they are outsourced to specialist providers. These differences compound the problems of tracking the industry – as internal call centres are included in the activities of the home industry, the outsourced call centres are part of the communications sector of the economy.

The call centre industry tends to be dominated by banking, insurance, marketing, travel, telecommunications and public services (Burgess and Connell 2004). Since the industry is part of the ongoing restructuring and reorganisation of other industries, it is easy to lose sight of the fact that many call centre jobs and operations were previously located elsewhere. As a result, the high growth rates for the industry could be considered an illusion. This is because although the industry (through its consultants) reports high growth rates in terms of call centre jobs and sales, these are frequently based on activities that had previously occurred elsewhere in the economy. Thus, while claims of activity and job growth for the call centre sector are undeniable, it pays to be aware of the ‘net’ impact of call centre operations since there is a displacement effect (that is the substitution of call centre work for service work located elsewhere) and an efficiency effect (that is, fewer people doing similar work owing to the economies offered by ICT, outsourcing and an extended division of labour). This means that the ‘spectacular’ growth of the industry has to be put in the perspective of job losses taking place elsewhere in the economy.

This process of ongoing evolution and development of the industry has extended beyond national borders to include the externalisation or offshoring of call centre activity to locations that offer extensive cost savings in service delivery. Hence, while there may be high rates recorded in terms of the number of centres and jobs being created in these offshore locations, again they represent the process of moving jobs that used to be in different locations, in different call centres or within host organisations.

Since the industry is difficult to classify and measure, much of the available ‘information’ on the industry originates from consultants and call centre service providers who have a vested interest in highlighting the growth and potential benefits of the industry to business, consumers, workers and communities. Consequently, there is a ‘supply side hype’ associated with projections and analysis, since extravagant claims regarding cost savings to businesses are made by those who have a vested interest in the ongoing expansion of the industry whether they be consultants, outsourcers or offshore service providers, or ICT system providers (see the chapter by Srivastava and Theodore in this volume).

Why the academic interest in call centres?

The apparent growth and proliferation in call centres has been matched by the level of research and publications on the topic. The call centre phenomenon embodies the ‘mega’ issues that impinge upon the future of work. As mentioned previously this includes: the impact of continued ICT development, the restructuring of organisations, the globalisation of business operations and the construction and delivery of service work. These are all profound issues that impact on work, work quality, jobs and living standards. As all of these developments are captured in the study of call centres, it not surprising that researchers have attempted to gain insight into these ‘mega’ issues. To date, there have been at least three collections that have brought together the contributions of call centre researchers from several countries, with differing points of focus. There is the examination of the reconstruction and delivery of service sector work (Frenkel et al. 1999), the labour process in call centres across the UK and Germany (Holtgrewe et al. 2002) and the issues associated with the organisation and management of the call centre workforce across several countries (Deery and Kinnie 2004).

Through call centres we can observe the contradictions and conundrums that are present in post-industrial work: the potential for subordination versus the potential for autonomy through ICT-based work (Russell 2004); servicing the customer versus being controlled by the customer (Korczynski 2001); developing new skills versus the erosion of traditional skills (van den Broek 2003); managing a workforce to deliver cost efficiency and service quality (Batt 2000); new work and careers for women versus a new and gendered division of labour...

Table of contents

• Cover Page
• Routledge studies in business organizations and networks
• Title Page
• Copyright Page
• Figures
• Tables
• Notes on contributors
• Foreword
• Acknowledgements
• Abbreviations
• 1 Developments in the call centre sector: An overview
• 2 Offshoring call centres: The view from Wall Street
• 3 Work organisation and employee relations in Indian call centres
• 4 German call centres between service orientation and efficiency: ‘The polyphony of telephony’
• 5 A national survey of Korean call centres
• 6 Skill and info-service work in Australian call centres
• 7 Gender, skills and careers in UK call centres
• 8 Community unionism in a regional call centre: The organiser’s perspective
• 9 Agency and constraint: Call centre managers talk about their work
• 10 How ‘Taylorised’ is call centre work?: The sphere of customer practice in Greece
• 11 Escaping the electronic birdcage: Workplace strategies in Swedish call centres