Bill tabled in US Congress seeks call centre employees to disclose location

Legislation introduced in the US Congress could potentially curtail the competitiveness of the business process outsourcing (BPO) industry in India and other key offshore locations like the Philippines and Mexico. 

Introduced by Senator Sherrod Brown from Ohio, the piece of legislation, if passed, will require call centre employees to disclose their locations and give customers the right to ask to have their calls transferred to customer service agents in the US.  The item of legislation also proposes the creation of a public list of companies that outsource call centre jobs and provide preference in federal contracts to firms that have not shipped these jobs overseas.

This, however is not the first time such a proposal has been introduced in the US. In 2013, a similar piece of legislation, which was introduced by Congressman Tim Bishop and supported by many senators, did not see the light of the day.

Even though it is a proposal, the new Bill in its current form raises a big question mark about a model that the offshore-based call centre industry follows. Global companies outsource their call centre works to offshore locations such as India due to a host of reasons, the main being the cost advantage they enjoy. Besides, availability of an adequate number of call centre executives, especially in countries like the US, is another reason they prefer to have those managed in foreign locations.

Even though the call centre industry in India has matured over the years, voice-based calling services still account for a significant portion of their revenues. These calls account for around 38 per cent of the overall BPO business in India as compared to over 70 per cent in the Philippines. However, most service providers are using digital mediums, such as email, chat and social media.

“Right now, it is just a proposal and there are chances that it may not go through,” said K S Viswanathan, vice-president, Industry Initiatives at Nasscom. “Unlike Philippines, our dependence of purely voice-based services has declined. And the voice services that the Indian providers offer are more integrated with process and value added. So we don't see much impact.”

India is the largest offshore base for BPO companies, employing about 1.4 million people and with export revenue of close to $30 million. 

According to Raman Roy, chairman of Nasscom, who is also considered the pioneer of the BPO industry in India, there is nothing new in the proposed legislation as the option to transfer a call to a local agent in the US or any other country has always been there. However, it has never made a dent as it is commercially unviable. 

“Such a proposal also came up almost four years ago, but it went nowhere. One reason is it does not make any business sense to get the same call answered by a high-cost resource in the US whereas the same thing can be done here. At the end of the day, it’s our customers who determine what they want,” he added.  

While introducing the legislation, Senator Brown said that US trade and tax policy had encouraged a corporate business model that shut operations in Ohio and other locations and shipped production to cheaper locations. “Jobs at call centres are some of the most vulnerable to offshoring. Too many companies have packed up their call centers in Ohio and across the country, and moved to India or Mexico,” he said.

Newspaper reports quoting Brown also said the US lost 200,000 call centre jobs between 2006 and 2014.