Last week, legislation was introduced to the House of Representatives, requiring companies to disclose when their customer service calls are routed to overseas call centers.  According to a press release by Congressman Tim Bishop, motivations behind this bill (H.R. 6309) include preserving domestic call centers, addressing privacy concerns and bringing work back to America. “Given proper information, most Americans would prefer that their dollars help keep their neighbor in a good job,” said Congressman Bishop. This bill is the latest in a recent flurry of government activity aimed at supporting the US call center industry and stimulating related job growth. The topic has experienced elevated levels of attention recently due to the economic climate and pending political elections.

In a time when 14.8 million workers remain unemployed, according to the US Dept. of Labor, it is understandable that government officials are honing in on initiatives to aid industries with the potential to employ more Americans. Based on the latest figures from market research firm, Datamonitor, there are an estimated 243,000 offshore agents currently handling calls from U.S. consumers. Imagine, if just a quarter of these overseas jobs were to be brought back onshore? It would create tens of thousands of jobs across the nation.

Demand for onshore and homeshore services has begun to increase in the past few years. Companies are rethinking their initial offshoring decisions because of unrealized cost savings, poor service quality and customer frustration. In fact, according to CFI Group’s 2010 Contact Center Satisfaction Index, customers who perceived their calls were handled offshore were 27 percent less satisfied than those who believed they reached a US worker. This customer backlash has forced companies to realize that providing high quality customer service is the best way to improve long-term profitability. However, while the business community has already begun to bring call center jobs back to the United States. on their own accord, it is often a slow process – too slow for some government officials.

Over the past few years, multiple bills have been introduced at the local, state and federal levels to bring overseas call center jobs back to the United States. My company, Alpine Access, has not lobbied for any anti-offshoring legislation and we do not officially endorse or oppose any of the proposals. However, with an employment base of more than two million workers, the US call center industry, including companies like Alpine Access that only hire US workers, would likely benefit from the passage of these bills.

Historically, proposed legislation has come in two forms: (1) attaching a stigma to offshore work by requiring companies to inform callers where their call is being handled and (2) mandating that certain call types or service functions be performed in a specific, domestic region or state. Recently, there’s been an uptick in a third form of legislation that takes more of a “carrot” approach, providing financial incentives and rewards to companies that hire and employ US call center workers.

Location-disclosure Legislation

Location-disclosure legislation requires callers be informed where the agent handling their calls is located. The impetus behind this type of bill is the fact that callers are less satisfied when they know their calls are being sent overseas. According to the CFI Group, customers reaching an offshore center are “far more likely to be shuffled to multiple agents before their issue is resolved, far more likely to have to call multiple times to resolve the issue, and have significantly fewer issues resolved overall.” Because of these problems, CFI Group found that customers were three times more likely to defect to a competitor if they were serviced by an offshore contact center. Forced location transparency could give businesses additional encouragement to look for onshore alternatives.

Examples of location-disclosure legislation include:

New York Senator Charles Schumer announced plans in May 2010 to introduce legislation that would impose a 25 cent tax (approx. 16 to 20 percent price increase) on companies for every call handled offshore. In addition to requiring companies to disclose to callers where their call is being handled, Sen. Schumer’s proposal would also add a reporting requirement for companies to disclose to the government what percent of calls are handled offshore. 

HR 3621 (Call Center Consumer's Right to Know Act) introduced in the House and referred to committee in Sept 2009 would require call centers to disclose their physical location to callers. 

Connecticut Senate Bill 417 requires telecom companies to inform callers where the call is being handled and to transfer the caller to a CT-based center upon request. 

Location-specific Legislation

Location-specific legislation either requires call center service be performed within specific US-based sites or prevents them from being outsourced overseas. While government agencies and industries like healthcare have historically had mandates or directives prohibiting the offshoring of certain types of work, including certain call types, legislators are now looking to expand the reach to other sectors.

Examples of location-specific legislation include: 

Ohio Executive Order 2010-09S issued by the governor in August bans the use of offshore centers for any work that involves public funds. 

HR 384 (TARP Reform & Accountability Act) introduced in the House and referred to committee in Jan 2009 included an Amendment that would prohibit TARP recipients from outsourcing new call center jobs overseas. 

New York Senate S4208B requires NY-based utilities to provide call center services in-state. 

New York Senate S7967 requires cable, telecom, and internet companies to serve NY customers out of NY centers. 

Incentive Legislation

Incentive legislation encourages businesses to provide customer service through US-based call centers by offering rewards such as financial benefits to companies providing jobs to US workers. These benefits can range from tax abatements, training grants, low-interest loans, and other incentives.

Examples of incentive or “carrot” type of legislation include:

Nebraska’s LB 1081 (Teleworker Job Creation Act) signed into law by the Governor of Nebraska in April provides economic development training grants to companies that hire and train home-based call center workers in Nebraska. 

Wyoming Business Council’s support of a workforce development training grant for companies that hire and train WY-based at-home call center workers. 

If passed, legislation designed to stimulate the US call center industry would likely have far-reaching effects. When businesses bring jobs back onshore, they stimulate employment growth and have trickle-down effects ranging from improved local spending and higher tax receipts. Additionally, through the use of onshore and homeshore service providers, the overall quality of customer service will increase, especially for industries with complex call types such as financial services, communication services and healthcare. Finally, studies show that businesses with calls handled domestically enjoy higher customer satisfaction rates, increased profitability and better stock market performance. With or without legislation, these are compelling reasons for companies to come back home.