About the International Report
The findings in the report challenge much of the received wisdom about call centers, which depicts them as low-skilled, footloose operations that are shifting jobs from advanced to industrializing countries – particularly India, but also South Africa, North Africa, the Philippines, and South America. Instead, the international survey documents the emergence of this sector at about the same time in many countries around the globe – roughly in the last 5 to 12 years.
Call centers serve a broad range of customers in all industry sectors and offer a wide range of services from very simple to quite complex. The sector is an important source of employment and new job creation everywhere. Moreover, the overwhelming majority of call centers in this study serves the country's own domestic market, rather than the international market. The majority of centers are in-house rather than outsourced operations and are relatively small in scale and scope.
The mobility of call center operations has led many to view this sector as a paradigmatic case of the globalization of service work. And we find that the call centers do have certain characteristics in common – especially in their market scope, service offerings, and organizational features. A substantial proportion of centers do follow a cost-minimisation approach, with high levels of standardisation.
But there is little evidence of convergence towards a ‘global call center model’. Instead, these workplaces take on the character of their own countries and regions, based on distinct laws, customs, institutions, and norms.
The ‘globalization’ of call center activities has a distinctively national face. Centers vary considerably in their approach to the design of work and the quality of jobs, human resource practices such as training and performance management, and collective bargaining structures. Managers adopt a range of alternative strategies to customer service, from transactional to quite professional. These differences arise from distinct national and regional institutional environments, business strategies, and operational choices.
Differences in labor market institutions are one major source of differentiation. In the coordinated economies of continental Europe, a high proportion of call centers is covered by union and works council representation. In these countries, employers and employee representatives often consult or negotiate over work design and human resource practices.
Compared to centers in liberal market or recently industrialized countries, those in coordinated economies have better quality jobs, lower turnover, and lower wage dispersion. Call centers in coordinated countries also make greater use of subcontracting and part-time contracts as strategies to increase organizational flexibility, and this is likely to be a means of circumventing labor market regulations.
While institutions shape variation across countries, alternative business strategies help to explain differences within countries. Of particular importance in this sector is the use of customer segmentation strategies. Centers that target a unique customer group are able to design their management and employment systems to match the demand characteristics of that group.
Thus we found, for example, that compared to mass market call centers, call centers serving business make greater use of sophisticated customer relationship technologies, offer better quality jobs, pay higher wages, use team work more extensively, and employ a greater proportion of full-time permanent staff. They do this as it enables them to provide better quality service and to meet the more complex needs of business customers.
The different strategic and operational contexts of in-house centers and subcontractors also explain our finding that, in virtually all countries in the study, subcontractors differ significantly from in-house centers in their management and employment systems.
Compared to in-house centers, subcontractor operations have more standardised jobs with lower skills and pay, higher performance monitoring, higher turnover, greater use of part-time and contingent staff, and lower union representation. These attributes may be explained by their higher strategic emphasis on cost reduction and greater fluctuation in demand as they handle multiple client contracts.
In sum, the emerging international call center sector is a complex and rapidly changing landscape. While on-going cost pressures shape management practices, alternative strategies and institutional innovations are emerging that hold promise for quality jobs and service and offer opportunities for constructive economic development. As this sector continues to grow in size and importance, employers and public policy makers will need to consider what changes are needed to ensure its sustainability and its role in economic development.
Generous funding for this research has come from universities, government agencies, and non-profit foundations in each country. Particular thanks go to The Russell Sage Foundation, the Alfred P. Sloan Foundation, the Hans Böckler Foundation, and the Economic and Social Research Council of the UK for the support of international research coordination and conferences.
View the sponsors page for a full list of all sponsors. Call center employers’ associations also actively supported the study in many countries by encouraging members to participate. The report is not based on funding from private corporations or companies operating in the call center sector.