Cornell University

May 23 2007

Cornell ILR professor plays lead role in first major international study of call centers

Study findings challenge perceptions of call center management and employment

Contrary to what many people think, the large majority of call centers serving United States' customers – service centers in remote locations that handle telephone and web-based inquiries – are operated in the U.S., not in India and other overseas locations.

This is one of the findings revealed in "The Global Call Center Report: International Perspectives on Management and Employment." Rosemary Batt, the Alice H. Cook Professor of Women and Work and professor of human resource studies at Cornell University's ILR School, is one of the lead authors of the report.

The research project is a collaborative effort involving more than 40 scholars from 20 countries. It is the largest-scale study ever examining call center management and employment practices across the globe in Asia, Africa, South America, North America, and Europe and covering almost 2,500 centers in 17 countries. Consumers contact call centers, usually by telephone, for a variety of reasons, which include placing orders for products, activating credit cards, or getting information on medical diagnoses.

Some of the study's key findings:

  • Most call centers serving U.S. customers are operated in the U.S., not overseas.
  • The large majority of centers in all countries – except India – serve their own domestic markets and consumers. There is no common global face to call centers, since they tend to take on the character of their respective countries and regions based on that country's or region's laws, customs, and norms.
  • Most call centers are relatively new and have emerged in countries across the globe at about the same time, within the last five to 10 years.
  • Two-thirds of all call centers are in-house operations, serving a firm’s own customers. Subcontractors operate the remaining one-third of centers. In-house centers across all countries have lower turnover rates and higher quality jobs.
  • Staff turnover rates and costs are high. Turnover rates in the U.S. range from 25% to over 50%, depending on the sector. Taking lost productivity into account, replacing one worker equals between three and four months of an average worker's pay.
  • While union coverage is quite low in the U.S., over 50% of centers in the international study have some form of collective representation. 

Batt says that studies like this one are important since call centers have become a major source of employment and job creation here in the U.S. and around the world. Managing call centers, she adds, can be challenging because of their high turnover rates, which often lead to lower service quality.

"Consumers want good service, and they typically express the lowest levels of satisfaction with call centers. But companies continue to shift more of their customer interactions to call centers because they are very cost efficient. Studies like this provide empirical evidence of the kinds of management practices that produce lower turnover rates and better quality jobs. The findings in this report are consistent with others I have done. There is growing evidence that centers that invest in the skills of the workforce and provide discretion to solve customer problems have lower turnover, better service quality, and higher revenues," Batt says.

To read more about the study, go to http://www.globalcallcenter.org. Cornell University's ILR School is recognized as the world’s leading higher education institution for teaching, research and outreach focused on advancing the world of work.

Contact: Rosemary Batt, Cornell University ILR School, rb41@cornell.edu