The outsourcing debate moves up a level

© Mark Kobayashi-Hillary 2003
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The rumbling argument about the long term effect of offshore outsourcing is building to a raging crescendo as unions and outsourcers turn on each other.

The opposition is led by the Communication Workers Union (CWU), Amicus and UNIFI, along with other professional bodies such as the Professional Contractors Group (PCG). The CWU-led Pink Elephant campaign is an attempt to highlight the stampede of jobs to India.

The campaign organisers feel they are making headway as they have now been invited to debate the issue with government ministers. Peter Morris, policy advisor to the CWU Deputy General Secretary, said: “I believe that we can stop outsourcing or at least lessen its impact. Already, we are seeing problems with attrition, training and motivation in India. Things are far from rosy.”

BT recently raised the stakes by claiming that its new call centre team in India is better than those employed in the UK. BT Retail chief executive Pierre Danon was celebrating the success of the two BT call centres already opened in India when he said: “They are up to 40 per cent cheaper than the UK and the quality of service was sometimes better.” Peter Morris wants companies to try focusing on the long term customer relationship rather than short term savings: “If the quality of service is comparable then we can’t win the cost argument, so we have to get an edge. We don’t see outsourcing as inevitable; we see it as flavour of the month.”

Liz Cairns, a research officer at UNIFI believes that improving service quality is the key issue. Cairns said: “UNIFI recognise that UK workers cannot compete on costs and therefore, have identified ‘upskilling’ and moving workers up the value-chain to compete on knowledge. We are confident that training and retraining will increasingly be demanded by workers in the sector.”

At the July meeting of the National Outsourcing Association, the Deputy High Commissioner for India, Satyabrata Pal, dismissed the CWU Pink Elephant campaign as anachronistic. He said: “The CWU campaigners have the wrong end of the stick. The pink elephant would have been better coloured white.”

The unions are calling on the Trades Union Congress (TUC) to campaign against further outsourcing and to undertake independent research into the long term effect on society. A major fear is the fact that it is not just limited to call centres and contract programmers.

The research firm Irevna is an example of how times change. They provide company and sector research to investment banks in Europe and the US, with a large proportion of the research done by analysts in India.

If outsourcing can replace pinstriped stock market analysts then employment prospects look gloomy for any skilled employee, though the Department of Trade and Industry (DTI) believes otherwise.

Herbee Thomas has responsibility for coordinating government policy on call centre issues. Thomas believes that the government needs to maintain a hands-off approach to outsourcing as “damaging the ability of UK businesses to compete in international markets is likely to lead to more job losses in the longer term”. Thomas adds: “It is a commercial decision for companies to decide where to locate their call centres”.

With the government keen to support a free market without protection, it seems that outsourcing is here to stay and we need to adapt to a new way of working. However, the unions are passionate in their belief that this is a phase, much like the dot com era. It is also unclear whether the rising howls of complaint about job losses at MP surgeries will cut any ice at the DTI.

Whether outsourcing becomes a ubiquitous way of working or not, one thing is certain, the argument is going to dominate our lives for the next couple of years. Watch out for the Sanjeev Bhaskar scripted call centre love story coming to a cinema near you in 2004.

Mark Kobayashi-Hillary is a writer and independent consultant specialised in offshore outsourcing. Springer Verlag is publishing his new book Outsourcing to India: Primary Rules in winter 2003.

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