Obama and the Call Center Industry

Since the election of Barack Obama as the next President of the United States, much talk has been going around about his policies and stand on outsourcing among call center employees. My discussions with several people working in the BPO and contact center companies have been mixed.

I think he might have been misunderstood in his statements where he said he’s going to take some of the outsource jobs back to America.

• What Obama might do is give some tax breaks or tax incentives for companies if they retain employees in the US. That way, US companies might be persuaded to keep jobs in America rather than offshore.
• The ratio between the salary of a call center employee in the US compared to the Philippines is in the magnitude of 6 to 10 times. So for every call center employee replaced in the US, at least 6 new hires are made here. I can’t imagine any sort of tax incentive that can offset that.
• Companies tend to outsource the entry-level to mid-level employees and retain the top managers and executives in the US. If there are shifts in this level, this is mostly with the offices in India where they still maintain the biggest operation.
• China is the biggest source of blue collar jobs for American companies. Most of the products of the big companies come from China — P&G, Nestle, Apple, Dell, etc.
• Obama didn’t specifically say it would the call center industry. He might have also meant the manufacturing or the blue collar jobs. There are around 100,000 call center employees in the Philippines (outsourced by the US, Canada and Europe). Compare that to the millions of laborers outsourced from China.

I think it would be safe to say that there won’t be any hiring issues for call centers in the Philippines once the Obama administration kicks in.