Author: Virginia Doellgast
Publisher: Cornell University Press
Book Review by: Sonu Chandiram

This book is based on field research by the author in the United States in 2003 involving 427 call centers, and in Germany in 2004 on 154 call centers (in both places, randomly sampled), comparing the state of management-labor relations in the two developed economies. She interviewed nearly 300 key informants such as managers, workers and union representatives in these two countries.

The basic differences found were the following:

  1. German call center employees were paid higher salaries than those in the U.S.
  2. German employees had more control over their work than their U.S. counterparts.
  3. German employees were more likely to be treated as professionals, with flexible schedules and rules that protected them from ‘invasive electronic monitoring’ like some U.S. cases.
  4. German management decision-making included independent work councils that participated in democratic consultation and negotiation on work rules.
  5. German worker representatives used their participation rights to help managers find compromise solutions that reduced costs and improved productivity and service quality.
  6. On the other hand, U.S. unions struggled to enforce the limited terms of the collective agreements that they were able to negotiate, against an often hostile management.

Note that these studies were conducted in 2004 and 2003, or about eight to nine years ago, when there were many more call centers in Western countries such as in Germany, other European countries, and the United States.

Today, hundreds of call centers in the West have closed, and emerged in the East. At the outset, as I set to read this book, I thought to myself: Hmm. It is the developing countries in Asia that now have the lion’s share or bulk of the call center business around the world – probably 90 percent or more. And they will in time, surely take away the small balance of call center business still prevailing in developed countries like Germany and the United States.

So why worry about management-labor issues in call centers in just two countries that probably have a very small percentage of the total worldwide call center business? Why worry about work-life issues of these call center employees when eventually, their jobs are going to be outsourced to places like India, the Philippines and other countries?

In other words is it worth the time and effort to worry about or study something that will almost totally disappear, eventually?

One of the major types of services that call centers provide is business process outsourcing or BPO. This is currently a US$150 billion industry, according to a Wikipedia article. The Philippines has 788 call centers in 2012 (more than a third or 274 of which are in the urban Makati area) but specifics as to current annual revenues these call centers generated, or the number of people they employed, were not been provided in that Wiki piece.

In India, the 2012 total revenues of BPOs were around $11 billion. With 2.8 million employees in this industry, that works out to an average annual pay of around $3,930. This amount is less than 15 percent of the median $26,104 annual pay of German and U.S. call center employees providing BPO services. So due to globalization, or more specifically, global competition, most if not all such jobs in these two advanced nations will eventually disappear.

Nevertheless, while this book does not take a global view of outsourcing in general and call centers in particular, it sheds light on the quest of employees (particularly members of labor unions) in these two Western countries to try to raise their pay scales.

I suppose what the author wrote in her Preface about global trends in outsourcing proved to be prophetic: “In both the United States and in Germany, the number of call center jobs in workplaces with strong unions was shrinking. Market liberalization and technological change meant that telecommunications employers faced growing price competition in increasingly volatile markets.”

The ‘price competition’ she refers to is the huge 85 percent lower price in India for BPO services compared to rates in Germany and the U.S. and, slightly higher prices in the Philippines due to recent appreciation in value of its currency.