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A Tax on Every Call?
A proposed federal tax on overseas calls has the potential to radically alter the contact center industry.
For the rest of the September 2010 issue of CRM magazine please click here
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In June, when U.S. Sen. Charles Schumer proposed a 25-cent-per-connection tax on calls transferred to foreign countries, the levy was positioned as an effort to secure American jobs. Callers would be notified when being connected overseas; outsourced phone calls would be documented and reviewed by the federal government. 

The Contact Centers of America (CCA), a provider of customer care solutions, claims to have been “formed specifically to bring jobs back to the United States.” Joe Jacoboni, CCA’s founder and CEO, says he supports the proposed tax to counter the industry’s tendency to go offshore. Describing himself as “heartbroken” about offshoring, Jacoboni argues that the effort to cut costs—“to commoditize the business,” as he puts it—has led many companies to implement overseas systems that produce dropped calls, inconclusive solutions, and customer frustration. 

“It seems like the industry went in the wrong direction,” Jacoboni says. After having fought with many colleagues over whether offshore calling is an effective way to improve “the bottom line,” Jacoboni still maintains that “if you take care of customer satisfaction, the bottom line will take care of itself.”

Having endured bad experiences with offshore calling, both as a customer and as a CEO, Jacoboni says that a return to American soil could benefit customers and businesses alike. “The ultimate opportunity we have is to develop a relationship with a customer,” Jacoboni says. “CRM is really a culture and an attitude…. I just don’t believe that offshoring could ever work…. It doesn’t matter how much training you give [foreign representatives]—until they really understand the culture, they’ll never be able to understand the customer needs and future needs.” He adds that, despite the technology, the reporting, and the management, “the rep is the most important asset and foundation of a contact center. All the rest is noise.” 

Chuck Wilsker, president and CEO of The Telework Coalition (TelCoa), agrees. “We are in hard economic times in the U.S., and yet there are hundreds of thousands of American jobs that could be done just as well here.” He says that he advocates a tax-incentive program for companies who use work-at-home agents (WAHAs) to discourage offshore calling.

Mariann McDonagh, chief marketing officer of inContact, calls Schumer’s proposed tax a “right church, wrong pew” effort marred by complications that will be borne exclusively by consumers. Echoing Wilsker’s concerns, McDonagh argues that any 25-cent tax would “just be passed along to the consumer” in the form of higher prices, while huge administrative costs and accounting disasters will be paid for by taxpayers. 

The proposed tax, Wilsker says, would not only “be a nightmare for organizations themselves, [but also] a hell of a financial burden—[and] it’s not going to do anything.” Both Wilsker and McDonagh say they’re most disappointed that the tax will provide little to no improvement in American unemployment, and that it wastes an opportunity to elevate the WAHA issue as a way to employ older Americans, disabled citizens, and stay-at-home mothers. 

“[There is] only one reason why companies have gone offshore,” Wilsker says. “People are not happy when they connect with people offshore.… When you place a call offshore you have customer dissatisfaction. It’s hard to put a specific dollar-and-cent to that.”

In fact, a cost-benefit analysis may already favor WAHAs, according to research by TelCoa comparing the cost of a traditional call to an onshore contact center, an offshore agent, and a U.S.-based WAHA. Measured by hours-per-seat, while the offshore agent costs 39 percent less than a traditional contact center agent, a U.S.-based WAHA costs 54 percent less. Customer support at inContact, for example, saved $3.4 million annually using WAHAs. 

According to IDC, training a teleworker costs $10 less per worker, per hour. Furthermore, Gartner research shows that teleworkers are 40 percent more productive than those in a traditional contact center. McDonagh and Wilsker also insist that domestic WAHAs generate higher first-call resolution, with fewer uncompleted calls.  

Wilsker and McDonagh attribute these promising numbers to many components, such as maturity, education, less distractions at the proverbial water cooler, and work-life balance. McDonagh notes that, while the average age of a contact center agent is 23, the average age among WAHAs is 38. “That’s 15 years of experience—work experience—[and] 80 percent tend to be [college-]educated,” she says. “Those are two really big things.” An at-home professional herself, McDonagh argues that using WAHAs “is the opposite of what people think.” She continues, “The biggest challenge is an overfocus—there’s not that ambient distraction in the air and you tend to just crank and be productive.” (See “There’s No Place Like Home,” October 2008, for more on WAHAs.) 

Jacoboni calls WAHAs “a viable resource” but isn’t convinced that they represent a solid alternative to the traditional work environment.  “I don’t believe in only 100 percent home reps,” Jacoboni says. “I believe that you have to have a culture. That’s part of what’s happened to our industry—the culture has gone away.… The culture emanates from the call center.” He strongly insists that only a few approaches can help employees “get that environment”: getting face-to-face time with managers, attending company functions, and building bonds with fellow representatives in person. 

Nevertheless, Jacoboni says, coaxing enterprises to do more onshore calling could be effective. “Honestly, I think it needs to be a double-edged sword,” he says. “The companies that do business offshore should have a disincentive tax, and encouragement to do business with companies onshore.” 


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