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'Making America Great Again' with U.S.-Based Call Centers

March 10, 2017

Throughout his presidential campaign and his first 7 weeks in office, Donald Trump has focused on bringing manufacturing jobs back to the U.S. In doing so, he’s creating fear and confusion throughout the global supply chain of manufacturing companies.


But so far, little attention has been given to outsourcing call centers, which is big business in countries like the Philippines and India. These are the service centers we call for answers about computers, cell phones, health insurance, and a myriad of other products and services. Bloomberg News notes that outsourcing in the Philippines generated revenues of about $23 billion in 2016, and is forecast to rise to $39 billion by 2022. It is projected to provide 1.8 million jobs by then, about 4% of total employment.


Outsourcing makes economic sense for U.S. companies. According to Bloomberg, the average cost of a full-time business process outsourcing employee in the Philippines is about $19,300 a year, versus $91,100 in the U.S.


That's a lot of jobs, and it's easy to understand why outsourcing companies in the Philippines, whose clients are mainly U.S. companies, are worried that Donald Trump’s plan to bring jobs back to America won’t end at just manufacturing but extend into services. 


“Trump is one of the biggest risks facing outsourcing revenue,” said Michael Wan, an economist at Credit Suisse in Singapore. “That comes on top of a more protectionist mood globally, not just in the U.S. The outsourcing sector will have to contend with that challenge.”


Notwithstanding the higher payroll and personnel costs associated with operating call centers in the United States, the idea of expanding call center networks here makes sense for several reasons.


  • The U.S. has transitioned from a manufacturing economy to a service economy. In 1990, manufacturing employed more workers than any other sector in 36 states. By 2014, manufacturing was dominant in only 7 states.
  • U.S. companies, such as Fidelity Investments, have successfully employed U.S.-based call centers.
  • U.S. call centers might reduce the difficulty many customers have when speaking with foreign operators: (i)  their foreign accents can be unintelligible; and, (ii) they often don't seem to understand American lingo and thus fail to readily grasp the nature of the problems we're calling about.


Be prepared. This discussion is just beginning.