Recent reports say that U.S. firms are shifting their operations from India back to the U.S. in an effort to create jobs in the aftermath of the recession.
Atlanta-based AGL Resources Inc was once such firm that moved its call center back to the U.S. after Wipro Ltd. ran operations, the no.3 IT services firm in India. Other firms like United Airlines Inc., Chrysler Group, and Delta Airlines have also engaged in similar strategies early in the year. This could indeed be a problem for BPO firms, earning as high as $15 billion in revenue from back-office projects for the year ending on March 31, 2009.
The move to shift outsourced units back home comes amid the recession and in the wake of government bailouts. Coupled with that, regulations require that service centers now be run locally and this is coercing firms to shift jobs back to the U.S.
Executive VP of Utility Operations, AGL Resources, Hank Linginfelter, sad in a comment that the state of the U.S. economy at this time is ripe for investment and to create jobs, reports livemint.com. AGL was quick to note that consumer satisfaction was never an issue, since Wipro, which provided AGL’s back-end services, offered the best service to customers. However, AGL believes it is in the best interest of the company’s long-term operations to offer jobs within the U.S.
This decision by AGS to run its new call center from Georgia is expected to generate 75 new jobs on a local level. This will be the second customer care center for AGL in the U.S. and will be unveiled by June 1. The company expects to start a third customer center in New Jersey by December.
Incidentally, a report by NASSCOM, ‘Perspective 2020,’ revealed that the Midwest, including Michigan, offers a good substitute to Indian service centers due to its low-cost and availability of talent. The report highlighted that this is especially true of ‘culturally sensitive’ and ‘interaction-intensive’ services - both these factors are true of call centers.
Most analysts feel that these instances are spurred by legislation and some stem from customer dissatisfaction.
Gartner Inc.’s senior analyst, Arup Roy, said some firms are under pressure to create domestic jobs because they have taken state grants. Meanwhile, some laws require companies in the electricity and gas distribution business to place their call centers in and around the vicinity of the service area. Nonetheless, Roy does not feel that this trend should cause any alarm for outsourcers.