Commentary

Outsourcing to the den

Contrary to what you hear from certain pundits and politicians, we aren’t exporting America to India. In fact, offshore outsourcing only works for certain companies in certain situations. Companies have to go through a discovery process–often involving trial and error–to figure out what works best for them. Here’s another example of how experimentation is leading to different variations of outsourcing: Pick up the phone to book a flight with JetBlue and you might reach Margo Canaan at her rented home in Salt Lake City. While the single mother helps fliers pick their seats, her five children, ages 4 to 16, occasionally sit in the same bedroom-office doing homework. They know to keep quiet so Mom can do her work. Her uniform: everyday clothes, plus a pair of fluffy white-and-blue slippers shaped like airplanes. Canaan is one of 700 reservation phone agents for discount carrier JetBlue who don’t work in some telephone warehouse in New Mexico or in an office in Bangalore, India. They instead work out of their homes in America, their company computers wired into JetBlue’s reservation system. …. Operating a traditional call center in the U.S. costs about $31 per employee hour, including overhead and training. Home-based agents cost only $21 an hour on average … Sending those jobs to India would cut the costs even more, to maybe $10 an hour in wages and overhead. But JetBlue thinks the better service from home agents offsets that price advantage, notwithstanding the occasional barking dog in the background. Only one out of every 300,000 JetBlue passengers files a complaint for overbooking, baggage mishandling or other customer service problems, compared with three for big carriers like Continental and US Airways, according to federal data. Employees seem content. Agent turnover was only 4% last year, and the job is so popular that JetBlue rarely has to advertise to fill open positions. David Neeleman, the discount carrier’s chief, first used at-home workers when he ran Morris Air 12 years ago, well before offshoring became a political issue. His motivation was mainly to make agents happy, the theory being that happy workers sound better on the phone than morose ones. When JetBlue started in 1998, he put in the same setup. Other companies, such as AIG and Travelers, are making use of home workers, too. Those financial giants contract with ARO, a Kansas City, Mo.-based call center that only uses home reps. ARO owner Michael Amigoni says rivals have to justify investments in real estate for call centers. Slippers are cheaper. Of course telecommuting isn’t exactly new. But as technology improves it will become a more realistic option for more workers and more businesses. It could become even more viable if we got rid of regulationsââ?¬â??from unfriendly tax codes to zoning ordinancesââ?¬â??that pester home-based employees.

Ted Balaker is an award-winning filmmaker, journalist, and founding partner of Korchula Productions, a film and new media production company devoted to making important ideas entertaining.