"Homeshoring" -The race to the bottom- "outsourcing"

"Because of the increasingly politicized debate about offshore outsourcing in terms of US jobs as well as concerns about quality and security, there has been a concomitant trend of companies utilizing agents working from their homes," said Loynd.


Need customer service? Just call home

By Diane E. Lewis, Globe Staff February 19, 2005

Not all call center work is going to India; some US companies are shifting customer-service call-center jobs to workers' homes.

Known variously as "homeshoring," "homesourcing," or "onshoring," the practice lets companies avoid medical insurance, overtime pay, and other expenses while guaranteeing a flexible workforce that can be increased or decreased as needed.

"This is the ultimate flexible workforce," says Barry Bluestone, an economics professor at Northeastern University. "It's when we need you, for as long as we need you. It offers tremendous flexibility for the employee, particularly for stay-at-home mothers and people with disabilities."

Yet the practice also has its drawbacks for the home-based worker, according to Bluestone.
"The downside is that it can be incredibly irregular employment in some cases," he says, "and it often comes with no benefits."

Of the 4 million call-center workers in the country, more than 100,000 are based at home, says Stephen Loynd, an analyst at Framingham-based research firm IDC.

Cost savings is the primary reason for the growth in home working, Loynd says. The owners of traditional call centers incur an estimated $31 per hour in real estate, operations, and labor costs, but virtual call centers spend about $21 per hour.

But the practice is also gaining momentum as a reaction to concerns related to sending work overseas.

"Because of the increasingly politicized debate about offshore outsourcing in terms of US jobs as well as concerns about quality and security, there has been a concomitant trend of companies utilizing agents working from their homes," said Loynd.

Already 20 percent of US firms rely on some home-based call-center workers, say consultants Booz Allen Hamilton.

The pay for these home-based workers is generally more than traditional office-bound agents -- $10 to $15 an hour versus $7 to $9 per hour -- although home-based workers are responsible for more expenses, and frequently are working without benefits.

Pamela Brackett, 41, of Bellingham, accepted a job with Texas-based Working Solutions, a firm that provides home-based workers to companies, in September 2003. Previously Brackett worked as a computer support technician and manager. When she was laid off, her rheumatoid arthritis forced her to limit her job search. Brackett is among 22,000 Working Solutions agents who make data entries, transcriptions, reservations, or perform other services from home. The job does not provide her with health insurance or other benefits.

Brackett said that her Working Solutions arrangement is a mixed bag compared to her previous job. "The other job had full-time benefits," she said. "But convenience is everything to me. No matter how badly I might be feeling, I can make it to my phone."

For companies, the advantage of a home-based workforce is clearer. In November, for example, Office Depot, the office supply retail chain, declared plans to shut down several in-house call centers and shift that work to Florida-based Willow CSN Inc., a virtual call center that employs 2,200 home-based independent customer service agents in several states.

"We had about a dozen call centers, and now there are two," said Brian Levine, a spokesman for Office Depot. "We announced that we would be doing this, and we are now phasing it in. We will save in the millions."

He said the company advised nearly 1,000 full-time call-center workers affected by the change to apply for work at Willow CSN.

Now, said Levine, "We don't pay benefits, so that is good from a business standpoint."
Alexa Bona, a research director at Gartner Inc., the business research and analysis firm, says companies save about 20 to 30 percent by not offering benefits.

Low-cost airline Jet Blue employs about 2,000 home-based reservation agents, virtually the entire department, in Salt Lake City. Unlike many contractors who work from home, the airline's agents receive benefits, said spokesman Gareth Edmondson-Jones.

But labor unions say that, benefits or no benefits, home work arrangements are not a boon to workers. "The employer has no investment in infrastructure and, frankly, workers can become disposable parts of the production chain," said Tony Daly, a researcher at the 700,000-member Communication Workers of America. "Yet, workers bear the risk. They put in their DSL lines; they outfit their offices; they pay for the phone calls or Internet service."

Willow CSN agents receive $13 to $14 per hour or more, depending on the hours. Compensation is based on the number of calls a contractor answers correctly in a certain period of time.
Esther DeJesus, 41, of Orlando, Fla., began working for Willow CSN a year ago. She says she answers calls for Office Depot and two other firms four days a week and some weekends, earning $1,300 to $1,500 every two weeks. She pays $37.50 per month to access the Willow CSN 24-7 computer support desk.

DeJesus relies on her husband's job for health benefits.

Working Solutions pays its contractors $10 to $15 per hour in 15-minute increments. Client estimates of call volume determine how many agents are assigned, said Tim Houlne, chief executive.

To do her job, Brackett uses her computer to connect with Working Solutions' central computer and exchanges information directly with the virtual call center's clients. She splits her hours, working from 10 a.m. to noon, 3 p.m. to 5 p.m. and 7 p.m. to 9 p.m. because she cannot sit in one spot too long. "I would not be able to work if I could not work from home," said Brackett. "If I had to go out to a job everyday, I could not keep it. I would have to call in sick too often. This allows me to continue to contribute to the household. My body failed me, but my mind did not."


Diane E. Lewis can be reached at dlewis@globe.com.