Every Man for Himself: Working in the Outsourcing Sector

Outsourcing companies currently employ millions of workers worldwide. In Central/Eastern Europe alone there are over 450 000 employees working in companies delivering so-called Business Services (CBRE, 2017).[1] I am one of these thousands. In this short piece, I will share some of my experiences after working more than two years as a foreign worker in one of the largest outsourcing companies in the world. These are years in which I have witnessed one of the fastest growing sectors in the global economy, and that eventually led me to join the Industrial Workers of the World union.

Outsourcing: Indians in Call Centres?

For many the word «outsourcing» conjures up images of call centres in India, packed to the brim with overworked locals taking calls on behalf of European and American companies. However, while India certainly has been a popular destination for outsourcing, it is far from the only or even most typical type of outsourcing. Outsourcing is firstly not always done to companies in far away, distant lands. The subcontractor may even be in the same country as the client (local outsourcing) or, more typically, in a country in a region relatively close by (so-called near-sourcing). In Europe, this region is usually Eastern or Southern Europe. Compared to more distant countries like India or China, Eastern and Southern Europe provide a quite similar culture and minimal differences in time zones. Moreover, the countries in these regions offer a cheap and highly qualified workforce. The cities of countries like the Czech Republic, Slovakia, Romania, Bulgaria, Poland, Portugal, Spain and Greece, are full of young and educated people, looking for employment. The last decade’s financial crisis, which has left millions unemployed, has further swelled the pool of potential employees for companies wanting to establish themselves in these low-cost countries.

Sometimes the line between what is outsourcing and what is not is blurred, as companies set up so-called shared services centres. Technically this is not outsourcing, as the tasks are still performed by the same company, only this time from a centralised location. In contrast outsourcing entails «hiring a party outside the company to perform services and create goods that traditionally were performed in-house by the company’s own employees and staff» (Investopedia, 2017).  Practically the difference is slight, as both the motivation for setting up these shared services centres (cost reduction) and the group of workers one draws from (the young and educated) are the same. Many of my colleagues have passed from outsourcing companies to shared service centres and back.

The Race to the Bottom

Some may wonder what motivates a young resourceful person to go work in an outsourcing company, especially given the sector’s quite shady reputation. This overlooks the possible opportunities these companies provide. What you are offered up front is concrete and genuine: a career in a multinational company. While the tasks may be menial at first, the promise of possibilities to grow and climb within the company will attract many to stay beyond the first months. The wage furthermore is good, at least by local standards. For many locals a job in a multinational company represents an opportunity to earn money otherwise unattainable. Last, but not least, the alternative is often not to work at all. On a continent where hundreds of thousands of young well-educated men and women go unemployed, the outsourcing sector provides an opportunity to earn a decent wage. For some of my coworkers, which like me came from the other side of Europe looking for a job, getting employed in the company meant moving out of their parents’ homes and acquiring their own income for the first time.

And indeed, initially many experience working in the multinational environment of the outsourcing company as liberating and exciting. On the face of it it may seem like a place where hard work and commitment will be rewarded and in which there are plenty of opportunities for a young industrious person to carve out for himself/herself a well-paid career. After a while, though, the realities of outsourcing will inevitably start to creep in. The main motivation behind outsourcing is to cut costs. Wages are a big part of a company’s expense, and one way of cutting costs is to use subcontractors that hire cheaper labour. True enough, there are other motivations as well, such as the possibility to standardise business processes or to tap into resources and competences not readily available in the company. However, the motivation to reduce costs is in reality so dominant that it affects almost every aspect of daily business in the company, at the worker’s expense. From the software and the hardware we use, to office supplies, to our wages, there is a relentless push toward cutting expenses. Where there is the tiniest opportunity to save a buck, the company will seize it, usually with no concern for the impact on the quality of the service they provide or the welfare of the employees.

Sometimes the push is so overt it is visible for everyone to see. When a multi-billion business can find no money for the most essential software or basic office supplies like pen and paper, there is no doubt what the reason is. Other times, however, the companies hide their saving strategies behind secrecy and lack of transparency. Salaries are most often kept confidential, meaning that the workers are bound to keep them secret from both outsiders and each other upon threat of disciplinary action. In the company I work we have had examples of people being fired over disclosing their salary to fellow employees. This willingness to forcibly ensure that the employees’ salaries stay secret have several reasons. First of all, it makes comparison of wages impossible, at least in principle. The ability to negotiate wages, individually as well as collectively, becomes seriously impaired. As a result the employees remain practically defenseless confronted by the companies’ push toward keeping the salaries as low as possible. Furthermore, it makes it possible for the companies to adjust the salaries at will, providing different salaries for the same job. As a consequence, it is not uncommon for workers doing the same exact job for the same client to have a difference in pay amounting to a hundred euros a month or more. These differences may be expressed in the contracts as bonuses tied to language proficiency or other criteria tied to the need and skills of the worker. In reality, though, bonuses tend to depend on the company’s evaluation of the value of the employee at the time of employment and the individual employee’s negotiation skills.

The result is a hierarchy among the workers, a division between those able to exploit the companies’ willingness to pay different wages for the same tasks and those unable or unwilling to do so. Despite what the employers may claim: in the outsourcing sector the sharpness of one’s elbow will determine the rewards your receive for your work a thousand time more than your results and merits.

Worker vs worker

This division between the employees generates an atmosphere of general distrust and disunity, as the employees compete for the favour of the company. Foreign workers, like myself, tend to be better positioned than the locals, especially when we hold jobs where language proficiency is important. Our command of our mother tongue and the cultural proximity between us and the client makes us more able to maintain a better relation with the latter.

A better relationship does not always entail a good one though. Quite the contrary, the relationship between us and the rank and file employees of the client company is often marked by mutual hostility. The employees of the client company may experience us bringing about disruption, change and, possibly, the loss of their job as we subsume their tasks. They are therefore likely to actively resist these changes or even attempt to sabotage our work. This behaviour, frequently mixed with rudeness, tends to frustrate our work for the subcontractor, as it makes our tasks harder and increases our work load. Too often this leads us to treat the employees of the client company with hostility and as an obstacle. Blinded by our immediate worries, we do not direct our attention toward those responsible, but instead direct our anger at those as powerless as ourselves.

The Robots are Coming

Meanwhile a slow, but steady move towards automation is unfolding. Several companies have already established teams specialised in robotics, applying the technology hailed as the future of modern business services. As the introduction on RPA (Robotic Process Automation) by one of the leading companies in the field, UiPath, illustrates, the possibilities offered by robotics is potentially revolutionary:

«Robots are here to stay. The faster you harvest their potential, the faster you create a competitive edge for your business. Robotic Process Automation delivers direct profitability while improving accuracy across organisations and industries. Designed to perform on a vast range of repetitive tasks, software robots interpret, trigger responses and communicate with other systems just like humans do. Only substantially better: a robot never sleeps, makes zero mistakes and costs a lot less than an employee.»

Reading this short exposition on the benefits of robotics it is not hard to imagine its attractiveness to a multinational company, especially one specialised in outsourcing. In the race towards cost reduction the employee is the largest obstacle, the single most expensive piece in the chain of production. Robotics promises to make it possible to bypass the human component by replacing it with a piece of software without will or needs. Not every job may seem suitable for automation at the moment, but the boundary for what is possible is continuously being moved as the technology is applied and refined. And as new ground is won for the robots, the future of the human employee becomes increasingly uncertain.

***

The management may be fond of reminding us that we are replaceable, sometimes even explicitly referencing a near future where robotics have replaced many of us. However, the truth is that the companies still need their workers, at least for now. Despite the centrifugal forces of an outsourcing company, pulling the employees apart and pitting them against each other, the employees still carry immense power, that is, if they come together and claim their rights.

At first glance the apparent obstacles to organising may be more visible than the opportunities. High turn-over and frequent internal rotation inside the company makes the shop floor appear in constant flux, with team members coming and going. The individual employee tends, as a result to adopt a short-term perspective on their work and colleagues, often opting for changing team or exiting the company than to stay and fight in the case of conflict. However, this lack of commitment from the employee’s side also represents a problem for the company, as the frequent changes in personnel carry immense costs in terms of recruitment and training of new workers. As a consequence there is a certain initiative from the management’s part in encouraging greater participation from the employees, hoping to stem the flow of the latter out of the company. This willingness to accept employee participation may entail that organising, at least in the beginning, may not only be tolerated, but even actively encouraged. If done discreetly, focusing  primarily on «harmless» demands in which there is a certain degree of common interests between the employees and the company, the establishment of a union could be easier than one would expect.

This initial positive attitude is however likely to vanish after the union has consolidated its presence across the teams and turned toward issues more sensitive to the company, such as salaries and working conditions. While this will be the moment where the company will find out how dependent it is on its employees, it will also be the moment where the employees must draw on support from a larger network of unions in order to survive. Confronting companies with an international presence and a far greater arsenal of support and resources, the employees may easily be pressured into submission if not receiving help. The IWW union represents an excellent framework for this, not only because it is global in scope similar to the outsourcing sector, but also because of its expressed goal to enable workers to aid each across borders and company affiliation. This is the main reason I joined the union, namely because I believe the IWW can and should play a central role in establishing a union presence in the outsourcing sector.

 

[1] This category includes both outsourcing companies and so-called shared service centers (more about the difference below). For the full report from CBRE on «Business Services Destinations in Central Europe 2017», click here.

 

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