Click to Print

Bringing Work Home

You can go back home again. Many businesses are finding that homeshoring is a viable alternative to offshoring.
November 7, 2007
URL: http://www.entrepreneur.com/article/186482

The idea of sending U.S. jobs to India and other countries had a whole lot of people in a very big tizzy just a few years ago. Losing the jobs wasn't the only issue; it also turned out that offshore call centers had a learning curve to master. Many calls went smoothly, but others ended in miscommunication, cultural confusion and frustration, and businesses found out the hard way through low conversion rates and other customer service woes.

Business operation offshoring will never go away. Even person-to-person offshoring is booming, with consumer services like tutoring and personal assistants contributing to the industry growth that Evalueserve estimates will reach $2 billion by 2015. But another trend is also on the rise: Homeshoring is filling in gaps for businesses when offshoring isn't the right option. It turns out there's an underserved--and often very educated--workforce wanting to work from home, and the increased customer service is worth the extra cost.

Going Home to Find Workers
Stephen Loynd, an analyst with market intelligence and research firm IDC, has been studying homeshoring since 2004. He's found many factors driving people to work from home--and driving companies to want to contract with those workers.

In his first report in 2004, Loynd proposed a "confluence of factors" that would propel homeshoring. "Advancements in technology [and] improvements in Voice Over IP and broadband [make] it easier for people to work from home," says Loynd, who predicts an estimated 20 percent annual growth rate in the number of homebased agents over the next five years. "The high price of oil, which impacts the price of gas, impacts commuters who are asked to drive to brick-and-mortar call centers."

Loynd's most recent report on the homeshoring industry notes that the crashing housing market could lead even more people to want to work from home. Many workers already have been forced far from urban hubs by housing prices, and long commutes are becoming increasingly expensive. Plus, working at home makes people happy, and call-center agents in good moods are a boon to the bottom line.

"What we've seen is that when you offer somebody the opportunity to work out of their house, you oftentimes get a much happier, more optimistic and more productive agent; they're more responsive to the person on the phone and they have less stress and less pressure on them," says Loynd.

It also expands the talent pool to work-at-home parents and older workers--people who need part-time work, have extensive experience and may be more credentialed than their brick-and-mortar counterparts.

"Access to an experienced, educated workforce is really the primary reason to look to the U.S.," says Tim Houlne, CEO of Working Solutions, a call-center outsourcing provider that works with 75,000 home based agents in the U.S. Houlne says the main reason people choose offshoring is for access to less expensive labor, but that higher-priced U.S. agents can save companies money in the end. "The reality is that [you can improve] customer loyalty, conversion rates, average order value or customer service satisfaction rating with a higher quality agent."

Houlne sees these metrics as the key to growth for homeshoring. As companies are able to closely track these measurements, they can tell which call center solutions are working for them.

Another trend that both Houlne and Loynd have recognized is tiered call-center choices. Calls that require less intensive customer service may get routed to an offshore location, but those that could make or break a customer relationship are sent to a homeshored agent.

"The golden rule that 80 percent of the business comes from the top 20 percent of the customer base certainly factors into how you take care of those customers," says Houlne. "If it takes you two or three calls to resolve a transaction offshore because of the language barrier, the cultural issue or the dialect issue, then did you save money?"

The Case Study
When Jonathan Congdon was searching for a call-center solution four years ago for his company Product Partners, a direct-response company that creates and sells fitness and weight-loss products, he didn't specifically choose between offshoring and homeshoring; he was just looking for the best solution for his customers. That solution happened to be provided by LiveOps, a work-from-home call center with more than 16,000 home agents nationwide that's experienced average annual revenue growth of 60 percent or more.

"LiveOps does a great job making sure the calls are sent to the better agents for that product and making sure that agents are available," says Congdon, who estimates that his company takes between 30,000 and 50,000 order calls each week. "They can really pack in people virtually and be able to handle large spikes in orders. That's a big deal for us because we can generate thousands of calls in a very short time."

LiveOps is able to staff down to 15-minute increments, rather than hourly, allowing for more flexibility than brick-and-mortar staffing. Houlne, whose company also staffs in that manner, notes that having agents in different time zones is an additional big bonus for homeshored call centers. "[It's a] business continuity value proposition," says Houlne. "You have agents all across the country, like mini call centers, so if you lost one agent, you'd still have all the rest of your agents supporting that business. The same holds true for connectivity, as you look at outages from a telecom or a data internet standpoint."

When choosing between an offshore and onshore solution, Congdon suggests considering more than cost. "Obviously one of the big reasons people offshore is they want to save money and reduce costs relative to what they're paying to take an order," says Congdon. "You might find the money you're saving going offshore is offset by the money you lose by the initial customer experience, the way that somebody perceives the company that they're ordering from."