Homing In

The call center may become a thing of the past--home-shoring is poised to make its mark on the economy. What's in it for you?
Magazine Contributor
4 min read

This story appears in the August 2005 issue of Entrepreneur. Subscribe »

They say you can't go home again. But maybe you can, after all. Home-shoring--employing homebased, virtual workers in the U.S.--is the latest work-sourcing trend. There are already 100,000 homebased phone representatives working in the U.S., according to a November 2004 report by global market intelligence and advisory group IDC.

Companies are home-shoring for many reasons: Offshoring has become a political hot potato and a potential PR problem, and companies are encountering cultural, security, work-quality and language troubles when they ship work offshore. Dell, for example, redirected technical support calls back to the U.S. from India in 2003 after customers complained about the quality of service.

"Companies are finding there are certain types of calls where it's advantageous to have a [worker] in the U.S.," says Stephen Loynd, an IDC senior analyst and co-author of the home-shoring report.

Welcome Home!

Using homebased agents can be a cost-effective option for growing companies that can't--or don't want to--move certain functions offshore. According to data compiled by IDC, it costs $31 per employee per hour (including overhead and training) to operate a traditional call center in the U.S., compared to $21 per employee per hour to use homebased agents.

Research firm Gartner estimates that by the end of the year, 10 percent of call centers will use homebased customer-service agents employed through large U.S. virtual sourcing firms such as Alpine Access and WillowCSN. Office Depot already employs 1,400 homebased sales and service agents through WillowCSN, and if you make a reservation with Jet Blue, you'll speak with one of the company's 971 U.S.-based reservation agents who work from home. Jet Blue reports just a 3.5 percent annual turnover rate among these workers.

The homebased model is taking hold in the financial services, transportation, government, health-care and educational sectors, says Jim Farnsworth, COO of Alpine Accessin Golden, Colorado, whose clients include 1-800-Flowers and the IRS. Alpine Access' homebased agents handle 15 million credit card transactions per year and generally work 15 to 20 hours a week for one client, earning $8 to $10 an hour. These workers tend to be in their mid-30s and have at least two years of college education, if not more. The majority are second-income earners who prefer part-time work.

"The demographic is much older than the traditional brick-and-mortar call center," Farnsworth says. Alpine Access' clients pay a fee per hour worked or per transaction. Company sales are projected to reach $25 million in 2005.

Virtual work is poised to benefit rural and economically disadvantaged areas. Woodstock, Connecticut-based virtual assistant/virtual professional training firm Staffcentrixoffers a training program to military spouses at more than 40 U.S. military bases internationally. With the unemployment rate for military spouses averaging 25 percent, and the tendency of military families to move often, the option of working virtually is "a very promising development," says Michael Haaren, Staffcentrix's co-founder and an Army veteran.

Mary Hern, an Air Force spouse and mother of two in Norfolk, Virginia, participated in a Staffcentrix workshop in 2003. Today, she typically works 20 to 30 hours a week at home doing spreadsheet and data formatting for a large California technology company. Hern loves the arrangement and sees advantages for small employers weighed down by growing health-care and workers' compensation costs. "Sometimes, [the homebased worker's] hourly rate is more," she says, "but a lot of times, we save [employers] financially."

Many employers may feel daunted by the prospect of finding and managing far-flung virtual workers. Craigslist.organd the Rat Race Rebellion, Staff-centrix's subscription newsletter that lists telework jobs, are two places employers can find virtual workers. Entrepreneurs who master the art of managing projects instead of people will find a growing pool of virtual workers to tap into: A September 2004 International Telework Association and Council/Dieringer Research Group study estimates 44.4 million Americans now work partially or entirely at home, a 7.5 percent increase over 2003.

Farnsworth feels the forces are aligned in favor of home-shoring. The more unique a product or service is to American life, the more U.S. consumers will want to speak with someone who understands their lifestyle. "There are certain industries that are uniquely American," says Farnsworth. And nothing seems more American than finding a new way of doing things.

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