Contact Centers See a New Focus on Onshoring

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Deloitte Digital found recently that 58 percent of service organizations are currently outsourcing at least some portion of their needed agent capacity, a percentage that it expects to grow to 64 percent in two years. This comes as 63 percent of contact center leaders said in the same survey that they face staffing shortages, forcing them to be more creative and proactive in finding and hiring agents and, especially, retaining those they already have.

The research forced the firm to conclude that today, pressures brought by a slowing global economy and the tight talent market are challenging conventional thinking and rewriting the playbook for effective, efficient customer service. For many, that involves bringing previously outsourced contact centers in distant foreign lands closer to home, either directly within the United States or in countries nearby. Others have added to their onshore staffs rather than moving to offshore or nearshore locations.

Cost is the main reason that companies have traditionally gone to offshore contact center operations. But every few years the trend of companies going offshore, nearshore, or onshore shifts, says King White, founder and CEO of Site Selection Group, a provider of advanced location analytics, economic incentive negotiations and compliance, and corporate real estate solutions. “Labor costs in offshore markets are as much as 70 percent less than in the U.S., so [contact center operators] have to be prepared for the price difference. There are also a lot of operational challenges.”

Moving contact center operations is a complex process that requires preparation and strategic thinking, says Dave Hoekstra, product evangelist at Calabrio, a contact center workforce solutions provider.

Planning is complex because it needs to take into account the total cost of operations, including taxes, labor, maintenance, utilities, and other facility-related charges, White adds. The availability of labor, the skills of the available workforce, competition from other contact centers for labor and facilities, and wages offered by direct competitors and by companies in other industries competing for the same supply of workers are other considerations.

While cost is the main reason for companies to look to foreign contact centers, the reasons for bringing those operations onshore are far more wide-reaching, according to Smitha Baliga, CEO and chief financial officer of TeleDirect Communications, a contact center solutions provider. While these can vary depending on the situation or company, some of the common reasons that are often cited include the following:

  • Time zone advantage:Bringing call centers back onshore allows operators to provide support at the times when their U.S. callers need them and save money by not having to pay premium wages to agents working off-hours overseas.
  • Improved customer experience: Onshoring allows for crafting an experience that lands with their American consumer base.
  • Quality training: Having call center employees onshore allows supervisors and managers to better implement best practices and ensure each call is held to internal standards early in the employee on-boarding process.
  • Fewer compliance concerns:Having contact centers on U.S. soil allows for easier compliance with regulations at the federal, state, and local level.
  • Increased efficiency: Bringing contact centers back onshore allows operators to be responsive and easily able to adapt to changes within the industry and larger market.

For some, there might also be a cost savings when security and compliance are factored in, adds Aaron Painter, CEO of Nametag, an identity verification solutions provider. With half of call center requests related to password issues, cybersecurity needs to be priority No. 1, along with protecting employee and customer data, he adds.

Hoekstra notes that there are indisputable advantages to reintroducing vital components, like voice channels, back home. Agents who possess a deep understanding of the company’s culture and principles are more capable of empathetically and sympathetically communicating with customers, thereby enhancing brand loyalty and reputation, he says.

Contact center operators looking to relocate need to consider several operational challenges, White stresses. “They need to have all of their management and systems in place to make it happen. They also need to take into consideration [capital expenditures] from a functional IT perspective as well from a pure construction perspective to make the transition happen. They need to maintain redundancy during the transition. It creates a lot of challenges.”

Among the factors impacting capital expenditures are state and local taxes, the availability (if any) of tax incentive programs, etc.

“There are 925 metro areas in the U.S.,” White says. “There are a lot of pros and cons to different locations. We carefully evaluate call center market saturation: Are there too many call centers in a particular area? What is the political climate? The ease of doing business? We try to operate in business-friendly states. On top of that, we see which cities and states have economic development funds—economic incentives, cash grants, tax abatements, and training subsidies—that they can provide.”

Another crucial component that is frequently missed in the rush to transfer operations is documenting processes, according to Hoekstra. Getting valuable process knowledge from their offshore experts’ minds and turning it into repeatable procedures is a challenge that many companies face. To make sure nothing is lost in translation, this documentation process takes a lot of time and requires an acute eye for detail.

Another management consideration in reshoring operations is whether the processes need to be changed as part of the transition, Nametag’s Painter says. “Do I do a lift and shift? Do I literally take what I have and move it to a different location and stay with the same processes? Or do we want to do things differently? Do we want to lead some sort of transformation, either for the end user experience, for security, or for cost savings?”

For help desk communications, for example, half of all calls involve users who are locked out of their accounts. Transitioning those calls onshore could offer the opportunity to automate them, enabling the contact center to handle more interactions with fewer agents, according to Painter, who notes that this could negate some of the offshore/onshore employment cost differential.


But the relocation of a significant workforce could disrupt operations and jeopardize business continuity if not handled correctly, Baliga cautions. To guard against that, she recommends creating strong contingency plans and transition strategies; using cloud-based contact center solutions to facilitate remote work capabilities; and taking advantage of multiple domestic sites for increased redundancy and scalability.

“The decision to transition back in-house does not need to happen overnight,” Hoekstra says. “Restoring agents to U.S. shores gradually facilitates a more seamless transition and reduces the possibility of operation and customer service interruptions. Additionally, businesses can efficiently allocate their resources by realizing that some channels, such as email and chat, might be more appropriate for offshore operations.”

Making wise decisions and exercising strong leadership are critical to successfully navigating this transition, Hoekstra adds. “Working with the right partners is crucial if you want to achieve your long-term goals and value quality more than money. Even though offshore outsourcing may still be appealing, businesses need to balance the risks and uncertainties involved with any potential gains. In the end, while right-shoring investments may appear costly at first, it pays off in terms of improved customer satisfaction, brand reputation, and overall operational efficiency.”


Regardless of where the contact center is located—whether onshore or overseas—labor issues could be an issue and must be weighed carefully, experts agree.

“Finding and recruiting an adequate number of skilled agents within the country can pose challenges, particularly in highly competitive job markets,” White says. “This challenge is further exacerbated by the prevalent issue of high attrition rates in contact centers.”

Contact center operators, therefore, need to look not just at labor costs in a particular market but also the availability of people capable of doing the job. Students at local colleges and universities can offer a ready supply of staff, White says.

It’s also important to look at market saturation, which can lead to excessive attrition, especially if you’re not paying the same wages as other employers, he adds.

While Site Selection Group doesn’t get directly involved in hiring or staffing, once it identifies a site for a contact center client, the firm will make introductions to local staffing agencies. Training tends to be the purview of the contact center operator, Baliga says.

Addressing turnover is critical, especially with higher onshore pay rates, says Lisa Leight, chief marketing officer of Convoso, a contact center software provider.

“There are numerous drivers behind turnover, including higher stress levels for frontline customer agents. We hear from our contact center customers that the biggest factor driving improved morale and lower turnover is ensuring that agents succeed,” she says.

Ensuring success means, in part, that agents have the right tools for success, Leight adds. “The integral driver here is connection rate or contact rate—how often your agents are on the phone connecting with live consumers. Ensuring you have the technologies and processes to maximize contact rates goes a long way to driving agent success and, in turn, greater retention.”

Beyond those technologies and processes, Leight recommends the following:

  • Ensure access to real-time analytics and robust, customizable reporting to monitor agent performance.
  • Minimize nonproductive agent time. A big killer of agent productivity is the time spent by outbound agents listening to voicemail messages. Ensuring that your platform can detect answering machines will significantly reduce the time spent listening to and dispositioning answering machine pickups.
  • Optimize onboarding of agents. Getting agents up to speed as quickly as possible is essential, especially with higher rates for domestic agents. Contact centers can leverage tools like dynamic scripting to guide agents, helping new hires gain proficiency faster. Dynamic scripting also helps with quality control and ensuring compliance with required disclosures.

Another important element in agent retention is training, White says. “Make sure you have great training protocols in place to train them, get them ready to get on the phone. Training agents properly can help them increase their skills and, therefore, compensation, another critical issue in workforce retention.”

Another issue with reshoring of contact centers is the regulatory environment, Leight cautions. “If companies are bringing back contact center operations that an offshore outsourcer was handling, they must be vigilant to ensure that they are up to date on all compliance requirements, which may include recent Telephone Consumer Protection Act regulations as well as state laws that have been increasingly popping up over the past several years. This may include calling day and time restrictions, maximum number of call attempts, etc.”

And a new threat is only furthering the onshoring trend: Companies are seeing an epidemic of social engineering attacks in their contact centers and help desks. Overseas reps have not traditionally been equipped with the right tools to deal with bad actors looking to exploit contact center vulnerabilities. Typically, the training and protections against these attacks are better onshore than offshore, many experts agree.

For whatever the reason, though, offshoring at one time was the low-cost answer for customer service calls, with companies racing to capitalize on the cheaper workforces in countries like India, Egypt, and the Philippines. This came at a huge price, as customer satisfaction suffered, due in large part to language gaps, hard-to-understand accents, and a lack of shared cultural understanding.

So now White and others are seeing that companies with the highest priority on customer service are bringing contact center operations back to the U.S. or expanding operations here.

“The highest-quality work is done in the U.S., hands down,” White says. “The service levels are better, and the skills are better. Customers are going to be happier when a U.S. agent is answering the phone.” 

Phillip Britt is a freelance writer based in the Chicago area. He can be reached at spenterprises1@comcast.net.

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