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Do you have Centers in just one country? Today, you’re losing Growth; Tomorrow, you could be losing Business.

Earlier this year, at the PACE conference in Georgia, before Rethink Staffing itself had committed to a domestic location, I met a company that is a PACE member and partner you all know.  They provide superior sales services to large companies, many of whom are multinationals.  We got talking at the bar (that’s what I love about PACE conferences - serious conversations with a drink in your hand is 100% acceptable!), and realized that we had synergies.
 
In particular, they had an existing, large multinational client that had been impressed by their domestic sales work.  But, both they and the client were frustrated at everyone’s ability to scale that performant sales workforce domestically. And the client, which already had teams overseas in other divisions, wanted this PACE member to expand the workforce overseas.  But there's a catch: The member had no overseas operations, which is why we were talking.
 
A few months later, on a catch up call, we got on the subject about how many of their clients could be approached with a globalized labor force approach.  In particular, they were having a conversation with their client in one division of a large customer who said that they wanted to move to “single-source” with them. That meant this division wanted to rely on them for ALL of their labor outsourcing needs.  And the client shared more - that if they couldn’t get there, not only would their business not grow with this client, but the client could move their business onto someone who could serve all of their needs.
 
It was a wake-up call.  This company has had a successful 20-year history in the industry, and has served many clients successfully and faithfully.  Now, their largest client relationship could be threatened because they were ONLY a domestic labor provider.  The world was changing, but were they responding?

 
When globalization hit the call center industry in the mid-90’s, it was no surprise that cost was the biggest motivator.  Economic arguments are very powerful in business. Only such a powerful argument could motivate previously global-unaware corporate executives and managers to consider having their customer calls answered half a world away, with all that entailed.
 
Fast forward 25 years, and with the third decade of this millennium upon us in little more than a year, the tables may be turning. And only a mix of global and domestic work strategy is right for many executives and managers.
 
What does this mean?  If you’re a call center provider, and you have delivery centers in just one country today, your customer may want to give you business that’s not in the US, but doesn’t ask you because they know you only have domestic centers.  Worse yet, behind the scenes, without telling you, they could be considering going somewhere else in the future and not even giving you a chance to respond.
 
So today, you could just be losing growth with that client. Tomorrow, you could be losing that client.
 
The lesson here is that managers always must be looking at the economics of their individual situations to determine where in the world the work can best be done, considering cost, quality, production and Agent Happiness.
 
If you’re not already thinking about it, this story should be a wake-up call to those managers and owners of domestic-only businesses, or international-only businesses.
 
Your clients are increasingly looking for single sourcing solutions, where some of the work is done domestically, and some is done in various places around the world.  More and more clients, especially existing outsourcers, are simply assuming that their workforce now or in the future, will be globalized.  It’s their starting point, no longer their destination.
 
Ultimately, considering where to have work done should be a complicated calculus equation balancing value and risk. I think value and risk are two superior lenses through which to evaluate where in the world your client should consider procuring the labor they need to run their businesses.  Ultimately, this should be the crux of you and your client’s thinking. But that’s a different article.
 
If you’re a buyer, as I said before, likely the decision has already been made. Globalization is the only way to go.  Some domestic, some international - always a blend.
 
But if you’re a supplier, this trend makes it either interesting or dangerous for you (depending on your perspective).  In analyzing the possibilities that different types of outsourced call center businesses face, they can be divided into four broad categories.  In this analysis, I will divide these categories by headcount, because I think there are market position qualities in our business according to head count size that are relevant for this evaluation.
 
First, if you’re domestic or international only, and have less than 300 heads, in one or two centers, then you need to diversify immediately (either through partnerships or developing your own direct sales force). Otherwise, you will never have a shot at the larger customers that provide the stability and profitability that makes this industry great, as a business owner.
 
If you don’t, you will always only have a nice little business that does well, serving smaller customers ( and maybe one or two mid-sized businesses that needs you in just that one place). Your size will fluctuate throughout the years - fat years and lean years.  It’s not a bad life, but it  could become stagnant.
 
Second, if you’re domestic or international only, and you have between 300 - 600 heads, in several centers - you probably have the greatest possibility.  You’re big enough to have the money to deal with the problem, and you’ve also got a history of performing for your big clients. Such that, if they come to you with international plans, your answer should be “Well actually, we haven’t announced this yet, but…”  So if you’re not in a position to be saying that today, it’s time to update your passport and start booking some flights.
 
Third, if you have between 600 -1,200 heads, and you’re domestic only, you’re probably in the greatest danger.  It’s great that you’ve survived this long, and your people, processes and performance are probably kick-ass.  You deserve what you’ve built, but you’re on borrowed time with your largest clients.
 
So, it’s time to either partner up (in the short term) or consider overseas investments.  You will be positioning yourself much better strategically against the likes of eTech, Allied Global, KM2 etc., who were once in your position.  And you will have a shot at competing against these folks some day, and then maybe getting above that.
 
Fourth, if you have between 600 - 1,200 heads or more, and you’re international only, I say it’s time to move closer to the customer and open up something here in the US.  Your clients have work that they want to give to you that they want done here in the US.  And if you’re performant for them, probably all you have to do is ask. Within 6 months, you already have the MSA’s in place and you’ll get that additional work.
 
Unlike someone with a domestic only presence at this size, you’re not in as much danger, because there are so many companies still that are new to global outsourcing that you can target.  But you have to ask yourself why the big Indian outsourcing firms like Tata, and Infosys now have delivery centers here in the US.
 
[DISCLOSURE: Rethink Staffing is currently transitioning from the First to the Second category above, with the announcement of opening its Philly Call Center, so statements about the Third and Fourth category are gleaned from many first-person conversations with owners and operators in those two categories.]
 
If you’re a call center provider, I encourage you to evaluate yourself against these four categories, and maybe go a little bit farther and do a SWOT analysis against this problem.  I think you will learn a lot vis-a-vis your strategic position in the market, and more about the future of your company, as our incredibly dynamic market continues to evolve.  Who knows? Maybe your future as a business will get more interesting or more dangerous.  Hopefully the former!
 
Mike Dershowitz
CEO
Rethink Staffing
mike@rethinkstaffing