Are call centres the factories of the 21st century?

When you think about Business Production (or Operations Management) it’s always easy to imagine some type of factory setting. But I try to increasingly think about service sector environments, and when I saw that “More people have worked in call centres than ever worked in the mining industry, and I researched that in 1998,” (according to an author who wrote a novel based on his experiences in a call centre) I read on.

The quote cropped up in a great BBC article and I have used the same title here for this blog.

You will be familiar with the idea of deindustrialisation – a long term economic trend that has seen manufacturing activity, which accounted for around 40% of the UK economy’s output sixty years ago to fall to only 8% of its jobs now. Of course, this is partly down to increasing mechanisation, but more to massive growth in the service sector. The rise of the call centre - known in the industry as contact centres - has seemed unstoppable.

When call centre pioneer Direct Line opened its lines in Croydon, south London, with 63 employees in 1985, few would have imagined the impact it would have on the UK’s service industry. Now over one million people are employed in contact centres. This is over 3.5% of the entire UK workforce.

Call centre jobs have had a bad press, both in terms of the employment opportunities on offer, and in the experiences of those people using them. What are some of the business issues associated with their growth?

The highest percentage of workers in call centres are in Scotland, the North East, Yorkshire and the North West - traditionally the industrial towns of old. Over 5% of all workers in these areas are working in call centres. The lowest percentage is in London. “You hear a lot of nonsense about why call centres started up where they did - accents and stuff like that,” says one analyst, “but that’s nothing to do with it at all. It’s all to do with a cheap, available labour force”. “They were predominantly set up as a way for companies to save money - whether the customers liked it or not,” says the chairwoman of the Contact Centre Managers’ Association. This desire to find cost savings gave the subject an extra twist a few years ago, as firms sought to subcontract or offshore the function to lower cost locations, especially in India. That dismayed UK unions (and UK customers too in some cases – I often see ‘we use UK call centres’ as a promotional ploy).

Working life in a call centre was pretty grim drudgery at the start: working with a pre-determined script and repeating it day after day. “The aim was to get everything done in 35 seconds, so there’s not really a lot of room for warmth,” according to someone who worked in a call centre until 2002. “The bonus system was very difficult because part of it was based on the people around you so people were thinking ‘why should I bother?’ when it only takes one person to not turn up for the figures to suffer and then there goes my bonus.” A criticism regularly voiced is the “quantity over quality” set of statistics by which workers are measured. Often, a certain number of calls have to be answered by each member of staff per hour, in the same way as factory workers are sometimes paid per item they produce (a ‘piece rate’). This grim vision sees call centres like a battery farm with repetitive work - just like factories from generations ago.

Of course, the industry is keen to change its image. Apparently around one third of UK call centre staff now have a university degree, and conditions are improving. “You don’t hear about workers having to put their hand up to go to the toilet anymore,” says one insider.

“Most people that come in see it as suiting their hours or go in there for a couple of years before they move on. What takes some people by surprise is that there is a career path - and you can move from the call centre into different parts of the business.”