U.S. workers who complain about the outsourcing of jobs, whether in credit and collections or totally unrelated professions, have often been painted as protectionists or overly nationalistic.  And, as more U.S. credit managers begin to note that outsourcing, while sometimes successful in certain instances, is no panacea for cheap completion of certain credit and collections tasks, so do those based in international markets.

Increasing stories of problems and disappointments, including the level of savings and resulting quality of service, have led many NACM sources based around the world to halt plans for expanding credit function outsourcing.  Some are scrapping outsourcing almost entirely and bringing the jobs back to their hubs in the United States, United Kingdom or other first-world economic locations. The short version on the reasoning is that there are a lot of hidden costs and unintended consequences regarding quality.

FCIB European Advisory Council Member Angela Bradbury, ICCE, group credit and payables manager at Innospec, Inc., noted “it’s only cheap for so long.”  Bradbury, who will be speaking at an upcoming FCIB roundtable in London focus on credit as a business profit-center, added that outsourcing areas regularly see a lot of turnover, high competition for good workers and the quickly-emerging demands from new staffers for more responsibility or money.

“Within two or three years, the wage cost savings driving your decision to outsource narrows quickly,” she said. “It happened in Eastern Europe; it happened in India; and it’s going to happen in [new hubs like] the Philippines, I’m sure.”

Moreover, there is the real issue that customers simply don’t like the practice. Companies are open to bad public relations, as high unemployment in places like the U.S. and U.K breed discontent, as do recent reports that a New York-based regulator called Standard Charter’s money-laundering controls “deficient,” with outsourcing partially to blame for making questionable transactions in Iran possible. In addition, there’s the often-aired customer concern over accent and language issues. Whether real or mere perceptions, the issue is relevant for many.

“The U.K. population likes hearing U.K. voices on the other end of the phone,” said Bradbury who noted that some current big marketers claim to be UK call centers. “At a previous job, I did collections throughout Europe. Customers felt a need to have native speakers. The Italians wanted to talk with a native Italian speaker and so on. Even when we localized collections, we had to invest in native speakers.”

Courtesy Brian Shappell, CBA, NACM staff writer