The opportunities that outsourcing brings for enhancing global development also comes with serious social consequences for those who work for foreign companies. This article investigates call centers in India and their effects on gender, identity, and society.

Vinoj Abraham was a research scholar at Jawaharlal Nehru University and is presently an Assistant Professor in the Institute for Studies in Industrial Development, New Delhi. He has submitted his Ph.D. dissertation for evaluation on the topic "Labour Productivity and Employment in the Indian Information and Communication Technology Sector" to Jawaharlal Nehru University, New Delhi. He has published articles extensively on issues related to economics of labour and employment. Currently he is conducting research on service sector employment in India. He has also co-authored a book entitled Punjab Agriculture at the Crossroads (2005) and co-edited the book Industrialization, Economic Reforms and Regional Development (2005). He can be reached at: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Within the last five years, the outsourcing of business processes (BPO) has emerged as an important driver of globalization. The new technologies of information and communications (ICTs) have enabled enterprises to organize their business across borders in new ways and outsource some parts of their value chains across countries. This process has great economic incentives in that it has helped enterprises achieve more efficiency by keeping the niche business functions in value-chains with themselves while contracting out non-core business processes which results in substantial cost reduction. Therefore, outsourcing can build a foundation for accelerated economic growth and efficiency on a global scale.

Although outsourcing possesses opportunities for enhancing global development, it also creates wide ranging political, economic, social and cultural issues for both wealthier countries that export jobs (outsourcing receivers) and poorer countries that receive such outsourced jobs (outsourcing providers). So far the present debate on the topic has been mostly about the employment losses and wealth creation in the job exporting countries. The experiences of countries that receive outsourced jobs are yet to be addressed. In this context, the study of call centers in an outsourced-job-receiving country like India, which is crowned as the outsourcing capital of the world, is extremely relevant.

India in Global Outsourcing Industry

The rise of the global outsourcing industry and the importance of India as an outsourcing provider have been closely linked since the 1990s. A Lexis-Nexis search on outsourcing showed only 17 results between 1980 and 1990, of which none mention India¹. Among 371 articles that were found during 1990 to 1995, India figured in just two. Since 1995 onwards, the search resulted in 1,000 articles per year on outsourcing and the number of articles figuring India had grown dramatically. Between 1995 and 2000, India featured in about 171 articles on outsourcing. During 2000-2005, the figure jumped ten-fold to about 1,781 articles.

At present, India, with 44 percent of the global offshore outsourcing market for software and back-office services, has stood as the most dominant outsourcing destination in the world². Its outsourcing industry generated revenues of US$17.2 billion and provided direct employment to 1.05 million programmers and other skilled workers in the year ended March 2005. This apart, it has generated indirect employment to about 2.5 million people in support services such as transport and catering. As many as 400 of the Fortune 500 companies either have their own centers in India or are currently outsourcing work to Indian outsourcing firms. India is projected to increase its market share to 51 percent by March 2008. Outsourcing has not only improved living conditions for millions in India but has also helped job-exporting countries in wealth creation. For example, the banking and financial services sectors in the US are observed to have made savings of US$8 billion in the last four years by outsourcing to India³.

The Indian outsourcing industry is estimated to have been responsible for as much as 60 per cent of cost savings every year for companies outsourcing back-office work to India. The consulting firm McKinsey & Co. estimated that the cost of developing a new drug in the U.S. pharmaceutical sector would be reduced by as much as $200 million, from the currently estimated figure at between $600 million and $900 million, if the work is outsourced to India⁴. Although the process of outsourcing is causing employment losses in the short-run in outsourcing receiver countries, it will help them in moving to higher paying and more productive jobs in the long-run⁵. The phenomenon of outsourcing is spreading fast to new areas like automobile components and clinical research. Although it began with low-skilled activity such as answering routine telephone queries from customers on bank account balances, airline and hotel reservations, complaints and other sales support services, services have now expanded to cover a wide range of high-end BPO area like telemarketing, market research, billing and collection, purchasing and disbursement, order entry, cash and investment management, tax compliance, internal audit, pay roll, etc. Legal case research, medical research testing and financial analyses are now emerging as important components of high-end outsourcing⁶.

Indian Call Centers

Although outsourcing is now broad-based in terms of new areas, India 's emergence as the world leader in outsourcing has been mainly led by information and telecommunication technology-based offshoring services in the form of call centers (See Box 1 for the case of a typical call centre). From 2002 to 2003, the BPO industry generated more than 170 thousand direct employment opportunities and revenue worth Rs.113000 million (Table 1) of which the largest share of revenue and employment was generated in the customer care services such as Call Centers accounting for 38 percent of the employment and revenue share of 35 percent. India's success in building international call centers and continuously moving up the value chain is crucially dependent upon four factors: favorable time zones, quality infrastructure and skills in information technology (IT) and telecommunication, language skills of its English speaking population, and strategic government policy. The geographical location of India is such that the time differential between India and some time zones in the U.S. is approximately twelve hours which makes round the-clock work possible for firms in the U.S. The quality of telecommunications infrastructure in India has been improving dramatically over the years. With over 35,023 telephone exchanges with a capacity of over 38.6 million fixed line connections and 6.4 million cellular mobile phones, India host one of the largest telecom networks in Asia. The fixed line and cellular networks are growing at an annual rate of 21 and 80 percent respectively⁷. This has improved India 's cross-country ranking from 14 th position in the world in 1995 to 7 th in 2001 in terms of the size of main telephone lines in operation⁸. Another driving factor behind India 's high-end call centre activities is the availability of a pool of IT and technical manpower. India has built a large number of institutions enhancing technical, engineering and IT skills. It has about 1,270 technical (engineering, technology and Master of Computer Applications (MCA) colleges churning out a skilled manpower of two hundred thousand per year, 32 percent of which are in IT courses. In addition, specialized institutions like the Indian Institute of Technology, Indian Institute of Information Technology, and Indian Institute of Science, have yearly student intake of nearly 7,000, of which around 1,200 is in IT courses. The private initiatives in computer education led by enterprises such as National Institute of Information Technology (NIIT), Aptech, ICE, and ICS, are also impressive.

According to the interim report of the Task Force on HRD in IT, the non-formal sector has a substantial capacity of five hundred thousand and is growing at a rate of 20 percent. It is predicted that more than two hundred thousand post-graduates (including MCA's), seven hundred thousand graduates and 7.5 hundred thousand diploma holders in IT and related areas would be added to the Indian system by 2008⁹. Beside these technical and IT skills, India has the strategic advantage of language as its graduates speak English unlike those in countries such as China.

Government policy has also played a facilitating role in the emergence of Indian call centers as global players. The implementation of economic liberalization covering trade and investment and technology policies during 1990's has been the most crucial. Reduction in the import tariffs on technology equipment, deregulation of the telecommunications sector, and policy initiatives to reduce the cost of broadband access have played an important role. It is impressive that in just six years India 's telecommunication costs came down by 97 percent, creating a cost-efficient and high-quality telecommunication network¹⁰.

Indian Call Centers: Social and Cultural Effects

The tremendous growth of Indian call centers in the last few years has generated considerable social and cultural developments in Indian society. Both positive and negative impacts of outsourcing are discernable across different aspects of Indian social and cultural life, including language, identity, gender, and the emergence of western lifestyle.

Gender and Family

ICT has created new and convenient forms of work for women as this technology allows work to be brought home, and hence provides better accommodation of work and family. Internationally outsourced jobs make a difference in the career paths of the women workers in the ICT sector. In India's patriarchal society, the emergence of call centers is nothing less than a social reform movement as far as economic, social and cultural empowerment of women is concerned. Call centers often prefer hiring women as they are seen to be more hard-working, patient, attentive, loyal, less aggressive, and have better interpersonal and analytical skills than men. Thus, a booming call center industry has provided employment to thousands of young women in urban locations, earning salaries that are very good by Indian standards. Urban women, who otherwise might have remained unemployed and have married off young after graduating from colleges, are now being seen as assets to their family. Women employed in call centers are no longer bound by the traditional patterns of family control over daughters¹¹. Financial independence provided by employment in call centers has empowered women to be assertive and independent in their outlook, attitude, and career choice. The gender-neutral and international working atmosphere in call centers have the potential to further female empowerment.

Although call centers have quickly changed women's status in the family, they are slow in improving their social status¹². Employment in call centers for women is still considered to be less dignified work due to odd working hours such as night shifts, and is also sexually stigmatized. However, the image of call centers constantly being projected as women-friendly, the pursuance of the policy of zero tolerance for sexual harassment in the work place, and transportation facilities for picking and dropping at home have all gradually shed the urban middle class's inhibitions in saying that their daughters are working in call centers.

Research suggests that despite the improvement of working conditions in the sector, there is traditional gender divide in the "new economy" is persistent and widening. Patterns of gender segregation in the old economy can be reproduced in the new economy, despite its great potential to provide bias free employment opportunities. Gender segregation is still at play when men are able to appropriate the high-skilled, high-paid jobs while women have to be content with low paid, less skilled work¹³.

In a recent survey, however, Abraham (2005) has found that women hold almost equal positions to those of men in terms of responsibilities held. Survey results show that most women workers (nearly 91 percent) felt that there was no discrimination in the workplace in terms of responsibilities entrusted to them (Table 2). But 43 percent of them were unsure whether they were being discriminated on pay scales in comparison to their male counterpart. This could be mainly due to the individualized nature of wage fixation in the industry where salary information is closely guarded. The information economy has encouraged, more than any other sector, women to join the workforce. But a majority of women (61 percent) in the survey felt that the IT industry did not necessarily provide better opportunities for women workers in comparison to other industries. Also, more than one-fourth of the women respondents agreed with the view that climbing up the job hierarchy in the firm is more difficult for them than for men. While there does not seem to be any overt gendered policies and practices in the industry, there are subtle biases that hinder women from making professional advancement in the industry.

Outsourced jobs provide the possibility of flexibility in location and time and allow the workers to work from other than an office. Work can be carried out at home and completed at one's convenience. This makes it ideal for women workers who want to pursue with their careers even when societal and familial pressures would want them to be confined to their homes. But there can be an opposing scenario as well. The rising intensity of work on the job is one matter; for many, work is not left behind at the workplace after work hours.

The familial roles of male and female also get restructured due to the distorted boundary between work and leisure. For example, studies have shown a tendency, particularly for male workers, to use electronic technology as a means of continuing their separation from the family while spending time at home. Men tend to work in a separate room at home, while for women, telework and domestic work are more likely to be fused. The net result of the development of teleworking may thus be to reinforce gender divisions within the household, with men working in isolation from the family even during normal leisure hours, and women working in more integrated ways, spanning family and work activities even during working hours. Moreover, men seem to be more able to combine telework with continued involvement in an organization, potentially obtaining the best of both worlds, while women are more likely to be only teleworkers, with all the problems of isolation that this may involve¹⁴.

Culture

Outsourcing based on call centers comes with a package of cultural and value systems associated with western culture. One can argue that call centers are pivotal in bridging the cultural gap between the 'East' and the 'West'. As Indian call centers serve mainly customers from western countries, their employees are provided with opportunities and training in understanding the culture, accent, and customs existing in the outsourcing receiving countries. In this way, call centers have been crucial in providing millions of Indian youth working in call centers more exposure to the western culture. This gives them a different perspective about western way of life. Secondly, Indian call centers are emerging as an attractive destination for jobs opportunities for foreign language professionals¹⁵. A large number of foreigners are also working in the industry side by side the local Indian youth. It is estimated that the call center industry currently employs between 20,000 to 30,000 expatriates and its potential demand for foreign professionals is estimated to be over 160,000. This reverse brain drain where people from the UK and US are coming to work in India would provide a conduit for east-west exchange.

Multiple Personality Disorder and other psychiatric problems

The cultural impact of outsourcing is not as rosy as described above. Call centers have a profound impact on the cultural and social behavioral patterns of young Indian people and their families. Many call center workers are reconstructed in terms of western culture, accent, language, and identity (i.e. western pseudonyms) during their ten to twelve hours long work in the odd work shift. At the individual level, this creates a problem called Multiple Personality Disorder. The same person is divided between Sulochana and Sally, Krishnamurthy and Chris, Sahana and San, Hari and Harry, etc.¹⁶. The remaking of Sulochana into Sally in the image of their customers' requirements entails severe personality costs, as a person's name is very important to his or her identity, self-respect, and confidence. Using a different name, copying a foreign accent, and adopting an alien persona for a prolonged period of time can have negative impact on the personality of large number of young people and when the person starts enjoying the benefits of his other self it can even lead to a Multiple Personality Disorder. Workers enjoyed the experience of being another person and making calls as they felt that when there are call failures and abusive calls, it is their professional identity that is being traumatized while their personal identity still remains intact. A call center worker said, "If we get screamed at, and we get a lot of that, they're screaming at Sally and not Sulochana"¹⁷.

A rising number of Indian call centre and software workers are complaining of stress, panic attacks, depression, relationship troubles, alcoholism and eating disorders. To quote from the study done by Kalyani Menon of female workers in Indian call centers: "Call Centre Girls" have no social life—indeed, they are hardly able to exchange more than a few words with their families, far less spend time with friends on working days. On days off, most of them do not even read the newspaper or watch anything more than mindless programmes on TV. Many of them show symptoms of bipolar disorder with going to work each day as the "high"—when they are at home, they are listless, bad-tempered and depressed"¹⁸.

Even while stress and burnout are severely debilitating the workers in the sector, they are forced to live with it. Most often, workers do not relate their problems outside the family as it would be considered a sign of weakness in personality. But more importantly, it could even put their employment in jeopardy. Often firms too treat these problems as the worker's individual problem, though of late some upmarket ITES firms, such as EXL Services are providing psychiatric medical support to the workers in the firm itself.

Racial and Cultural Abuse

Even when the call center employees are working for wealth creation in developed countries they are being constantly attacked with racial and cultural abuse from these countries. The very outsourcing that inspires a large youth population of a country to adopt the western culture and lifestyle is beginning to render them culturally rootless. They are being labeled as 'terrorists', 'racially inferior', etc., ultimately deeply affecting them psychologically and culturally. Due to the employment losses, outsourcing has generated a lot of resentment in the countries receiving outsourcing. "Kinder, kein Inder!", a slogan popular with German agitators roughly translated means, "The solution to labour shortages is more children, not more Indians"¹⁹. This has resulted in call center workers in India increasingly becoming victim to hate calls by overseas customers that include rudeness, racial and cultural abuse and sexual harassment. But employment loss is not the only cause for resentment. Some callers see this as an opportunity to air out their venom against terrorist attacks in their countries. Reports tell that the number of abusive calls to Indian call centers reached an all time high after the terror attacks in the US and UK. A call centre executive related a harrowing experience, "This lady kept insisting that we Indians were the terrorists who were spoiling their country's peace. I had to bite my tongue, in order to not blast her right back"²⁰.

But most often, the abusive calls had pure racist overtones. In many cases once the client identified the Indian voice on the phone from their accent they would spew vitriolic comments. A Delhi based call centre executive was quoted saying, "People would say 'You're a Paki, I don't want to talk to you, pass me on to someone who can speak my language'"²¹. Another call center executive was at the receiving end when the client said, "Back off, Paki, and don't call me again"²².

Web sites have sprung up in the US specifically to cater to phone abusers with phone numbers of Indian call centers and Hindi swear words. These stress factors generated by clients' rude and abusive behavior are triggering call center employees to quit their jobs and is affecting their normal social behaviors. Many firms are faced with the unfortunate prospect of high attrition rates due to the psycho-social costs to the employee. To cut down turn over rates, many firms have started counseling classes for their employees to deal with irate callers.

Social Divisions

Perhaps the most important negative impact that call centers have generated is the wide-ranging social division within family and outside. First, call centers are contributing to creating a category of middle-class youth who are slowly being culturally alienated from the rest of the crowd in the urban area. The new working habits and patterns of lifestyles, like working in the night, smoking, drinking, and pub culture, are in complete contrast to the ways of living together, value systems, traditions and beliefs still nurtured by the urban middle-class. These young people have little time to spare for their family members, relatives or friends due to a long duration of work estimated to be somewhere between ten and twelve-hours per day. The fear of someone always waiting to take his or her job makes it necessary to work hard. As they earn more than their parents ever did, finance is not a problem for them as they adopt the lifestyle that they pretend to represent in the call centers. These issues are creating family and social tensions in the urban area.

Alarmingly, the well-paying job in the call center is widening the social and economic divisions between a booming middle class and an impoverished class of urban poor. India is definitely 'shining' for Indian middle-class young men and women who have all the things that their parents could not have dreamt of buying in their lifetime – cars, televisions, computers, cell phones, western clothes, etc. A growing number of shopping malls, coffee shops and nightclubs for the new richer Indian urban middleclass are fast changing the Indian urban landscape. On the other hand, the ever-growing urban poor, surviving in slums, are being continuously pushed into darkness by slum demolition drives, neglected in sanitation, power, and water. The resources of these neglected areas are being diverted to transform Bangalore, Delhi, Mumbai, Hyderabad, Chennai, and other Indian mega-cities into the new global centers of back-office work. In 2002 more than 80 percent of the BPO's were located within these mega-cities and concentration has only been increasing (Table 3). The millions of India's urban poor and those living in rural India, who do not have access to basic education and minimum social infrastructure, are the ones who are paying for the costs of developing this world class infrastructure, thus widening the class and regional disparity in living standards.

Sustainability of Call Centers and Potential Social Effects

Although the sustainability of the ongoing BPO boom appears to be positive for India, the future of call centers that are at the lower end- BPO value chain is going to be tough. As India is rapidly moving up the value chain, the share of call centers has been reduced to just about 15 percent of the Indian BPO industry in 2005. High-end outsourcing such as legal case research, medical research testing and financial analysis now constitutes as much as 85 percent of all BPO work done in India²³. As the call centers transform themselves into lowskilled jobs, determined by cost effectiveness, the international competition for outsourcing will be intense in the long run, with countries like the Philippines, China, and Malaysia competing with India.

As soon as India starts losing its competitive advantage in call center work due to competing countries overcoming the language barriers, it will affect millions of young people who have taken up call center work as their careers. Most of these call center employees, who have given up other career options at a young age to earn hefty salaries, will be the first to thrown out of employment. They neither possess the necessary skills to be employed in the high-end BPO sector nor the skills to get other professional work. Working in call centers for five years or so, just answering or making a phone call, makes these young people unskilled for employment in any other sector. They will be the worst affected category in the labour markets. In such a scenario, the social benefits of short-run employment opportunities made available by call centers are likely to have a very high social cost in the long-run, creating high unemployment in certain sectors and other related social problems.

Conclusion

In conclusion, the above arguments show outsourcing's effect on output and efficiency in "outsourcing receiving countries" and its effect on culture and society in "outsourcing provider countries". The stake is equally high for people from both outsourcing receiving and provider countries. It maximizes productivity in developed countries at the cost of employment. Although it creates employment in developing countries, it also has serious social and cultural repercussions. Indians may be content with their new global position as the outsourcing capital the world. However, their employment opportunities and satisfaction may be more transitory than long lasting. This is especially true in the case of call centers, where global competition is becoming intense. In this context, the phenomenon of outsourcing needs to be understood with a holistic perspective.

The positive aspects of outsourcing, like wealth creation, empowering women, and bridging the cultural gap, can be strengthened through suitable public policies. The people in outsourcing receiving countries should not always see outsourcing as ‘stolen jobs'. They should realize that it is in their own interest. The outsourcing-led rising US economy clearly may create more employment opportunities for them. Without outsourcing the US companies will loose their global market share, which in turn may restrict employment-generating capacity of the economy. Their appreciation of the role of call centre employees in developing countries can go a long way in bridging the west-east gap in culture and civilizations. The urban youth population in outsourcing providing countries like India should also realize that call centers may not be a longterm career option. They have to exercise caution in the way of life that they choose. Otherwise, the social and cultural cost of call centers is likely to outweigh the transitory benefits brought by it.

The website Aljazeera.com revealed this cost of outsourcing dexterously as follows: "The call centers create new forms of social division, separating these reconstructed young adults from the rest of society. The easy mixing doesn't extend to the lower castes, the poor, or the majority who speaks only Kannada²⁴ and have no knowledge of English. It reinforces social gulfs, alienating people from their traditions, without offering them any place in the values they have to simulate in order to ease the lives of distant consumers they will never meet.

India, according to the prophets of globalism, is to become the back office of the world. The economic benefits are only too clear, but these entail social costs. The loss of jobs to rich countries is small compared to the cultural hybridization of hundreds of thousands of young Indians"²⁵. It is difficult to apprehend how far Indian society, one that has historically assimilated different cultures of the world, will be affected by the new wave of cultural and value systems unleashed by the process of outsourcing. However, the widening gap between different segments of society, segregated by income, region, gender, and class, is definitely a matter of concern.

BIBLIOGRAPHY

ENDNOTES

1 These figures are provided by Dr. Margaret Levi, president of American Political Science Association and a professor at the University of Washington, as quoted in Financial Express "Rise & rise of outsourcing", May 6, 2005.

2 "India Controls 44 Percent of Outsourcing", Associated Press, June 2, 2005.

3 Bipin Chandran, "IT outsourcing to India saves 60% costs", Business Standard, March 11, 2003.

4 "The Indian BPO juggernaut rolls on", Business Standard, October 4, 2003.

5 Tyler Cowen has expressed this view in a debate with John Irons on the issue of outsourcing in The Wall Street Journal (2004) "The Rise of Outsourcing", November 9, 2004.

6 "Headcount crisis at call centres", Times of India, July 17, 2005.

7 http://www.aseanindia.net/asean/synergy/indus-telecom1.htm.

8 World Telecommunication Development Report 2002, ITU.

9 Ministry of Human Resource Development (2000) IT Manpower Challenges and Response, Interim Report of the Task Force on HRD in IT, Government of India, New Delhi.

10 "Budding SA, India Call-Centre Alliance ", Business Day, August 04, 2005.

11 Mattingly, D. J. "Indian Call Centers: The Outsourcing of "Good Jobs" for Women", Centre for Global Justice, 2005 Conference Papers.

12 Remesh, B. P. "Labour in Business Process Outsourcing: A Case Study of Call Centre Agents", NLI Research Studies Series No.51, V.V., 2004. Giri National Labour Institute, Noida.; Singh, P. and A Pandey "Women in Call Centers", Economic and Political Weekly, Vol.40, No.7, 2005, pp. 684- 688.; Mattingly, D. J. "Indian Call Centers: The Outsourcing of "Good Jobs" for Women', Centre for Global Justice, 2005 Conference Papers.

13 ILO World Employment Report, 2001; ILO, Geneva.; Remesh, B. P. "Labour in Business Process Outsourcing: A Case Study of Call Centre Agents", NLI Research Studies Series No.51, V.V., 2004, Giri National Labour Institute, Noida.

14 ILO World Employment Report, 2001; ILO, Geneva.

15 "Indian call centers recruit UK staff", Financial Times, July 5, 2005; "Indian call centers to swell with foreigners soon", Hindustan Times, June 6, 2005; "India shines for job seeking foreigners, too", Financial Express, February 1, 2004.

16 Times of India. "Let me be Sally", July 14, 2005; Business Standard (2005) ‘Stress hits India 's outsourced and overworked', July 11; BBC News (2003) ‘Indians learn to be Brad and Britney', April 14.

17 "Let me be Sally", Times of India, July 14, 2005.

18 Gaerlan, K., "IT in India: Social Revolution or Approaching Implosion?", 2003.

19 "Indian BPO flies high despite backlash", Express Computer, June 23, 2003.

20 "Dial 7 for terror", Times of India, July 14, 2005.

21 "Indian Call Staff Quit Over Abuse on the Line", The Guardian, May 29, 2005.

22 ibid.

23 "Headcount crisis at call centres", Times of India, July 17, 2005.

24 It can be synonymously used for other vernacular languages.

25 Aljazeera.com. 'Indian Call Centres - The next coffee industry?', January 1, 2004.