Attention All Passengers (13 page)

For WNS, it all started back in 1996, with British Airways as the first airline customer. Since then the company has grown to more than 21,000 employees, with twenty-three centers throughout the world and annual net revenues of $616 million. But even the corporate fact sheet doesn't list client names, just descriptions such as “major North American airline” and “North American travel agency.”

India is a sweet spot for call center outsourcing, and the experts cite the combination of technological infrastructure and an endless employment base of educated and English-speaking recruits (WNS cattily notes the “language problem” in Malaysia, Singapore, and Thailand). But it's a hush-hush business, routing customers' calls to the far side of the world, and Vyas deferred on most of my key questions. What do your workers earn on average? Sorry, our clients wouldn't want us speaking about that. Well, who are all your travel clients? Sorry. Can I sit in while the travel team fields some calls? Sorry.

What he did say is this: “We want to remove this myth that this is not a primary career. There is substantial growth. We promise growth based on personal performance. We are an HR-oriented organization.” In fact, Vyas did explode a few myths for me: WNS is not composed of an army of part-time workers; in fact,
all
employees are full-timers, though most are between seventeen and thirty-five. They work nine-hour shifts. And everyone handling travel calls—at locations throughout India as well as in the Philippines—receives full health benefits.

So if the staff is full-time and there are no slave labor conditions, how the hell can WNS boast on its site that it helped Travelocity reduce its operational costs by 40 percent year on year? “There is a cost advantage for sure,” Vyas said in obvious understatement. So it begs the question, why have all those airline employees in Georgia and Oklahoma and Texas and Connecticut been fired and their jobs shipped to Mumbai, if WNS and other outsourced companies are such cool places to work? Where do those labor savings come from exactly?

The answer, naturally, is in the wages. Just a few weeks before I arrived in India, the PricewaterhouseCoopers branch in that country published “Measuring Human Capital—Driving Business Results,” an extensive survey of thirty-seven Indian firms across various business sectors. The findings were not surprising: the “information technology and information technology enabled services” (IT/ITeS) sector recruits the most new employees each year. Yet IT/ITeS also has the lowest function cost per employee rates, as well as the highest termination and resignation rates. In other words, they get 'em in and then they get 'em out.

As for salary, the report notes Indian companies pay an average annual wage of about $10,733 in U.S. dollars, and earn a profit of about $13,417 per employee. But it's important to remember that this wage average is driven up by other sectors such as banking, engineering, and pharmaceuticals, while call center employees make much less. However, even if the average of $10,733 is used as a benchmark for a forty-five-hour week and a fifty-week year, it translates into about $4.79 an hour. Again—call center employees earn considerably less. Little wonder that U.S. airlines have embraced the subcontinent.

WNS travel clients include United Airlines and Travelocity, and there's no doubt how important this sector is to the company. “Travel is quite substantial,” said Vyas. “It's our biggest vertical.” He dismissed the “reverse outsourcing” trend highlighted by some U.S. companies that recently brought call center work back to America, and insisted the corporate clients are happy. But even if more airlines continue to do away with human interfaces and shift additional customer service to email models, Vyas said WNS will be ready: “So we have a solution for that, too. We provide all kinds of solutions.”

The next day I was in Delhi, and this time I visited an even larger travel outsourcing office, belonging to the Bird Group, which also handles calls for Travelocity, as well as American Airlines. The firm's roots date all the way back to 1971, when it began fielding reservations as general sales agents for Lufthansa. “The 1970s is when GSAs started taking shape,” explains Ritu Bararia, the head of corporate communications.

Its site claims “Bird Group has created a niche in the market for specialized solutions for airlines, corporates, and travel agencies.” The company maintains a workforce of more than 2,900 employees at forty locations throughout India, and generates more than $100 million in annual revenues.

Bararia noted that despite being “primarily a business-to-business company,” Bird has expanded its own “verticals” even further than the standard outsourcing models, beyond call centers and IT to include airport ground handling, charter flight operations, and the hospitality industry. The firm owns a travel technology giant and operates its own training academy, which no doubt cuts down on U.S. executives flying in to instruct the staff. Bararia summed it up: “We're really big in the travel industry.”

She and I discussed the changes we've seen in travel, and I asked her to explain why airline executives are smitten with outsourcing. “They look at us and they say, why not explore these options?” Bararia said. “Perhaps some of these options will work for us.” And she sympathizes with her corporate clients: “Running an airline is a tough job.”

But for many airline execs, companies such as Bird Group clearly make it less tough. Here, too, I was told that nearly all the employees are full-timers who receive health benefits, not transients who dabble at answering calls for a year or two before moving on to something else, as the PricewaterhouseCoopers report indicates. In fact, Bararia said, “We have a very steady workforce.” And when I asked if U.S. travel companies are happy with their performance, she responded, “I am sure.”

Outside the gate of one of these facilities, I tried to engage workers in conversation. Nearly all were friendly, though most demurred. But a young woman whom I will call Ms. Patel—simply because it's such a common surname in India—smiled when I explained why I was visiting. So, does she enjoy speaking to American travelers? Her smile grew: “Most are very nice. Only some are not as nice.” What about her work conditions? She stopped smiling and moved her head in the direction of the ever-present clusters of young men who crowd the streets throughout India, often squatting, and apparently without much purpose. “I have a good job,” she said, and then politely let me know she had to get back to work.

The simple fact is that I quickly came to like the people I met at the Mumbai and Delhi call centers. At one facility I was offered traditional Indian sweets because a staffer had just announced an engagement, and the receptionist at Bird Group who called for my taxi reminded me of Pam Beesly on
The Office
. The cubicles were outfitted with the same blond furniture from Ikea, the same Dell laptops, the same admins dressed in jeans with the same belt-clipped cell phones. The public relations people fielded the same calls about photo shoots and press releases. I noticed one desk held a coffee cup inscribed:
TELL ME AGAIN HOW LUCKY I AM TO WORK HERE . . . I KEEP FORGETTING
!

In other words, these are not aliens. Most Americans would like the workers I encountered. I met nice people, and they were clearly very proud of their nation's quick emergence into a technological giant. I came to believe that if some Americans are angry about U.S. jobs being shipped overseas, that anger should be directed toward the American executives who made those decisions, not at Ms. Patel or her coworkers.

The Cultural Divide That Dare Not Speak Its Name

While aircraft maintenance outsourcing is quite opaque to airline passengers, the outsourcing of call centers is something they encounter in a very transparent way. So there's another factor at play when our calls are routed to Southeast Asia, and it's an issue many Americans discuss only in whispers. A few years ago I tackled it head-on for USAToday.com: “When Customer Service Is Lost in Translation” dealt with the problems of hashing out travel snafus with reservations agents overseas. Talk about hitting a nerve; the responses were so overwhelming, and so filled with anecdotal evidence of a cultural divide, that I wound up writing a follow-up column as well.

The executives I spoke with in India didn't want to discuss it, but there's no getting around the cultural issues when a caller in Nebraska is routed to a customer service rep in Mumbai. That's not snobbery and it's certainly not racism; it's a simple realization that not all knowledge gaps can be bridged by a decision tree memo from an airline's marketing department. I found this out a few years ago when I called Delta and booked what turned out to be an invalid and expired fare offered by a rep in India who was monomaniacally obsessed with booking me a rental car I didn't need.

Often, the call centers make the problems much worse. With airlines increasingly closing their own call centers, many customers now need to rely on email communication, which poses several problems. Linda Burbank says, “A lot of people don't like email, especially older people. They're really frustrated because they don't hear back and have to wait many weeks.” And a prompt response is a big part of complaint resolution. What's more, angry customers often cite the sensitive issue of deciphering the advice of foreign call center reps with heavy accents.

However, even U.S. airline executives have been forced to publicly acknowledge the obvious: many outsourced call centers simply haven't been up to the task. In January 2011, US Airways closed its call center in Manila, while Delta transferred work from an outside facility in Jamaica to its own offices in Atlanta and Minneapolis. One month later, United confirmed it was repatriating 165 such jobs from India to Chicago and Honolulu. Bloomberg quoted United spokeswoman Robin Urbanski as saying, “More sophisticated conversations with our guests are much better suited for us to handle instead of a third-party partner. We clearly have the deep industry expertise to help our guests navigate through their options.”

No doubt many airline customers would agree. However, addressing the inherent and high-profile problems associated with call center outsourcing should not be viewed as a portent of a new attitude toward labor issues. U.S. airline executives have been more than happy to continue outsourcing many other functions. Clearly this trend has exacted a tremendous cost on America—economically and socially. But it may represent an even greater threat to the nation. In 2004 the National Intelligence Council warned of a “pervasive insecurity” because globalization will remake the planet, particularly the middle classes of the developed world.
1
For once the U.S. airline industry is cutting-edge. Because those prognostications have already come true for thousands of former airline employees.

When I reminded Secretary LaHood about President Obama's promise to stem the tide of foreign outsourcing, he responded, “This administration will do all that we can to maintain American jobs. Whether it's in the car industry or the airline industry or whatever form of transportation it is. We've encouraged people to come here and build high-speed trains. We've encouraged foreign countries to buy Boeing airplanes. Wherever we can encourage people to buy American and employ American workers, we do it.”

No More Friendly Skies

For airline employees, the fun has long gone out of the business. Fun is harder to quantify than 401(k) annuities and dental coverage, but it's a very real factor nonetheless. While reviewing interview notes, it suddenly struck me how frequently veteran airline employees raise this issue on their own: working for an airline is just not fun anymore. “The harder we work, the more they say they don't need us,” says Eadie Francis, a long-time employee of a major carrier.

And it's no coincidence the fun has gone out of the airline business for passengers as well. The airline service crisis is a direct reflection of the industry's labor crisis. Not all outsourcing takes place in India, China, or Mexico; every day passengers in U.S. airports interact with outsourced airline employees.

Outsourcing has become ubiquitous in the industry's bag rooms, since few carriers retain their own employees for such functions, and baggage handling is a lower priority even among outside service companies, what one expert calls “the hole no one wants to be in.” Outsourcing only exacerbates the complacency, particularly if airline baggage handlers making $15 an hour are replaced with outsiders making $7 an hour. Therefore it's particularly telling that according to industry experts at SITA, 51 percent of all undelivered luggage is due to “transfer baggage mishandling,” a service that is almost entirely outsourced at most major airports.

Other “employees” are right in passengers' faces. Etiquette expert Peggy Post, the former Pan Am flight attendant, cites another drawback of outsourcing: “For passengers, there is a problem—not with the people, but with their lack of training. They don't have that pride in the company.” Unfortunately, this often manifests itself at the worst times, such as during widespread flight delays or cancellations, when it appears that no one wearing the airline's uniform is overseeing the crisis du jour.

What has become quite clear is that U.S. corporations, with the full and bipartisan blessings of Congress, the White House, and the Supreme Court, will continue to make decisions that are sensible to shareholders, not passengers, employees, or America itself. Glenn Tilton describes United's decision to delegate heavy maintenance on its Boeing 777s to Ameco in Beijing as “strategically very, very important.” He also assails labor's efforts to prevent Boeing from shifting work on the 787 Dreamliner from a unionized factory in Washington state to a nonunion shop in South Carolina: “You cannot protect the status quo by litigating against change.”

Where Did All the Jobs Go?