I suppose outsourcing by airlines started, in earnest, with the "off-shoring" of call center work, a practice that is quite common with many American customer service companies. Phone calls traditionally handled by airline employees at domestic call centers were efficiently transferred to call centers in third-world countries where English is commonly spoken and the labor to handle those calls is available for pennies on the dollar when compared to American labor costs. Customers complained, but took advantage of the savings realized in the moderated pricing that resulted. In fact, I'm wondering if the "WalMartization", as it's commonly known, of America has driven the process of outsourcing. Consumers want what they want and are accustomed to receiving it at the price they want to pay. Businesses feel the pressure to compete with similar businesses and in "the rush to the bottom", outsourcing is the predictable result.
Just last year, my airline-employer, in an effort to keep costs in line with a huge competitor, announced that approximately 600 customer service jobs at smaller airport stations primarily served by small regional aircraft would be outsourced. Jobs traditionally performed by union-represented, well-trained, skilled, seasoned colleagues were put out to the lowest bidder. Contractors providing "lowest common denominator" labor fought for the contract. The jobs were filled by an unskilled labor force that would normally be found in the very lowest paying jobs in any community: minimum wages, no benefits. The company achieves the desired cost of labor, the contractor scores a windfall from the contract, the consumer enjoys moderated pricing for our product. But that product suffers as a result.
I've seen the result firsthand at a small regional airport on the gulf coast. When I first started frequenting the airport, all labor was provided by my airline colleagues. The experience was consistent with what one would receive at any other station staffed by my airline-employed co-workers; consistent with even the largest stations. Since the change to outsourced labor, the changes are more than noticeable. There's no "ownership" of the customer experience. Uniforms are not those of my employer but are those of the contractor. Customer interactions are curt, often bordering on rude with a distinct air of "I don't care". Product knowledge and skill levels have likely suffered most. During a creeping delay last summer, I sat across the hall from the gate podium and watched the poor contract agent make an earnest attempt to inform and help anxious customers. Unfortunately, his lack of skills and lack of knowledge about the most basic questions ("I'll miss my connection in XXX, what should I do?") yielded a lamentable result. The agent absorbed and magnified the customers' frustration and eventually snapped. The resulting Gate lobby announcement, made over a loud speaker that could be heard throughout the airport, was hostile, embarrassing, unprofessional and demonstrated the announcer's discomfort with the most basic use of the English language. His actions worsened a spiraling situation.
Eventually, the aircraft in question was boarded and departed. As a standby, I received a seat assignment from the frustrated agent. I felt and feel earnestly sorry for him. He was set up to fail. Of course, I had the insight of knowledge that the other passengers did not: this young man was not an employee of the airline. Those customers on that late aircraft, at least those within earshot, spent the next hour and a half discussing what had happened. I remained quiet and tried to make myself small. But I feel the embarrassment for what transpired now, as I write, as acutely as I did at the time.
What do situations like the one I just described cost my airline and our outsourcing competitors? Unless it can be quantified, most managers don't seem to care. There has to be a dollar cost associated with it. Otherwise, the only cost considered is the savings they've realized to offer the "same service" to our customer. Only that service isn't the same.
So let's think about it: what really drives outsourcing?
My airline is looking to remain competitive with other airlines who already rely on the cost-savings of outsourcing. The consumer demands competitively priced product. But what about the tangible difference in the quality of the product they receive? Our culture of apathy simply doesn't seem to care; not enough to shop elsewhere anyway. WalMart doesn't seem to suffer by providing a marginal (at best) customer experience. Or do they?
Who's the ultimate loser? The skilled, tenured, locally-established airline employee for whom the offer of "an available opening elsewhere in the system" is not a viable option? The locally hired, unskilled, poorly educated contract employee I doesn't even earn livable wage and receives no benefits? The customer whose experience with our product has spiraled as a result of the process? My employer whose reputation for customer service is spiraling as a result? The remaining "insourced" employees who detect a not-so-subtle, anxiety-provoking shift in the traditional employer/employee relationship ("Am I to be next?")? All of the above?
Perhaps the better question is, "who is the ultimate winner?"
#Insourcing
Because institutions, such as big business, have an ethical and moral obligation to the communities who support them (whether or not the community demands it).
