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Outsourcing the Future - All day, all night, the phone calls come in

As dusk falls, a fleet of 110 utility vehicles cruises through this traffic-congested Indian city, transporting an army of young English-speaking workers from their doorsteps to jobs at 24/7 Customer, a call center financed by American investors from California's Silicon Valley.

The white utility trucks, sporting 24/7 logos, drop their passengers at a complex of four floodlit office towers with the inspirational names of Creator, Explorer, Discoverer and Innovator.

The buildings - complete with their own generators to keep computers humming during sporadic power blackouts - hold 12,000 employees of India's emerging service economy. Work has started on a fifth building, Inventor, scheduled to open late this year.

At the Creator building, hundreds of 24/7 workers file through security checkpoints onto a huge floor of brightly lit cubicles decorated in teal and other pastels. They will spend the night on the telephone behind computer screens, hawking credit cards, providing technical support for computer companies and helping American and European consumers plan their vacations, track package deliveries and sort out ATM card problems.

The other buildings in the International Tech Park Bangalore absorb thousands of additional service workers employed by AOL Member Services, Deutsche Networks Services, General Motors India, IBM Global Services, Infineon Technologies, Tata Consultancy Services and nearly 100 other international companies that are tenants of the complex.

For most Americans, the young employees who work in these buildings are the personal embodiment of outsourcing -- the Indians they are most likely to encounter. And for better or worse, people's experiences during these calls will determine much of their attitude about whether outsourcing is good or bad for America.

At 24/7, the workers are predominantly college graduates, yet earn a starting wage of just 10,000 rupees a month, or less than $60 a week.

In the U.S., where call centers are regarded as jobs for college students, single mothers and downsized workers, the medium salary and bonus last year was $13.05 an hour, according to Mercer Human Resources Consulting. That's $520 for a 40-hour week -- nine times the Indian pay.

The tremors from this wage difference are being felt 8,300 miles away in southwestern Pennsylvania, where development officials once chased call centers as a growth industry because of the region's relatively neutral accents and available labor pool.

These days, Indian companies like Tata are knocking on doors looking for call-center business in Pittsburgh, raising competitive worries, said Alex Demczak, a call center manager and vice president of Citizens Bank of Pennsylvania who has written books on the automation of the industry.

'Who will we sell to?'

"There's a lot of concern. We've already experienced the [decline of the] steel industry, the Rust Belt. Unless something is done we're going to see the same situation here with the service industry and the telecom industry. We will be exporting those jobs," he said. "It sort of makes you wonder who we're going to sell to."

At stake are more than just telephone customer-service jobs. For every 100 people who work on the telephone, Demczak said, there are 10 to 15 people who work as managers, line supervisors, computer technicians, and quality assurance inspectors.

Under pressure because of do-not-call legislation and lower-cost foreign competition, almost all U.S. telemarketing companies are expanding offshore themselves, sometimes hedging bets by going to multiple countries, said Barry Reese, a founding partner of Reese Teleservices, a Pittsburgh-based call center operator.

Reese, which closed a call center in Indiana, Pa., in 2002 and reduced its headquarters staff in Pittsburgh that year, has a joint venture in Mumbai, India, (Bombay) to serve customers who demand the lower costs India allows.

"From our point of view, we would look at India as almost an insurance,'' Reese said. "You want to make sure you're not left behind. You have to stay competitive. If you don't stay competitive, you're out of luck."

Telemarketing employment in the six-county Pittsburgh region has declined. After hitting a peak of 5,629 workers in December 2001, it had shrunk to 4,342 by last June, according to the latest state data.

Not everyone is cutting back. EchoStar Communications Corp., which runs the DISH satellite TV network, continues to hire customer service agents for the 1,000-employee call center it opened six years ago in a former McKeesport steel mill. Starting pay is $9 an hour, $1 above what it was when the facility opened in 1998.

Still, there is no doubt that call centers in cheaper, English-speaking nations are exploding.

In five years, the call center industry in India has grown from next to nothing to a multibillion dollar business that employs about 200,000 people in more than 1,200 centers. The industry expects to expand by about 50 percent this year, from 96,000 seats to 158,000 seats, according to a survey by Callcentres.net. Each seat can support two shifts.

In a way, locating call centers offshore is simply the latest version of the industry's penchant for lower costs. Call centers in the United States already had moved from high-cost cities to lower-cost small towns and then to rural locations in the Midwest where accents were neutral, education was adequate and expenses lower.

The vibrant night shift

As its name implies, some groups among 24/7's 2,500 employees in Bangalore work around the clock to serve customers all over the world, but the place really comes alive at night, when it's daylight in the United States. The busiest shift starts at 6:30 p.m., when it's 8 a.m. in the eastern United States, and ends at 3:30 a.m. when the 5 o'clock whistle blows in America.

Once they get on the telephone, the employees, most between 20 and 25 years old, typically drop their Indian names and use others that are less jarring to their American clients. Jaganath, for example, becomes Jack; Manikandan, a typical South Indian name, becomes Manny; Sangeetha turns into Sandra.

Managers say they don't encourage employees to pretend to be someone they are not, but suggest they shorten typically-complicated Indian names that may confuse Western clients.

Then there is the touchy matter of accents.

There are 26 official languages recognized by the government of India, which causes a lot of variation in the way English is spoken -- a phenomenon called "mother tongue influence."

To suppress those pronunciations, recruits take several weeks of "accent neutralization" classes where they learn to soften their "Ts" and "Rs" and otherwise pronounce words in ways more familiar to their overseas clients.

Employees are trained in the nuances of dealing with the speech and cultural habits of American and British consumers. "The British expect a lot more sirs and ma'ams,'' said Rajiv Ragnave, one of the first employees hired by 24/7 when it opened in 2000. "It's not the same when talking with Americans."

Because of a backlash from American, British and Australian clients, however, most Indian call centers no longer ask employees to try to imitate Western accents. Fake Southern drawls with an Indian tinge are out.

Instead, the centers emphasize that employees should speak clearly -- and in particular, slow down their rapid-fire English, which can often tumble along 50 to 60 words a minute faster than the American pace.

Recruits also take lessons on everything from American sports and geography to holidays like Valentine's Day.

Learning to say 'no'

Another goal: teaching Indian employees to say "no" when they have to. The average Indian typically apologizes and gives an indirect answer when presented with a problem, which can create difficulties when an American client demands a yes-or-no answer to a question, said V. Bharathwaj, 24/7's marketing director.

"We're less assertive by nature, more service-oriented. That's a typical cultural difference that we have," he said. "Bridging that is an important challenge."

Because most of the employees are young and newly out of college, 24/7 promotes a loose but professional atmosphere, something like what you'd expect on a college campus. Men wear open-collared shirts. The many women workers wear either traditional loose-fitting Indian dresses or American-style jeans. Party tinsel is draped over some of the cubicle walls.

"These are kids ... and it's probably the first job they have ever had. We try to make sure it's the same kind of tempo" as in college, Ragnave said.

Even though its operations are in Bangalore, 24/7 is a U.S. firm based in California's Silicon Valley, where it attracted $22 million last year in new investment from Sequoia Capital, a founding investor in dozens of companies, including Cisco Systems and Apple Computer.

Visitors to 24/7 are required to sign non-disclosure forms prohibiting any reference to the firm's international clients, which are all recognizable names in the banking, package delivery and travel industries. Ragnave, who conducted a tour, also wouldn't let a reporter get close enough to hear employees work or to talk with them.

Outside the office, the center employees expressed self confidence and pride in their jobs and the fact that they are able to do better financially than their parents did at the same age. They feel there's an element of glamour, too, in dealing with customers in another country.

Many still live with their families, although apartment sharing is becoming popular. They earn enough to qualify for credit cards and often spend their weekends with friends shopping, going to the movies and visiting nightspots.

High turnover

NFO India, a market research firm, found that Indian call center workers like their pay and freedom, but many don't have a long-term interest in call centers. The night work -- a new phenomenon in India for women -- doesn't thrill them, and many would like better jobs.

That helps explain why turnover in most Indian call centers is high -- estimated at 45 to 50 percent a year, although 24/7 claims its turnover is among the industry's lowest at 20 percent.

Because of the millions of Indians looking for work, though, this high amount of churn never leaves call centers short.

24/7 receives inquiries from about 700 job candidates each day, some of whom can be seen lining up at the office entrance as the night shift starts. Of those, only about 6 percent land jobs.

The company tries to reduce turnover by offering various amenities. Lunch and breakfast are on the house. A doctor and dietitian are on staff to help with the biological challenges of working overnight. A psychologist is on call as well.

Assignments are rotated to undercut boredom. Workers have access to a gym and are given breaks throughout the day. The company throws parties with a rock band to celebrate American holidays such as Halloween and Thanksgiving.

And some companies in India are dealing with the high turnover by doing what their counterparts in the United States did -- they are moving from large metropolitan areas like Bangalore to smaller Indian cities where education, competition and wage pressures are not as great.