Europe's Wired Collar Workers

Call centers are proliferating, creating jobs and helping companies compete

Near the port of Antwerp in Belgium, a drab 13-story building rises above weedy lots stacked with cargo containers. Dingy shipping offices occupy most of the sprawling structure. But take the elevator to the eighth floor, and you see a different scene. Here, about 125 workers for Electronic Data Systems Corp. sit in front of computers at brightly lit workstations, chattering into headsets.

French, Dutch, German, and English fill the air. On one side, an operator is helping a caller from France's aluminum giant Pechiney straighten out a software bug. Across the room, another agent is telling a salesman at Eural, a Belgian financial-services firm, how to enter a new customer's account into his computer. On an average day, these operators will deal with some 600 problems phoned in from as many as 18 different European countries.

Welcome to one of Europe's fastest-growing and most important new businesses. From Belfast to Naples, workers are donning headsets and staffing service centers set up to deal with sales and problems for clients ranging from banks to carmakers to software houses. These new service outfits go by a variety of names; the most common are customer contact centers or, simply, call centers. Many also operate through fax or the Internet.

Although call centers first appeared in the U.S. more than a decade ago, they have only recently mushroomed in Europe. Close to a million Europeans now work at approximately 12,000 call centers across the Continent. And the numbers are growing. From 1995 to 1997, call centers accounted for an estimated 410,000 new jobs--equivalent to roughly 37% of the jobs Europe created in that time. By 2000, the number of employees in call centers will approach 1.3 million, according to forecasts by London-based consultants Datamonitor. That's close to 1% of Europe's total working population.

FIREPOWER. The sudden surge in service centers reflects key developments in Europe's economy. As deregulation rolls back old monopolies and spurs competition in telecom, banking, transportation, and other industries, companies are hustling to gain an edge on their rivals by providing better service at lower cost. Perhaps more than ever, European corporations are paying attention to satisfying--and holding on to--their existing customers. Says Clive Goodhall, a management consultant at Deloitte & Touche Consulting Group in London: "It costs several times as much to acquire a new customer as to sell something to an existing one." But rather than adding staff at stores and banks to meet this rising demand, many European corporations and banks are setting up call centers.

Indeed, call centers are part of the hollowing out of Europe Inc. They help companies add firepower at relatively low cost, while they trim other parts of their payroll. The boom in service centers highlights a significant change in European work patterns as well. No longer are factories the big sources of new employment. Instead, jobs are springing up in converted warehouses in the suburbs, in renovated docklands, or in industrial parks used for call centers and other customer service operations. Most of the employees are women, and the jobs are often temporary, low-paying, and highly regimented.

That bothers trade unions, which fear that Europe's giant service centers could be the sweatshops of the new millennium. "What we are seeing is the industrialization of office work," worries Stephanie Golden, a national officer at Unison, a British white-collar employees union. "Call centers work the way old factories used to, except they use modern technology."

At the same time, though, service jobs have been godsends to old industrial cities such as Leeds--a British textile center that suffered massive job losses in the 1980s. It's now a thriving hub of the fast-growing direct banking and insurance industries. Moreover, as Europe's new service ethic gathers pace on the Continent, customer service centers are springing up in former industrial hubs around Madrid, Marseille, and Dresden in eastern Germany.

Some of Europe's most aggressive and innovative companies are using these service centers to fight their way into crowded markets. Take Abbey National, a medium-size British bank. It has made a big investment in selling mortgages, unsecured loans, and other financial products over the phone. Through its network of 21 sites in Britain--plus new operations in France and Italy--it tries to grab business from larger rivals such as Barclays Bank PLC or National Westminster Bank.

Selling products this way can be a lot cheaper than pushing them through the branch network. Abbey CEO Ian Harley says the company saves $40 by selling an unsecured loan over the phone rather than through a branch. The call centers have also helped slash mortgage processing costs by 25% in the past two years.

TRAINING GROUND. Software maker Oracle Corp. also uses a sophisticated call center to handle sales. The Dublin facility employs 350, most with business school or engineering degrees. They cover companies in Europe, the Middle East, and Africa, selling software packages costing $40,000 or less to a total of 30 countries. That frees up Oracle's field sales force to concentrate on more complex deals of higher value, says Managing Director Eric Duffaut. The Dublin center also serves as a training ground for salespeople aiming at tougher jobs in the field.

At General Motors Corp.'s Opel unit, call centers help the company keep in touch with dealers and customers alike. The company has contracted with EDS, a former General Motors subsidiary, to provide a wide range of information technology services in Europe. As part of the package, EDS maintains a network of centers to deal with problems that car owners encounter with their vehicles. Other centers also help dealers with the software that links them to GM distribution centers.

The EDS center is one of the most ambitious in Europe. It is part of a network of nine such operations that handle software problems for EDS clients. The Plano (Tex.)-based company built a service center near Antwerp because the area is known as one where people speak many languages. Nearly everyone in the city speaks both Dutch and French, while college graduates who have acquired English, German, and Spanish are also common. Many workers at the EDS center are graduates of colleges in the Antwerp area renowned for churning out language whizzes.

EDS pays beginning operators $1,800 a month-$27,720 per year. That compares with a minimum wage of $19,000 in Belgium--not bad for a twentysomething college graduate in a country with 8.6% unemployment. EDS teaches its workers the ins and outs of troubleshooting computer software and promises them a promotion to a corporate job after two yeArs. "I am very satisfied," says Isabelle Arntz, a 25-year-old operator who works in English, Dutch, French, and Spanish. "I went to several other job interviews, but the managers said, `It is nice that you studied literature, but who is going to pay you?"'

POLISHING. EDS requires fluency in at least four languages, and the Antwerp facility now works in nine: French, German, English, Dutch, Spanish, Italian, Swedish, Portuguese, and Norwegian. There are also operators on hand who can deal with Russian, Icelandic, and Danish. On top of perfecting their language skills, operators must undergo an intensive six-week training program that familiarizes them with software and teaches them how to handle calls. The final polishing comes through taking live calls with the help of a more experienced partner. In some cases, the trainee does the talking while the trainer handles the computer keyboard.

Since working in a call center requires marketing, technology, and people skills, the jobs can offer workers a platform for moving up. "It is always good to be where the growth in consumer demand is," says Paul Makin, who has risen through the ranks at service centers to become head of European call center development for a unit of General Electric Capital Services Inc.

But not all of Europe's call centers are as sophisticated as those run by EDS or GE Capital, where contests with cash prizes liven up the tedium. At a customer service facility run for United Utilities in Bolton in northwest England, low-end pay ranges from $10,000 to $13,000 annually. A substantial portion of the hires are teenagers and others who have failed to complete secondary school, say union reps. "We tell ourselves that this is white-collar work, but it is really a white-collar sweatshop," says an employee at one British facility.

In some centers, employees complain that the work can be boring and repetitive. Unions and industrial-relations experts worry that management's extensive ability to monitor employees' performance could lead to abuse. In some facilities, any absence from the workstation--even a visit to the restroom--has to be entered on the computer. Operators are pressed to meet ambitious quotas. Supervisors listen in on calls without warning and then grade and critique the operators' performance. "You are plugged in for call after call after call," complains Helen Rose, a union representative at the Bolton center.

Despite these problems, Europe's surge in service jobs seems sure to continue. As customers of all kinds demand more and better attention, even more centers are likely to open, relying on Internet, E-mail, and fax to do the job. In this new and still developing European economy, the big employers will be service businesses rather than manufacturing companies or the government. Europe's workers and customers can all look forward to spending a lot more time on the phone.

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