The growing trend of globalization has an impact on businesses as well as the lives of consumers, business owners and workers. One of the effects of globalization is labour arbitrage, which refers to the movement of jobs because of changing economic conditions. Labour arbitrage can take several different forms depending on the specific circumstances.
Dealing with declining revenues more and more publishing companies are forced to modern labour arbitrage: the most common form is – partly or completely – outsourcing of departments. This affects mostly service departments like accounting, bookkeeping and HR services. But more publishers dare to outsource departments or functions of their classical value chain.
An excellent example is the advertising department. Based on standardised processes nearly everything can be done independent of the location – with parts of the sales force as the only exception. This includes especially any type of back office processes: commercial processing of orders, ad production, processing of proofs, invoicing and complaint management. Telesales as a part of the sales force complements the list.
To understand the recent development we have to look in the past: 20 years ago the first publishers established call centres to improve service and reduce cost. After recording only standardised ads for jobs, cars and property market mainly for B2C-customers first, call centres developed more and more into highly specialised service departments which fulfil nearly every customer request – up to very sophisticated B2B-clients.
Today nearly all publishers run parts of their business in call centres – either in their own company or as a customer of a specialised service provider. And because of the growing cost pressure the readiness to move into regions with lower location and labour costs, f. ex. Poland or India. is growing as well. There the publishers meet highly professional and specialised service providers. Of course clients will be welcomed in their mothers` tongue and will probably not even notice that he/she is speaking with someone abroad.
From the discussions with clients we know that most of the publishing companies are thinking about but are sceptical to move services into foreign countries. But the trend goes on and actions will follow, for sure.