The news that between 450 and 600 jobs are to go in Derry at call centres operated by US-owned outsourcing firm Stream has come as another blow to the economy of Northern Ireland. According to the local press, Stream’s decision to cut back on its Derry operation stems from the loss of an important Post Office contract to rival firm Convergys. Stream Northern Ireland’s Managing Director Jeff Jennings told the BBC that these are “tough times for the call centre sector”. The illusion is maintained that in the cut and thrust of the open market Stream had no choice but to “shed” jobs in Derry.
According to the Derry Journal, Stream International have received £2.32 million worth of Invest NI assistance since 2000, including £1.2 million in taxpayer’s money which was paid to the company for several projects, including a number of job creation programmes.
The most recent payment was a £60,000 award in 2007 £32,000 of which was used to hire a “Business Improvement Agent”, who by all accounts saved Stream £1 million.
In the light of Stream International’s recent decisions Alastair Hamilton, Chief Executive of the neo-liberal quango, Invest NI, confirmed to SDLP leader Mark Durkan, that Stream was in a position to apply to the EU-funded Short-term Aid Scheme which, according to Durkan, “can assist a small number of core staff to be retained by companies facing severe short-term difficulties, as a bridge out of those”. (Incidentally, Hamilton’s predecessor as Chief Executive at Invest NI earned £160,000 in 2008.)
Should Stream International fail to hold to its promises of job creation, Invest NI is in a position to claw back some of the public money that has been thrown at the company but according to the quango this option is not yet on the table.
Call Centres in Northern Ireland
In the UK an estimated 750,000 people work in call centres and over 17,000 workers are employed in the sector in Northern Ireland constituting 2 per cent of the population.
Call centres are notoriously exploitative and authoritarian working environments. Research has shown that call centre work is more stressful than work in other fields. In early 2001, the TUC set up a short-term hotline for call centre workers. Among the 500 staff who called many spoke about bullying, long hours, impossible sales targets and general job dissatisfaction. The calls documented employers in the industry using various techniques to drive up the exploitation of staff. Some call centre workers are forced to work under constant surveillance. Workers also complained of suffering from “acoustic shock” (damage to hearing caused by sudden loud noises during calls) that had left them suffering from depression and other health problems. The most stressful aspect of the job is on the caller operator’s emotions. Workers are required to remain constantly pleasant and attentive callers while under intense pressure to meet sales targets within strict time limits. Only Union activism has tempered exploitation and even humiliation by management in Call Centres. One Union activist in England tells of how in one company sales and service mangers and team leaders came up with “this wonderful idea of making dunce’s hats for sales and service advisers which they were forced to wear if they did not make a sale within an hour’s period.” Pressure on the part of the Union ensured that the hats were gone within 24 hours.
In relation to salaries, conditions in Northern Ireland call centres are the worst in the UK. Northern Ireland call centre workers receive salaries over 26 per cent below the overall average. Wages in call centres in Northern Ireland are 15 per cent lower than Wales, 14 per cent lower than Scotland and 13 per cent lower than the lowest English region. Even the East Midlands, England’s lowest paid region, has salary levels more than 14% higher than Northern Ireland’s. According to International recruitment firm Beeswax, the average salary paid to an entry-level customer service agent in Belfast, for example, is £13,000 per annum, while a team leader would expect £19,000. In 2008 R. Scott Murray, CEO of Stream International earned $418,923.00 (£253,000), including bonuses and other compensation.
Stream International (Again)
While Mark Durkan may believe that Stream is “facing severe short-term difficulties” and Stream NI’s Jeff Jennings bemoans the current state of the sector, Stream’s US-based headquarters is much more upbeat about the business. In mid August Stream Global Services, Inc., and EGS Corp., the indirect parent company of eTelecare Global Solutions, jointly announced that they have combined. The deal will be completed later this year. As a result of this combination, Stream Global Services expects to generate revenues approaching $1 billion for the year ending December 31, 2010 and maintain financial sponsorship from a group of equity and hedge funds – institutions that collectively manage over $50 billion in investments.
Call Centre Jobs – the Way Forward?
Beyond crucial questions of terms and conditions of work, there is the broader question of whether the setting up of call centres should be touted as a model of economic development, here and around the world.
According to the Communist Party of the Philippines, call centres “cannot help develop the economy, and in fact worsen … imperialist exploitation … , mainly through the exploitation of cheap labor. They thwart genuine economic progress founded on the development of the country’s basic industries. Just like the massive exodus of migrant workers to other countries, rising employment in call centres merely obscures a backward economy, the lack of genuine national industrialization and widespread unemployment in the country.”
Although the issues here are somewhat different to those of a third world country like the Philippines, we also have to ask whether call centres should be encouraged to set up here by quangos such as Invest NI, which are in the business of giving tax payers’ money to fantastically rich multinationals.
Justin O’Hagan is a a member of the Workers’ Party’s Ard Comhairle and Northern Regional Executive
Photo of a Newry Call Centre courtesy of the BBC
Latest posts by Justin O'Hagan (see all)
- Poverty and Class in Northern Ireland - October 14, 2009
- Call Centre Workers in Northern Ireland, Stream and Invest NI - August 24, 2009