Insourcing time

Here’s a recycled idea: outsource to small towns instead of overseas.

It made sense in the 1930s and it makes sense now.The reason salaries are high in large cities is partly because the monthly rent on an apartment is higher than the mortgage payment on a modest 3-bedroom home in a smaller metropolitan area. I remember being at a financial seminar where the speaker counseled somebody who hated living in Chicago. He didn’t want to move because he’d make less money. They talked about why he needed the salary he was making, and he realized the only reason was so he could continue living in Chicago.

Needless to say, he found a lower-paying job in a city with a lower cost of living, and ended up much happier.

Since high cost of living makes for high salaries, high cost of living is expensive for corporations too.

Manufacturing jobs–back when anything was actually made in the USA–tended to herd in cities. But some companies put their factories in rural areas, where the labor was cheaper, in order to undercut their competitors’ prices.

In the so-called Information Age, nothing keeps companies from locating call centers and other facilities in small towns. It may or may not be cheaper than India–but the cost of doing business in India is increasing–but, let’s face it, there are issues with going overseas.

When I was in college, even the most liberal students I knew complained about foreign teachers’ assistants, who were graduate-level students put in charge of teaching the weedout classes freshmen have to take. Besides the thick accents, cultural differences–ranging from figures of speech to simple expectations–could get in the way of understanding.

Add a VOIP line to the mix and you have a recipe for disaster. Not that shareholders know anything about any of this. (Most of the shareholders who make the biggest racket probably didn’t go to a public university.)

The company I work for (no, I won’t give its name) does it right. Not only are the call centers in the United States, there are several of them. A customer from the South is going to talk to a representative from the South. Accent and all. Customers from the North are going to get the Minnesota call center more often than not. Westerners will speak to a Californian.

That’s important. I’ve been called a Southerner exactly one in my life–by someone from Detroit–but my in-laws definitely consider themselves Southern. When I told them that my Dad was saying 15 years ago that biscuits and gravy causes colon cancer, their response was, “That’s just a Yankee doctor talking. No Southerner would ever say that.”

Suffice it to say they don’t consider me a Southerner.

So I like this idea. Outsourcing closer to home will neatly solve the cost problems of the big city and the cultural problems of offshoring. Some people prefer living in a small (or at least smaller) town anyway.

The article I linked says this could be the renaissance of small town USA. It might be too early to say that, but I don’t see how that could be a bad thing.