A comparative study of life in call centres reveals why democracy at work still matters in a service economy
Jobs in call centres are not highly-prized. Many who work in them can be sacked for not meeting targets, are allowed to take only minimal breaks, must submit to continual monitoring by bosses and can have their pay cut with little notice. Joining a union may not help because companies often refuse to deal with them.
Many argue that these kinds of low-wage, insecure jobs are an inevitable result of the shift from a manufacturing to a service economy – that intense and increasingly global competition means that firms must drive costs (including labour costs) as low as possible in order to compete.
Better for the economy of a nation and its peoples’ living standards, goes this argument, that they grab some of the business available rather than see it outsourced to another country.
But is it inevitable that service jobs entail low pay and poor conditions?
Dr Virginia Doellgast went inside call centres in the US and Germany to interview workers and managers and to conduct surveys on how the businesses were run. This allowed her to construct a detailed comparison showing how the two countries’ work culture and policy produce very different effects.
In her book Disintegrating Democracy at Work she discovers that it is possible for call centre workers to be well paid, highly trained and to feel valued by the company. However, this only happens when workers have a voice in how their jobs are structured and how production bonuses are shared - and this in turn is only achieved through collective bargaining. While some employers may invest in worker voice and skills as part of a ‘high road’ strategy, call centre managers face intense pressures to take the ‘low road’ through cutting wages and de-skilling. Strong unions and bargaining rights can help workers make the case for an alternative model in these kinds of high-pressured work settings.
In general, Dr Doellgast’s research showed, German firms were much more likely to give their employees some control over their working life. A comparison of the organisation and conditions at call centres run by ‘US Telecom’ [pseudonym] and Deutsche Telekom, both private firms arising from the deregulation of the telecoms market, displays some of the evidence.
As the table shows, staff at the German company tended to stay with the firm much longer and took few fewer days off sick, despite similar salary levels. They were also subjected to less invasive monitoring of performance, were given team-based rather than individual targets and had a great deal of control over their schedules and break times.
In short, working conditions at Deutsche Telekom were markedly better, and staff - while they grumbled about their job like anyone else - were horrified when they learned of the pressures their American counterparts worked under. Crucially, the improved conditions for workers also reduced costs for the company in areas like absenteeism, recruitment and fraud.
Dr Doellgast said: “It was clear that German managers much more often took the ‘high road’ than those in the US, investing in skills and giving employees more control over their work. Telecoms firms in both countries were subject to the same market pressures, but they responded in different ways.
“The reason why Germany is different is that it has stronger laws and institutions supporting workplace democracy, which are still present in large companies like Deutsche Telekom. It has been generally agreed that staff should have a say in how their workplace is organized, and the firm as a whole benefits when they do.”
However, she also found that this workplace democracy is increasingly fragile. As managers move to outsource jobs to companies with lower pay and weaker union representation, Germany’s tradition of strong co-operation in industrial relations is coming under threat.
Yet the drift to low-quality and low-paid service jobs is not an inevitable market outcome, concludes Dr Doellgast, a lecturer in comparative employment relations in the Department of Management. Survey and case study evidence from Germany, as well as other European countries, such as Denmark and France, show that policy choices matter. Governments, unions, and employers can work together to set up shared institutions that give workers a stronger role in collective decision-making and encourage industries to set employment standards across the sector.
This is a model that balances fairness, efficiency and human rights but also helps advanced industrial economies keep their competitive edge. Consent and co-operation at work aid in the development of ‘good jobs’ – both in lower wage workplaces and in those highly-skilled and innovative service industries on which developed nations increasingly depend.
Democracy at work then may be not just in the interests of employees but of businesses and of a nation as a whole.
Disintegrating Democracy at Work: Labor Unions and the Future of Good Jobs in the Service Economy by Virginia Doellgast is published by Cornell University Press.
For full details of Dr Virginia Doellgast's research and publications see her entry in the LSE experts directory: Virginia Doellgast
Department of Management
posted March 2012