Low-Wage Work in Denmark

CHAPTER 7

CHAPTER 7 Pay and Job Quality in Danish Call Centers Ole Henning Sørensen The “call center” as an organizational principle is becoming the primary vehicle for customer interaction. As in the United States and several other countries, including the United Kingdom, the Netherlands, and Germany, call center work has been among the fastest-growing types of employment in the Danish economy since the late 1990s. In 2004 there were an estimated 300 and 400 call centers in Denmark. Approximately 25 percent of these were subcontractors concentrating on selling call center services. Between 20,000 and 25,000 people are employed in Danish call centers, or around 1 percent of the total Danish workforce (Sørensen and El-Salanti 2005). Historically, service provision has been personal and service labor markets local in certain sectors such as banking and retail. Other sectors , however, such as telecommunications and travel, were using telephone-mediated services long before call centers took off as a dominant model for customer service. Other kinds of companies and sectors, such as utility providers and some publicly owned companies , have had a low orientation toward service, and customer service has generally been much less emphasized in Denmark than in the United States—probably owing to the less competitive market situation (Huber and Stephens 2001)—for both publicly and privately owned companies. In Denmark the increased use of call centers as an organizational principle represents not simply a transformation of traditional meaningful jobs based on local, personal service but the creation of new customer services. These are accompanied by new job functions that are central to Danish companies’ aims to survive in an atmosphere of increasingly service-oriented competition and in some cases increasingly deregulated markets. Another difference between Denmark and the United States is size: the greater physical distances in the United States, together with lower telecommunication 258 prices, have made the use of telephone-based customer services much more common there. According to Rosemary Batt, Larry Hunter, and Steffanie Wilk (2003), the transition from personal service to call centers in the United States has entailed changes from: • Jobs with variety and personal relations to impersonal, routinized, and monitored jobs • Local service markets to locality-independent disposable workplaces • Job security with career opportunities to dead-end jobs in remote areas • Low wages to even lower wages, owing to downward pressure on wages These trends are of special concern to call centers that focus on the mass-market services in the United States, whereas the exception has been business-to-business centers. Call center technologies make it possible to differentiate service jobs according to function, product, and customer segment and to create large business units that focus on specific segments. Management is thus able to deploy different service management strategies and job designs according to the customer segment (Batt 2000; Wood, Holman, and Stride 2006). The developments in telecommunication technologies and costs make it possible to (re)locate and outsource centers easily. Because the technologies also make it easy to monitor employees and to use industrial engineering principles, call centers have been depicted as new types of factories for white-collar workers (Fernie and Metcalf 1998; Taylor and Bain 1999). The typical employment model for mass-market call centers is based on low wages, low skills, limited training, and high turnover (Batt, Doellgast, and Kwon 2005). In Denmark, call centers have also had a popular image of providing low-quality jobs with a high degree of monitoring, monotonous working conditions, and insecure employment conditions. The trade unions and the press have used examples of unjust treatment of young people—for example, dismissals without salary—to burnish this image. The critique has been especially targeted at the small telemarketing companies that hire young people on dubious contracts Pay and Job Quality in Danish Call Centers 259 with a promise of high bonuses. But the large in-house centers of prominent companies have also been exposed. Cases have been brought forward in which employees were highly dissatisfied with the close monitoring or were fired on short notice without the promised bonus. Recently, however, the public image of call centers seems to be changing. Some of the large call centers are collaborating with the Employers’ Federation and the trade unions to establish a more positive image, and some call centers have dealt with the negative connotation of “call center” by changing the term (and partly the function) to “customer service center...