Phonesourcing (also known as homesourcing) is drawing new attention from Fortune 500 companies that are retreating from outsourcing in favor of home-based call centers and local call handling.

Phonesourcing basically means contracting with a private firm to hire, train and manage a small army of local or regional call handlers. Outsourcing isn't new — but what is new is the growing scope and scale of the U.S. home-based call sector. U.S. home-based call agents are growing at an annual clip of 20%. That's much faster than the growth rate for calling centers in other countries.

Home-based call centers in the U.S. handle both routine calls — questions about product prices, bank balances or resetting a password — and more complex ones, for technical questions, debt collection and business sales. They also provide answers by instant message or e-mail. Because call handlers are instructed not to mention that they are working for a third party, most customers of the particular bank, wireless firm or retailer have no idea they are not speaking with a company employee.

The hiring firm drafts the script and dictates what greeting and style the call handlers adopt. Agents are most eagerly sought after in the wireless industry, in which increasingly complex smart phones result in bewildered calls about new features or spotty service.

Demand for home-based call agents is also rising among retailers, financial institutions and service organizations. Pittsburgh, Pa., recently suffered its snowiest February ever, stranding many local AAA employees during repeated storms. AAA, which helps get stuck drivers back on the road, shoveled off many of its calls to Alpine Access, one of the fastest-growing companies in the home-based calling business.

Because Alpine's employees were working from home, the storm didn't impact their availability. "These aren't agents at home with a TV playing or a crying baby in the background," says Steve Popovich, director of automotive services for AAA's Pittsburgh operation. "The service quality is excellent, and when storms hit and our call boards light up, they can add people quickly." Hiring and training new call handlers can take about two months, but once trained, handlers are ready for extra shifts when necessary.

But they do require home based workers to be equipped. It is generally acknowledged that to get hired to work from home an applicant must have a newer computer, virtual fax access and other general tools. You should have:





Alpine, which has also worked with companies like J. Crew and Office Depot, has doubled its annual revenues since 2005, to more than $50 million. Other major home-based calling firms include LiveOps, which has 20,000 agents (its 2009 revenues exceeded $100 million) and has worked with companies like Kodak and eBay; and West at Home, which has 14,000 agents and says it is getting 4,000 job applications a month.

Alpine's at-home call handlers recently demonstrated their value to a client by selling 30% more office supplies to medium-size businesses than a comparable Philippines-based team had. At an average age of 41 years old, employees are older and more experienced than most foreign-based operators. In addition to 150-plus hours of training, top call handlers benefit from incentives, so they earn more when callers buy more, which is not always the case for cheaper outsourced services. What's more, it helps to have regional call handlers who understand local mores and office routines — and who work with just one company at a time. "We work with large retail banks, and they don't want someone taking a private banking call one minute and a pizza call the next," says a company manager.

Much of the growth in the at-home agent workforce comes from work-at-home moms. At LiveOps, 75% of the call handlers are female, and a growing number are experienced retirees. About 85% of West at Home agents are female; Alpine's workforce is 71% female. That gender breakdown may be starting to shift, however; half of new Alpine applicants are male.

The attrition rate for these workers is also relatively low, says LiveOps marketing executive Paul Lang — about 10%, compared with the 70% to 80% that is typical among factory-like brick-and-mortar call centers. Call handlers like being able to set their own hours and goals, Lang says, and many use their LiveOps work to supplement income from other employment.

Alpine employees typically start at $8 to $9 an hour, even with decades of work experience, moving up to $12 an hour in some cases. Home-based calling may soon benefit from new federal attention to flexible workplace initiatives. LiveOps CEO Maynard Webb last week attended a White House forum on workplace flexibility, during which President Obama announced that his chief technology officer, Aneesh Chopra, is developing a plan to enable more federal employees to "telework," or work remotely.

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