A New Philosophy for the BPO Industry

Two centuries ago, a man named Robert Owen owned a textile mill in Scotland at the height of the industrial revolution. Owen’s competitors ran mills that treated their workers despicably. Long hours, dangerous working conditions, and low pay. Child labor was common, drunkenness at work was expected. It was hell on earth.

Owen had a different vision. Owen’s mills were safe, well functioning, and full of the most modern machinery and safety precautions of the day. In other mills, 12 to 16 hour days were common. Owen invented the 8 hour work day, summarizing his philosophy of what he wanted for his workers as: “8 hours of labor, 8 hours of leisure, 8 hours of rest.”

Owen knew that humans want to progress in their lives — so he started training programs that taught them skills other than doing the rote mill work that was the only means of making a living for the poor, uneducated classes. Finally, Owen started building entire communities for his workers — housing, schools, and churches.

Owen had realized that if his workers felt safe at work, could advance in their lives, and feel valued, they would be happier and more productive. They would be rewarded with economic and personal progress, and he would be rewarded for making the conditions for their success possible. His mill quickly grew to one of the largest, most productive, and most profitable in England.

But Owen had partners, and they didn’t fully agree with his ideas, even though they couldn’t argue with his results. And so, he used his own mill to push his emerging philosophy of utopian socialism forward, but his partners thought he was taking it too far. He became fed up, and sold his share of the mill to his partners in 1813, becoming one of the first millionaires in England.

Why tell the story of Owen? And why is it important to the history and future of Rethink — Fair Trade Outsourcing?

I started Rethink in September of 2015 largely because I was personally going broke. For five years, I had another business, MODsolar, that had a great dream but was in a bad industry. Margins were too low and we were in the wrong end of the business to make any money — and that meant that I was earning well below my living expenses with a young family. Worse, the pressure of always being broke meant I did things to people that I now regret.

Windyll Balasa, now my local partner in the Philippines, had already set up a “captive” office for MODsolar since the beginning of 2014, doing customer service, solar system designs in CAD, lead evaluation, and other smaller tasks. Windz ran a family-style shop, had great personal loyalty from his folks, and was very productive at a low cost to MODsolar. On a visit in early 2015, he asked me to consider providing BPO services to other American companies, knowing how profitable the industry is.

MODsolar was cratering at the time, and I was too focused on saving it to listen. But by September 2015, among the turmoil and bankruptcies striking the US solar industry, it wasn’t clear that MODsolar was going to survive; I had stopped getting a paycheck earlier that summer, and I needed to build something that could support my family.

I got back from a visit to the Philippines in the first few days of September. I launched a website less than 30 days later, and Rethink got its first contract for outsourcing services in November 2015 for 3 data encoders. By the end of 2016, we were 100 people. As of this writing, we are over 300 people, and we expect to double by next year.

Even though we enjoyed explosive growth in 2016, all was not well. The scale of the growth we felt in 2016 challenged us operationally, and so Windz and I decided half-way through 2016 to hire experienced managers from the BPO industry to help us manage the growth. It seemed like the logical and prudent thing to do — hire experience when you feel you’re not.

But what we didn’t realize is that there are things you can’t control when you employ one hundred people, that you can control when it’s just 20. That managers will create the business culture for you if you don’t do it. And unfortunately, the managers had bad habits that they themselves were taught by their former employers — some of the biggest BPO operators in the Philippines.

The BPO industry in the developing world is set up to fail its employees.

By this point, the labor environment inside the BPO industry is well documented: full of all types of exploitation and violence — including sexual predation, class exploitation, wage theft, intimidation, and overall unsafe work environments. That’s why the average large BPO worker tenure is just 18-months.

Given what we’re trying to do at Rethink, I think it’s important to be honest about actual things other BPO’s have done to their Agents, such as:

• Other BPO companies hide information about worker rights from them, hoping to exploit their ignorance, even though the Philippine constitution, Philippine Civil Code, and Philippine labor law provide significant protection for Philippine workers.
• Other BPO companies give large signing bonuses, but it’s just a bribe to get agents to accept their cruel work environments when they face some sort of short-term hardship and need the money.
• When Other BPO companies lose accounts, they use it as a way to restart the clock on agent regularization.
• Other BPO companies close one entity and re-incorporate, using it to steal raises and back pay from agents, forcing them to go through the hassle of filing labor department claims (many of whom don’t).

Unfortunately, our managers brought their bad and unethical training into our workplace. Like the rest of the industry, instances of sexually inappropriate behavior, sexual harassment, intimidation in the workplace, and workplace theft were now occurring in our company. The result? Not surprising, agents didn’t want to come to work. Daily absenteeism was 8% (Still lower than the industry average of 12%), and people were leaving.

By the end of 2016, I finally realized what Owen did two centuries ago: although labor and capital have been in conflict for centuries, those capitalists that can resolve this conflict can usher in a new form of harmony in labor-capital relations, and profit as a result.

As a capitalist, I came to believe that when capital (the business owners) prioritizes the needs of labor — both flourish. It is counter-intuitive for the capitalist to seek harmony with labor — he has been historically much more comfortable exploiting labor — as were our managers throughout 2016.

We have progressed, but have not escaped history.

Sadly, Philippine history bears this out. When the Spanish came to the shores of Lapu-Lapu in 1521, they were simply extending the global race for controlling labor from their earliest exploits in Mexico and South America. The Spanish left behind many things here in the Philippines — some good and some bad. But as it concerns us — what they also left behind was a history of labor exploitation.

It’s sad — you would think our world had gotten better and had realized what Robert Owen did in the 1790s. But the evidence exists otherwise right up until our own times. Almost 30 years ago, a different type capitalist came to the shores of the Philippines, again looking for labor. Instead of growing cotton, or pineapple or forging steel, they wanted their millions of customer service calls answered at a lower cost.

But this time the Philippines was smarter — your revolutionary president, Cory Aquino knew that the Philippines’ greatest resource was its people. She knew her people’s labor could be a force for global economic good — but she wanted it done justly, safely, and in a way that moved Philippine society forward.

The rights of Filipino laborers are already enshrined in the Philippine constitution before the 1986 People Power revolution that toppled a dictator. But, thanks to Cory and her allies in government the amendments — notably Republic Act № 6715 — to the Philippine Labor Code made sure that the constitutional rights of workers are strengthened and remain protected. If all of this law and doctrine exist to protect them, why does exploitation continue?

Just listen to our agents’ stories to learn of first-hand accounts of what it’s like for workers in big BPO companies.

Sadly, these are the realities of my chosen industry. And Windz and I had inadvertently let it into our workplace. I was sickened and angry when this all came to a head in December 2016.

But I was not powerless.

Once we asked the agents what was really going on, it wasn’t hard to collect enough verifiable and multi-source evidence to act. We quickly fired the offending managers, sent them on their way. But I was ashamed at what I let happen.

I called an all-hands meeting in February 2017 and apologized to the staff.

Forging a divergent path, inspired by Owen.

After Robert Owen sold his mill in 1813, he spent the rest of his life promoting the building of a legal framework in England to protect workers. Frustrated with the slow progress of changing English law, he decided to show the world what he meant. In 1825, he created a worker’s paradise — a community built specifically for the worker — in Indiana in the United States. It’s name? “New Harmony.”

Ultimately, New Harmony was never successful as Owen envisioned it, and he died before it was completed. While we are not social utopians (we are fervent capitalists), we are seeking to combine the labor productivity and fulfillment ideas of Owen with the needs of a global market for labor, specifically in the call center industry.

Today we introduce our own version of New Harmony at Rethink. Today, we rededicate this company to our version of labor-capital harmony. This new vision needs new language.

Today, we declare ourselves a “Fair Trade Call Center.”

You can see more on our website and why we’ve adopted the “Fair Trade” label, but what it means is actually quite simple: It means we are reorganizing the purpose of our company to serve our agents — and specifically — to ensure that our agents’ social and economic welfare improves during their employment with us.

These ideas are not new — we are just applying Robert Owen’s labor system designs and Cory Aquino’s hopes and dreams for Philippine laborers to the BPO industry. But, of course, such a grand vision means nothing without tangible actions.

So today, we take four key actions:

First, we pledge fair pay and economic progress.

We will continue to pay our agents in a way that ensures that as they progress in their careers with us — they will enter the middle class of Philippine society.

Second, we pledge personal safety.

Philippine society is still harsh and can be cruel — there are many dangers in our agents’ daily lives. Other BPO companies have allowed this harshness, cruelty, and regrettable violence into their work environments. Not here.

Third, we pledge Personal progress.

Humans want to grow; we want to progress. Today, we pledge that we will invest the time and resources needed to build our agents’ personal capacity.

Fourth, we pledge transparency and accountability.

How can we create a harmony between labor and capital when we’re not open about what we want for the company, and how it operates? This extends to to including agents’ voice in the direction of the company.

But ultimately, these four principles are incomplete. The concept of a fair trade call center wouldn’t be anything without ensuring that our agents know their rights, just like Cory Aquino wanted.

The Agent Bill of Rights

In a ceremony on January 26th, my Philippine partner, Windz Balasa and I, pledged to our agents that we would uphold these Agent Bill of Rights.

We are only successful together — capital and labor. We need a new way of working together — a new social contract to help us achieve our own new harmony. I call that contract the “Agent Bill of Rights.”

1. AS LONG AS WE HAVE BUSINESS, YOU HAVE A JOB.

Security in pay and benefits, more than anything else, promotes your progress in life. At Rethink, as long as we have business and you continue to be productive, you’ll have a job. We have a diverse number of accounts, so when an account closes for reasons you cannot control, we’ll move you to an available slot in other teams, so long as the job matches your skill set.

2. YOU WILL HAVE ACCESS TO PROGRAMS THAT WILL FUEL YOUR SUCCESS.

Management creates the conditions that make it possible for you to succeed. Rethink promotes holistic development that focuses on aspects of personality, leadership, and skills.

3. WE WILL NEVER DENY YOU JOB MOVEMENT OR ADVANCEMENT.

Humans want to progress in their lives — not just get older. In our industry, working for more than one client is vital to growing and becoming more valuable; thus, we have more opportunities to earn. This extends to supervisory and management opportunities, which you should always be on the lookout for.

4. YOU WILL NEVER FEEL THREATENED AT WORK.

Unfortunately, the BPO industry in the developing world has one of the worst reputations for workplace safety. Never mind that agents have to worry about hostile customers, sometimes they have to worry about aggressive managers and co-workers as well.

Let’s not bury this truth — it happens. But not at Rethink. By now, we have proven to you that we are willing to remove senior leaders whose behavior is threatening. We reaffirm that promise in these rights.

5. YOUR MANAGERS MUST LISTEN TO YOU, AND TREAT YOU FAIRLY.

Let me be clear: when evidence exist that managers have ignored your concerns or have shown favoritism, they will be sanctioned. We will have a fair workplace, and there’s no two ways about it.

6. YOU WILL NEVER BE SUBJECT TO RACISM.

When a customer is treating you badly, chances are they’re not racist, but just really pissed off. But unless we can act to defend ourselves if we feel threatened, we will be too afraid to try and fix the problem about which the customer is so pissed off.

Therefore, we promise that the company will only sign voice contracts with customers wherein we are allowed to end calls if someone is clearly racist.

7. YOU DON’T HAVE TO HIDE WHERE OR WHO YOU ARE.

The reason you like non-voice accounts is because they invert the power dynamics between you and the customer. So in a voice account,when you pick up the phone and have to hide where you’re calling from, you automatically begin the short relationship you’ll have with the caller with mistrust. You’re automatically at a power disadvantage.

By announcing proudly who you are and where you are, you will instantly disarm the customer, show them that you’re not afraid, and make your chances of serving the customer exceptionally that much stronger.

8. HEALTH CARE IS A HUMAN RIGHT.

Let’s be honest: it’s not the company’s responsibility to care for your health. We all pay enough in taxes in this society to pay for decent health care. But our job is not to cure Philippine society, but to help you succeed within it.

Thus, Rethink must provide more options for you. In addition to basic HMO, we shall provide programs that get at the root of how sickness or injury prevents you from being stable economically.

9. YOU SHOULD BE WORKING WITH FRIENDS.

Working with friends is more fun and we’re more productive when we do it because we’re spending time with people we like. Not only should we be asking friends to come work with us, but we should also ensure that those people are nice, and fun to work with. When you look forward to seeing the people you work with, you’ll be here more and feel more fulfilled. You’ll also be happier.

10. NEITHER MANAGEMENT NOR YOU SHALL VIOLATE THESE RIGHTS.

What good will all of these rights do unless we are prepared to back them up at the highest level of the company? You must use the board representative’s authority and influence if the need arises.

On January 26th, each agent was given an Agent Bill of Rights card that clips on to their employee ID. An omnipresent reminder that we want them to know their rights, and to know that we will uphold and defend those rights. Going forward, every new employee will be pledged these rights personally by either myself or Windz.

The Agent Bill of Rights card that was given to agents to hang from their lanyard along with their company ID card.

Just the beginning.

There is much more yet to be written about how we make a Fair Trade Call Center. Many parts of our philosophy are evolving, others are already set. I will endeavor to express and develop this philosophy through the remainder of 2018.

So this is just the beginning. The beginning of the journey to apply the fair trade principles to the call center industry. The beginning of the journey for hundreds, if not hopefully thousands of people in the developing world to improve their economic and social welfare by participating in the global labor market.

I hope that no longer will the answering of customer service calls be derided on both sides of the Pacific. Instead, in a Fair Trade Call Center, international trade can be realized for the win-win it has been for centuries, and labor and capital can find a new harmony in working together.

Mike Dershowitz
Outside of Philadelphia (the cradle of liberty), PA, USA
February 1st, 2018