BPO risks from proposed US legislation
By Staff Writer
PROPOSED legislation could make it difficult for US-based Business Process Outsourcing (BPO) firms to set up shop in developing countries like South Africa.
The Keep Call Centres in America Act, proposed by U.S. Senator Ruben Gallego earlier this year, aims to discourage companies from setting up call centres outside the U.S. and from adopting Artificial Intelligence (AI) into their business processes.
The bill comes as an increasing number of US companies like Concentrix and Amazon have set up BPO call centres in South Africa.
In recent years, this country’s efforts to attract international BPO firms have paid off, as they contribute around R24-billion annually to the Western Cape economy, matching the impact of the tourism sector, and have added around R3.6-billion in new FDI to the local economy.
It has had a marked impact on employment, with the sector now employing over 270,000 people in six cities, of which 65,000 serve international clients.
The Keep Call Centers in America bill now looms over not only South Africa’s BPO sector, but also those of India and the Philippines, which have also set up call centres to cater for offshore businesses.
The bill will require US businesses that opt to set up call centres abroad to notify the US Department of Labour at least 120 days before doing so. It also requires that the department keep a public list of companies that have chosen to relocate call centres overseas, and retain them on the list for five years.
Those on the list will be ineligible for new government grants and government-guaranteed loans, while those not on the list will be given preference for government contracts.
The bill will also require companies to keep track of how many jobs are lost to AI.
What impact the bill will have on the South African BPO industry is hard to say, as the legislation first has to be debated and then voted on in various committees in the lower and upper houses.
Once it is passed out of the committees, it will then need to be passed by the House of Representatives, before it gets voted on by the Senate, and then awaits the signature of the US president Donald Trump, to become law.
After that, the companies will have a year to comply before it comes into effect.
At this stage, it is unclear if there is enough votes to get the bill out of the committees, and if it could be passed by both houses.
Lawyer Blake Landis wrote in the National Law Review that it would be a while before the proposed legislation is turned into law.
“Overall, the Keep Call Centers in America Act remains in the early stages of the legislative process. Whether it advances through committee or gains broader congressional support remains to be seen at this time.”
Even so, he noted that the drawing up of the legislation showed that US legislators were now starting to take how technology affects consumers and workers a lot more seriously.
“It reflects a growing focus on regulating the intersection of technology, labour, and consumer interaction. We are witnessing this as an area of increasing relevance to businesses operating in highly regulated communications spaces.”
