‘Vendotel’: coordinating HRM i

‘Vendotel’: coordinating HRM in a multinational call centre vendor

Vendotel is a multinational call centre vendor based in the United States, with call centres in around a dozen countries across North America, Europe, and Asia. It prided itself on its ability to keep labour costs low, through locating in countries such as India and Indonesia, while adopting lean scheduling and intensive performance monitoring practices in higher wage countries. In most locations Vendotel had no collective bargaining agreements. The one exception was France, where it was obliged to follow the terms of the sectoral agreement for third-party services.
Vendotel expanded into Germany, France and the United Kingdom in the late 1990s. Managers in US headquarters had misgivings about the expense of operating call centres in Europe, where they were often forced to modify their ‘best practice’ HRM practices to fit local labour laws:
The biggest one is the employment agreement we have to enter into with employees there . . . In the US, it is employment at will, and so if an employee doesn’t work out, we can fire him or her. There, we have to take on a lot of responsibility for the employee once we hire them on a permanent basis, so we need to find ways around these rules . . . Otherwise, it’s like a contract for life, and you put yourself at risk, because in this business there are major fluctuations: what if you lose a client, and then you’re stuck with all of those employees? (Interview, HR manager (HQ), July 2003)
The company also faced challenges in harmonizing its practices across employee groups, as many of its European locations had been acquired and the existing workforce retained their former contracts under Transfer of Undertakings rules. For example, the previous workforce had more frequent breaks and more flexibility over when they took them, and these workers refused to negotiate new individual contracts when the new management tightened scheduling. This led to some resentment between groups of employees, and managers complained that Germany’s ‘rigid’ regulatory environment was preventing them from implementing a more consistent policy.
However, Vendotel has had some success in diffusing a common culture throughout the organization. Several layers of management were dedicated to coordinating strategies and aligning ‘metrics’ across the company’s European call centres. At the same time, specific incentives and training were also driven by different client demands. Most of Vendotel’s clients were multinational firms that contracted with the supplier to service their customers in North America and Europe. This led to intensive benchmarking and communication across ‘account groups’. More recently Vendotel had also joined a quality certification programme developed for the call centre industry, in which third-party monitors visited different locations to ensure they were meeting targets for reducing staff turnover, improving training quality, and meeting performance targets. This was driving more standardization across the European locations, and managers were convinced the certification process had contributed to improved quality.

For further details, see Doellgast (2012).

Review questions

1. How did Vendotel’s relationships with its clients influence the HRM practices it adopted?

2. How did managers seek to create consistency in HRM across locations, and what challenges did they encounter?

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