Dell and délocalisation in France
This article by Andrew Bibby, in a slightly different form, was first published in Teleworker, 2005
The French word for it is délocalisation. The English language, unfortunately, is less helpful – a direct translation doesn't really work. The nearest we have is probably the rather clumsy term ‘offshore outsourcing'.
Whatever you want to call it, however, it's making the headlines on both sides of the Channel. Britain, of course, has been very aware in recent years that call centre and back office jobs are migrating abroad, to lower-cost destinations such as India. In France, the same trend is developing, a year or two behind.
Le Monde reported in April this year that articles on délocalisation appeared in the French national press two hundred times in 2000, nine hundred times in 2003 and four thousand times last year. In France's case, the favoured destinations include central and eastern European countries (this meant that the issue smouldered in the background during the recent EU Constitution referendum debate) and some parts of francophone Africa. Morocco, for example, is beginning to become a popular base for French call centres, with the state rail company SNCF and France Télécom among the early operators there.
Unsurprisingly, when the story broke about two years ago that the highly successful US-based computer company Dell intended to open a new call centre in Casablanca, the news did not initially go down well in Montpellier, where since 1992 Dell had been running its main southern Europe headquarters. Montpellier, a university city and capital of the Languedoc-Roussillon region, has about 400,000 or so inhabitants, about a thousand of whom had found work at Dell's bright new office complex. From there they serviced not only the French home market, but also Spain, Italy, Portugal and Greece, selling PCs and laptops, handling technical support enquiries and coping with administration. Were these jobs about to disappear to north Africa?
The Casablanca call centre is now open and well-established, but much to the everyone's relief Dell so far has also chosen to remain in Montpellier. Perhaps – as the Le Monde article itself suggested – there could have been a little too much scaremongering about the dire effects of délocalisation on the French economy?
In fact, what Dell's particular approach to délocalisation suggests is that there is a degree of subtlety about the way in which companies are choosing to move operations offshore. In Dell's case, its home customers in France are indeed now serviced from Morocco. French people who ring up from home to upgrade their laptop or buy a new printer, say, are likely to have their call transferred there. The argument Dell advances is that profit margins are very tight in the domestic PC market, and that the savings in wages which can come from basing the sales centre offshore help keep the company competitive.
But Dell has decided to distinguish between home PC users and small and medium businesses, with the latter still being serviced from French soil, in Montpellier. The Montpellier base also deals with local government clients, the state education department (for school sales) and with the self-employed. This is the higher value-added segment of the market, and it is also the one which is most crucial to Dell's financial health in France (89% of its turnover there comes from business customers). Montpellier continues also to service business customers elsewhere in southern Europe.
Dell's HR director and co-director of the Montpellier operation Patrick Thill shrugs off discussion of délocalisation which he says is not a threat to the company's future in Montpellier. He points, too, to the opening there of a new in-house training complex offering diplomas in sales techniques, which the company has developed in conjunction with the local institute of commerce. Casablanca, he says, is simply for low value-added operations.
If this is encouraging news for the Montpellier regional economy, nonetheless French staff at Dell have had to become used to working for a company which is in significant ways quite unFrench in its management style. “It's an American culture here,” M. Thill points out. As in other call centres, there is constant measurement of staff performance and setting of targets.
The workforce is young (average age 31) and very cosmopolitan, with 250 or so of the 1000 staff from outside France. In total, there are twenty-nine nationalities represented, including not only Spanish, Italians and Greeks but also northern Europeans, including young people, for example, from Sweden and Ireland. One sign of this diversity is that staff can choose between two canteens, one offering a more ‘anglo-saxon' approach to lunch (grab it quick) and one a more southern European experience (sit down and enjoy it). Signs for staff in the building are in both French and English. St Patrick's Day is celebrated by all, though admittedly mainly as an opportunity for fun and games on the call centre sales floor.
Companies such as Dell whose business is to supply computer hardware in bulk at relatively low costs have helped to transform the way we all work these days. But perhaps there's another message here for anyone who takes an interest in the future of work. Dell's centre in the south of France, with all its multi-ethnic mix, could be held up as a model of what a twenty-first century pan-European workplace will increasingly look like. And as Greeks there take calls from customers in Greece whilst Moroccans in Casablanca talk to customers in France, it's easy to argue that work relocation is already a significant development in the European, and the world, economy.