Outsourcing The Dirty Work

There was a very good article in the Guardian last week about Wonga. In case you've been on Mars the last couple of years, Wonga are a payday loan company which, according to who you listen to, has just spent £12m on advertising to make loan sharking look respectable, or so that decent people wouldn't have to go to loan sharks again. A payday loan is generally taken to be less than £500 for less that 30 days. If you have enough credit with your bank and manage your money with even a little sense, you will use your overdraft facility. Payday loans are for people who don't meet those criteria: low-paid, erratically-employed, bad with money or just downright irresponsible.

Personally, I think that the clearing banks - especially those owned in large part by the Government - should be made to extend short-term overdrafts to the low-paid for no charge. Compared to what they lose lending to dodgy Irish property companies and southern European governments, and to what they pay in fines and rebates for mis-selling, the lost interest on a few million quid for ten days is a mere trifle. But that's enough of that.

This is the bit that caught my eye: "The company offices are filled with around 60 mostly young employees, dressed down in internet startup style. There's a personal trainer, employed to take staff running in the park for twice-weekly fitness sessions. A senior team dealing with people who can't pay back their loans are in another basement room ("Don't ask me why Moira has got a Barbie on her desk") but there are a further 100 people in a callcentre in South Africa, charged with ringing people to urge them to repay their loans.Staff say this is a fun place to work. [The CEO's] has a starkly minimalist white office, with white leather sofas, without any papers (everything is digital) or really anything except a bottle of Evian, a bottle of Carex hand sanitising gel, and a huge print of Che Guevara."

The reason the call centre is in South Africa isn't because it's cheaper: there are cheap call centres all over the north of England and Scotland. It's because they want the dirty work done as far away from the shiny front offices as possible. If the sixty mostly young employees had to hear the one hundred debt chasers in action, it would not be a fun place to work for more than a week. It would be painfully obvious what the real work was, and who the customer really is. Wonga seem to be in a state of chronic hypocrisy about who borrows from them. 

I don't like outsourcing. It exports jobs and imports poverty in the form of low wages. It's a fact of business life, and it's not clear that Western economies have the capital to reconstruct China's manufacturing capability back home. Manufacturing may be a lost cause for that reason, but service jobs should be kept in the UK. Outsourcing your dirty work is doubly nasty.

I've had a couple of calls from agents looking for an analyst to work at payday loan companies: the Yanks have read the smoke signals and are setting up over here. I had to think for a night before I could get my personal feelings straight. I can't make a good living from selling to poor people. I'm comfortable fleecing the rich (I don't deal with the rich, but I would be if I was), but not the poor. Fleecing the poor is what governments make Revenue and Customs do, it's what the Welfare State does. Bad company.