Search JTA's historical archive dating back to 1923

Look Out, India: Jerusalem Fighting for Its Share of the Call Center Market

April 11, 2006
See Original Daily Bulletin From This Date

Pacing the floor of his cubicle, a young man in Jerusalem speaks into his headset to an American client named Brandy over 6,000 miles away and convinces her not to terminate her American Online membership. Around him, hundreds of other agents are hustling to find and keep clients at IDT Global Services, Israel’s largest call center. Some are working with disgruntled AOL clients seeking to end their membership, others are telemarketers selling subscriptions to the Wall Street Journal in Europe, arranging appointments to show apartment rentals in New Jersey, fund-raising for Jewish federations, or selling baseball tickets to Minnesota Twins games.

“It is one of the only places outside of the U.S. that you have this type of concentration of highly skilled native” speakers of American English, said Yoel Keren, 34, who immigrated to Israel from Oklahoma and works in the company’s AOL department. “That is the edge you cannot get that anywhere else.”

Investors in businesses in Jerusalem and city government officials are trying to find their niche in the multibillion-dollar international call center and outsourcing industry.

The city’s main selling point is its highly educated expatriate and immigrant population who share a native tongue and cultural affinity with their clients.

This is what sets Jerusalem apart from the call-center powerhouses of India and Ireland, according to industry executives here.

“We market ourselves as a boutique call center,” said Janine Kutliroff, CEO of IDT Global Services.

Another key selling point is that labor costs are roughly 40 percent to 60 percent cheaper in Israel than in North American and European cities, although the costs are more expensive than in India.

At IDT Global Services, most of the business is done is in English by workers from North America or England, but there are also departments that work entirely in German, French, Spanish and Dutch.

Meanwhile, the Jerusalem municipality is offering tax breaks for companies, and rent subsidies for new employees who move to the city.

The Israeli government, keen to bring down high unemployment rates in the capital city and in southern Israel, is also helping underwrite part of the hiring costs for companies establishing call centers and outsourcing.

“The real challenge now” is promoting Jerusalem to companies around the world, said Eli Kazhdan, a business consultant who has been in involved in promoting the outsourcing industry in Jerusalem.

IDT Global Services, the Jerusalem subsidiary of IDT, one of the largest telecom providers in the United States, opened in 2002 with 20 employees. It now has close to 1,000 workers, making it the largest call center in Jerusalem, and one of the city’s largest employers. The firm is also planning to open other locations in Israel.

Opening a call center in Jerusalem was the idea of IDT’s founder, Howard Jonas. Jonas, an observant Jew and Zionist, was dismayed by the level of unemployment in the city during a visit after the outbreak of the second intifada.

He soon opened the Jerusalem office, which has since become the headquarters of his other call centers in New Jersey, Mexico and Ireland.

“People feel comfortable with the environment, working within their own language and culture,” said Gary Heller, 29, who immigrated to Israel from South Africa and supervises a telemarketing team selling Wall Street Journal subscriptions.

Employees at IDT are drawn from all segments of society — students and those approaching retirement, religious and secular.

Weekly recruitment sessions often draw large crowds.

Employee retention, however, is a challenge. One factor in this is the hours — many employees must work evening or overnight hours. Also, some new immigrants take the firm’s telemarketing jobs out of necessity when they arrive in the country, and quit when they find employment more suited to their education and training.

A fervently Orthodox man who gave only his first name said his customer service job with one of IDT’s long distance phone providers has been one of the best jobs he has had since immigrating from the United States more than 25 years ago.

Natan, a father of six, had been unemployed for four years before taking the IDT job.

“Management understands the workers’ needs and make it easier for us,” said Natan, citing the bus fare to work provided by the company.

Michael Barnett, director of marketing for IDT Global Services, joked that the four floors of a shimmering office tower where the business is located is “Little America.”

It’s almost entirely an English-speaking work environment and there is even a barbecue on July 4, U.S. Independence Day, he said.

The company provides some American-style perks in the office building, including an indoor pool, gym and video games, the latter offered in a cafeteria that serves fresh salads, sushi and pizza. Recreating an American-style corporate structure, there are also clear advancement tracks and benefit packages.

There is also an intensive Hebrew-language course.

“It’s a soft landing for people who have made aliyah,” said Judy Lowy, director of recruitment for the company.

The company also offers outsourcing services to its clients, including legal and financial services, translation work and graphic art design.

Its legal services department, called Outside Counsel Solutions, occupies a hushed swath of rooms. There, American-trained lawyers, several of them trained at Ivy League schools, work on corporate transactions, regulatory and tax law as well as research for major law firms in the United States.

For its some 20 lawyers, immigrants from the United States, many of whom have not passed the Israeli bar, the work is a good fit. Meanwhile, their American clients get top work done at about one-third to half the cost.

“It’s like a virtual law firm,” said Joseph Shmidman, the CEO of Outside Counsel Solutions.

Shmidman recounts the pitch he gives potential clients.

“These are the same attorneys they would be working with in Los Angeles, New York or Chicago but because they got the crazy bug to make aliyah and live 6,000 miles away, they are going to cost much less,” he said.

Recommended from JTA