By Gemma Simpson, 28 June 2007 14:36
NEWS
The UK's financial services (FS) companies are failing to save money and are undermining customer relationships by sending UK call centre jobs overseas, according to a recent study by consultancy Compass Management Consulting.
Onshore FS call centres average 10 sales per month while offshore centres have an average of four sales per month. And savings from lower labour costs are disappearing as rates rise in offshore locations, with staff costs increasing by up to 15 per cent per year in countries such as India, the study shows.
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Language difficulties can also lower productivity and lead to calls lasting up to twice as long as home-based operations.
Listening or understanding failures occur in an average of four per cent of calls in onshore call centres but for offshore call centres, the figure rises to 18 per cent - and each of these failures can lengthen the call by up to 105 per cent beyond the average due to misunderstandings and lack of clarity, the research reveals.
Simon Scarrott, head of business development and marketing at Compass, said pursuing the "latest management fad" of offshoring in a far-off country makes no business sense in the long term.
Despite the trend toward offshoring call centres, a recent report claims the UK call centre industry grew by six per cent last year and is now worth £20.6bn.
Comments
There are 7 comments. Join the discussion
1. Karen Challinor
two words
"short termism"
any plan longer than five years rarely gets a look in in most organisations
and when profits need to be maximised the plan is usually six monthe to a year and the quickest way to do this is reduce the head count and offshore
this gives short term profits and long term losses
and I've been saying this from the day the word offshoring was coined
at least with traditional outsourcing money had a chance of staying in the UK economy
2. Andy Eastham
My business is leaving Demon Internet (after 13 years) due to a recent fiasco a client of mine had with an Indian call centre. I had previously recommended Demon to them.
3. RupertG
Are you reading this earthlink?
4. Ian
I don't know where companies get the information from that the offshore call centres are a good thing. Ask the person in the street and they will tell you that they prefer UK call centres.
I don't deal with call centres that are offshore - I put the phone down and write. OK it takes longer but at least you get somewhere near a legible/tangible answer and less stress!
5. benjibober
I agree - quick buck plans are no good. Off shore call centres aren't either. And I always maintain they don't appreciate th avlue of the pound in our pockets.
6. Nick Cole
Exactly what this who though holistically about the issue said.
But of course the short sighted so-called business leaders always know best don't they? Always dismissing anything from anyone that isn't 100% behind their grand schemes.
And it isn't the cost of running the centres the centres that was important, which is all they thought about. It was the perception, understanding, empathy, customer goodwill, etc, that actually makes these systems 'work'. Ultimately if a customer's expectations are not fulfilled then the system is a white elephant and an expensive one at that!
These so-called intelligent business leaders, because they are kept in their ivory towers by the call centre staff and never allowed to dirty their ears with issues, fail to understand what keeps them in business and their wallets full - customers! It is cheaper to keep an existing customer than to get a new one.
7. John
If I get a call from an Offshore Call Centre now I just hang up.
I can't be bothered to keeps asking the caller to repeat themselves. When I finally understand what they are asking I usually have to repeat myself two or three time before they understand the answer.
It is just more hassle than it is worth.
I phoned Norwich Union to
"Quote Me Happy"
Got through to an offshore call centre and hung up half way through - I wasn't happy at all.