June 25, 2007 4:39 am

Offshore call centre benefits challenged

The advantages to banks and insurers of using offshore call centres are diminishing as wage costs rise in markets such as India, according to a new study.

Wage rises of up to 15 per cent a year are reducing the cost benefits of overseas centres, says the research by Compass Management Consulting. Compass, which looked at 50 call centres, also says poor service and language difficulties can lead to calls taking twice as long as in UK-based operations.

The consultants, which advise businesses in 35 countries on efficiency savings, say that shutting a UK call centre and shifting the work to India, for example, can deliver savings of up to 15 per cent in the short term.

But in the longer term, it says, the benefits are less significant, particularly in terms of longer call times for customers.

Studies carried out by Compass show that lapses in listening and understanding by offshore centre staff can result in calls lasting up to twice as long as calls in Europe.

Such failures occur in 18 per cent of calls to offshore centres against 4 per cent for calls into domestic centres in Europe and the US. One study which measured the performance of call centre operatives according to their average number of sales found that offshore centres made four sales per month compared with 10 per month made by UK, continental European or US call centre staff.

Simon Scarrott, head of business development and marketing at Compass, said banks and insurers should think carefully about what types of work could be offshored. “Routine queries on statements, for example, could be sent offshore while calls to open new accounts are handled onshore by more experienced, better trained staff with home language skills,” he said.

In recent months, Lloyds TSB, the UK’s biggest provider of current accounts, has moved calls back to the UK from a service centre in India.

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