The local contact centre industry is struggling to retain staff and keep costs down, according to the 2007 Australian Contact Centre Industry Benchmarking Study.

The annual survey, which covers 156 organizations across 306 call centres, also found a decrease in outsourcing rates, a rise in the use of hosted services and a strong trend toward teleworking.

Overall, the Australian contact centre industry is estimated to comprise 1,750 firms representing 3,850 contact centres.

The survey found the contact centre industry is undergoing a period of considerable growth, the total number of seats having increased in size by 13 percent from 2006 to 2007, an increase on the 8 percent growth between 2005 and 2006.

However, the survey found this growth was also causing the industry significant challenges, particularly in human resources management.

callcentres.net, director, Dr Catriona Wallace, said contact centres in 2007 are more acutely feeling the strain of training, managing and retaining good staff.

Wallace said there is considerable competition for good staff, which is placing increasing pressure on wages.

She said the turnover rate of full-time agents grew from 16 percent in 2006 to 22 percent in 2007.

Turnover is considerably higher in contact centres with 50 or more seats, at 27 percent, and even higher in very large centres with over 100 agents, at 34 percent.

In addition, the mean base salary for a full-time agent rose by 6 percent from 2006 to 2007 to about $41,000. This combination of trends is having a noticeable effect on contact centres' bottom lines, the survey found.

"Labour represents a growing proportion of the running costs for a contact centre and now accounts for about 70 percent of total operational expenditure," Wallace said.

"High turnover is a major concern, given an agent costs an average of $19,000 to replace. The cumulative effect is that total costs are on the rise."

The trend in recent years towards outsourcing contact centre functions has made a surprising reversal, according to the 2007 survey.

In the 2004 and 2006 surveys, 20 percent of respondents said they outsourced some or all of their contact centre functionality; in the 2007 survey it was only 15 percent.

"Any growth in outsourcing appears to be coming from the growth of existing accounts rather than from new business. We are surprised at this result given the current HR and cost pressures," Wallace said.

"This finding is perhaps indicative of Australia's continued resistance to outsource and in particular to offshore service work."

Another interesting result of the study was the changing focus of contact centres from service only to service and sales.

"We see companies increasingly viewing their contact centres as revenue generators rather than pure cost centres," she said.