Poll favours local call centres over offshore operators

Budget Direct invests $20 million in two new contact centres

Car insurance provider, Budget Direct, today released a poll showing 84 percent of Australians prefer the insurer's contact centres to be located here as callers do not like dealing with offshore operators.

Budget Direct's director of contact centre operations, Gerry O'Shaughnessy, said the findings confirm the company's experience that customers want to be able to speak to contact centre agents that can demonstrate a level of local knowledge when handling customer enquiries.

"Customers want to deal with people that drive the same types of cars and deal with the same types of conditions that they encounter on a daily basis, and struggling with the semantics of a language can be frustrating when consumers need information about a product," he said.

The Budget Direct poll surveyed 4,389 respondents across Australia.

The call centry industry is a significant employer in Australia with statistics from the Department of Employment and Workplace Relations (DEWR) showing job growth in the sector increasing 11.2 percent in the past five years.

Since launching in 1999 all of Budget Direct's contact centre operations have been based exclusively in Australia. Overall, the Australian contact centre industry is estimated to comprise 1,750 firms representing 3,850 contact centres.

The company recently invested $20 million in the establishment of two new contact centres in Queensland.

O'Shaughnessy said customers are a company's greatest asset so it is not worth risking that relationship in a bid to achieve savings.

His comments support a Compass Management Consulting study released earlier this year which found the cost benefits of offshoring call centres dwindled over three years.

The study, which covered more than 50 call centres, found it was better to stay onshore and run improvement programs.

Analysis of onshore and offshore environments revealed that increases of up to 15 percent a year in staff costs in countries such as India were reducing the price advantages of offshore call centres.

Simon Scarrott, head of business development and marketing at Compass, said in too many cases, service quality is being compromised by an offshoring decision that fails to deliver the level of savings anticipated.

The research found that language difficulties could also lower productivity. Failures in listening or understanding customers affected 18 percent of calls to offshore centres, compared with 4 percent of calls to onshore facilities.

A major driver for companies to move call centres offshore is high staff turnover in Australia.

callcentres.net, director, Dr Catriona Wallace, said contact centres in 2007 are more acutely feeling the strain of training, managing and retaining good staff. This in turn is placing pressure on wages.

Wallace 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.

"High turnover is a major concern, given an agent costs an average of $19,000 to replace," she added.

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