It is estimated UK call centres will employ 640,000 people by 2005, yet they are under threat from competition in India and China. UK call centre employers must invest in their human capital if they are to compete. Jane King reports
There is mounting concern that UK call centres will not survive unless they invest heavily in their staff and strengthen their competitive position against overseas counterparts.
This is the message from industry commentators and two new call centre reports which highlight that overseas call centre operations in countries such as India and China can now offer better quality services at a lower cost than the UK.
The issue hit the headlines last month when HSBC's chief executive Sir Keith Whitson, said the quality of work in the company's processing centres in India was exceptionally high. He stopped short of saying that UK call centres were inferior, but the inference was clear.
There are currently 6,000 call centres in the UK employing almost 500,000 people - 1.7 per cent of the working population - and the number of positions is expected to increase to 640,000 by 2005.
Business consultancy practice Accenture estimates that 20 per cent of these jobs will be transferred to India by 2010, because it offers a cheaper and more effective service.
The preferred choice
Call centre staff in India are reputed to be well-motivated graduates, who are enthusiastic about working in the industry, yet get paid a quarter of the UK's going rate.
Employers from the financial services sector, including Zurich, Royal & Sun Alliance, Bupa, Axa and Churchill, are keen to take advantage of these benefits, and have already committed to overseas call centres.
Zurich Financial Services signed up with an Indian operation earlier this year admitting that the quality and availability of a skilled workforce and a proven track record made it the preferred choice to provide a service to its UK customers.
It is not just call centres in Asia that are threatening UK jobs, however. UK costs for call centres serving customers in more than one country are also the highest in Europe, according to a report by communications consultancy Tarifica. It claims that UK call centre providers quote prices of 40 euros per hour for dedicated resources, while their European counterparts almost halve the cost.
"Labour is t