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Rediff.com  » Business » UK unions misused report to slam India

UK unions misused report to slam India

Last updated on: January 20, 2004 19:16 IST

BPO analyst Steve MorrellBritish call centre and business process outsourcing analyst Steve Morrell recently stirred up a hornet's nest.

His report comparing call centres in Indian and the United Kingdom became rather controversial.

UK unions jumped on certain parts of his report that suggested that Indian call centres were not as good as the ones in the UK.

Morrell, who is the principal analyst at ContactBabel, a research and analysis firm founded by him in 2000, says that his report was misused by the unions to slam Indian call centres.

In an interview with Priya Ganapati, Morrell reveals key differences between Indian and British call centres and offers insights on where one scores over the other.

Your call centre report has become rather controversial with British unions using it to prove their point that outsourcing to India is bad. How did the controversy develop?

Words like 'good' and 'bad' are irrelevant to this discussion as they're too simplistic.

This independent survey (which was not commissioned by the UK government as has been reported) was taken from 334 telephone interviews with British and Indian contact centre directors and managers, and is a quantitative assessment of each country's present contact centre performance.

I personally don't think outsourcing to India is 'good' or 'bad' -- all I am interested in doing in this report is moving away from the emotional responses that all sides in this debate seem to be giving, so we can move towards a statistical, objective view of what is really happening in both the countries' contact centre industries.

The current reality of the situation should not surprise anyone -- the Indian contact centre industry can currently offer massive cost savings, but as a whole still has a way to go before key metrics like first-call resolution and average call length match the UK.

There is no suggestion that this will always be the case.

Interested parties in both India and the UK have seized upon pieces of the report which suit their own views.

I would encourage readers to view the report's free summary themselves at www.contactbabel.com/indiareview.htm and make their own minds up.

Why do you think that the UK unions are so scared of outsourcing to India?

Quite simply, because the UK contact centre industry employs around 800,000 British workers. It is a vital piece of the British economy, and offshoring appears to a lot of people in Britain as something which has come from nowhere and could potentially cause a lot of job losses.

However, the UK industry grew by over 7 per cent last year, which created more jobs than went to India.

When announcements are made about offshoring, they can have a massive effect on regions which are already less financially stable than others.

The UK saw mass unemployment in the 1980s when a lot of manufacturing went abroad. Whole regions were economically devastated, and the call centre industry provided new hope.

There is feeling in some regions that offshoring contact centre work could have the same impact again -- there are a lot of people very worried about losing their job.

Patriotism is being used a weapon to stem outsourcing. British companies are being asked to be patriotic and not offshore. How effective has this been?

This is coming mostly from the unions. The UK government has a non-protectionist stance, which I think is wise -- the government is not there to stop businesses doing business.

In my opinion, the decision on whether companies continue to offshore contact centres is up to the UK consumer. The government is unwilling and/or unable to prevent companies going abroad, and businesses normally go where they make the most profits.

But if enough UK consumers complained or actually moved bank or insurer, then businesses' profits would drop and they could reconsider offshoring.

The really big questions are: 'Does the UK consumers really care about offshoring?' 'If so, are they just complaining or actually doing something about it?' 'If consumers have actually moved bank/insurer because of offshoring, is the amount of business lost enough to make the company reconsider offshoring?'

ContactBabel will be running a large-scale consumer survey over the next couple of months to find out the reality of what UK consumers are actually thinking and doing about offshoring.

We are only interested in finding out the truth of the situation, and avoiding the emotional aspects of offshoring.

What does your comparative study between Indian and British call centres on quality issues show?

Indian contact centre agents pick the phone up more than twice as quickly as UK agents. However, UK agents deal with 25 per cent more calls per hour, and resolve 17 per cent more calls first time.

Do you think that accent of the Indian agents is really such a huge problem for customers calling into the call centre or is this issue a little hyped?

This is something that always gets mentioned. Remember, that people in the UK have wildly different accents too -- someone from Aberdeen sounds totally different from someone in Cornwall, but generally, accents aren't normally that big a deal.

This report doesn't comment on problems with accent, but I am aware of a large amount of anecdotal evidence that suggests this can be a problem for both the Indian agent and the UK customer. I personally have spoken to Indian agents many times without either side having a problem with comprehension, but very occasionally I will speak with someone who has a very strong accent, or who cannot understand my own accent. The problem is, these relatively rare occasions do stick in people's minds.

How do you think that Indian call centres can steal a march over their counterparts in US or UK. Is it only about costs?

The majority of it is about cost -- Indian agents get paid one-eighth of the salary that UK agents receive.

However, the Indian industry is strongly placed to improve their quality dramatically -- investments in technology and staff facilities are very good in the main, and this will filter through.

I think it is very difficult to improve quickly when you are growing so explosively and your staff keep moving on so often, and this is an issue lots of Indian contact centres have to face. The average Indian agent in the survey stays only 11 months, compared to over three years for UK agents.

It is tough for call centre managers to build up a top-quality team with that sort of staff turnover happening.

Remember, three years ago, the Indian contact centre industry hardly existed, now it is a global player.

I don't think it is realistic to expect an industry to go from nothing to employing hundreds of thousands of people in that amount of time and manage to outperform established industries which have been going for 20 or 30 years, while still doing it for a fraction of the cost.

Our report is a snapshot of how things are today. I would expect in 12 months' time that the Indian contact centre industry would have taken the points onboard and will continue to improve, although the UK and the US industries are really trying to improve their own standards too.

The offshoring debate has really made a lot of UK contact centres take a hard look at themselves and try to improve.

In terms of employee retention, how do Indian call centres compare to their peers in UK?

Staff attrition rates are presently twice as high in India as they are in the UK. This may be caused by ambitious employees who (because they are working in flat-structured organisations where there are fewer opportunities to progress) move between call centres for small pay rises.

Also, the type of work that Indian call centres are doing can have an effect. High-pressure outbound telesales is a very difficult job to do for any amount of time -- most call centres doing this work tend to have high staff turnover rates.

Working at night and at unsocial times can also place a real strain on staff loyalty.

What are the key metrics on which Indian call centres score over the UK ones and where do they lose?

Obviously, cost is the really big advantage, although speed to answer is excellent too.

Indian call centres tend to have better facilities than older UK operations and agents receive slightly more training than UK agents.

The UK is still somewhat ahead on how the call is actually managed -- the time spent on the phone per call is less and customers have to call back fewer times.

It will be interesting to do this survey again next year and see how the industries have improved. The Indian survey respondents expect to double in size in 2004, so it looks like boom-time will continue for now.

I would like this report to be taken as an objective and neutral piece of information that all interested parties could learn from.

From the points of view of an Indian contact centre, it has a lot of data on what they are doing well and where there is room for improvement, which has got to be good from the perspective of giving clients and customers better service and safeguarding the industry's future.

I have been disappointed by commentators, both, in the UK and in India who have looked at only one side of the argument.

There is a big opportunity for businesses and consumers to build a dialogue to improve and expand service, profits and jobs in both India and the UK.