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Industry News

 

Contact-Center Pricing and Attrition Worries Outsourcing Providers

Friday June 27, 2008

 

London — June 19
The proliferation of new contact-center delivery locations globally has done little to allay fears of widespread price and attrition increases for outsourcing vendors.

In its new report, independent market analyst Datamonitor illustrates some of the key challenges facing outsourcers in key onshore/offshore delivery markets and highlights strategies that may be deployed to counter these problems.

In addition, “Trends in Global Contact Center Outsourcing Pricing and Attrition” presents a survey of contact-center outsourcing prices in a number of locations.
 
Among the key domestic markets from where contact-center outsourcing services are delivered, Datamonitor estimates that the U.K., the Netherlands and France rank among the most expensive in terms of fully loaded price per agent, per hour (including wages, benefits, telephony/technology, property, markup and other expenses).

However, Peter Ryan, head of contact-center outsourcing analysis at Datamonitor and author of the report, also notes that while these markets are among the most expensive in which to deal, there are several trends vendors may face when dealing across established onshore markets.
 
“It is clear that no matter whether in Western Europe or the USA, contact-center vendors are facing problems in terms of recruiting well-qualified contact-center agents. Many cite an inability to find contact-center agents of a high caliber and are frustrated at their unwillingness to stay in their role over an extended period of time. The result is an erosion of margin or higher costs being passed back to the client. Either way, the vendor’s competitive positioning is compromised.”
 
Canada Remains the Most Expensive Offshore Market
While most offshore markets have been positioned at a lower level than most domestic delivery locations, the same cannot be said for Canada. Ryan notes that with an ever-high Canadian dollar pushing up prices, U.S. outsourcers, long the mainstay of Canada’s contact-center industry, have decided to seek new delivery locations. These include traditional countries such as Mexico and the Philippines, as well as emerging locations, including Egypt, Malaysia and Colombia.
 
While contact center agent churn has been characteristic in all regions of the world, Datamonitor has noted several examples in which local issues have been pronounced. In India and Mexico, the presence of opportunities in other industries has been paramount in prospective contact-center agents choosing non-contact-center careers. However, in other markets, such as the Philippines, the presence of multiple contact-center vendors has led to bidding wars for contact-center agents and has resulted in their switching vendors at a rapid rate.
 
Datamonitor’s research clearly shows there is a correlation between keeping price points stable across delivery markets and low rates of agent churn.
 
According to Ryan, to retain staff and keep attrition a low as possible, contact-center vendors must be able to show their employees that, over the long term, they will be able to glean career opportunities, as opposed to simply being continually stuck on the telephone.

“This can be done by outlining a career path for contact-center agents at the outset of their recruitment and accentuated by frequent feedback sessions,” said Ryan. “In addition, providing wage rates that are fair and reflective of the market is also important, as well as benefits that will derive long-term value for the agent. By taking these steps and others, vendors will soon realize less agent churn and more price stability.”

For more info: http://www.datamonitor.com