Businesses warned to rethink outsourcing call centres

Australian businesses must consider the risks of outsourcing customer service staff to low-cost countries such as India, with two researchers arguing most businesses underestimate problems such as high staff turnover and disruption from domestic disturbances or terrorist attacks.

The two human resources researchers from Griffith University, Mohan Thite and Bob Russell, also say that Australian workers in the services industry are at risk of losing their jobs to offshore companies.

Thite and Russel claim in a new book that businesses must consider outsourcing customer service operations in several locations, or even abandon outsourcing altogether.

“Western companies need to understand the positives and negatives of outsourcing and off-shoring because if something goes wrong and they’ve got all their eggs in one basket, or one call centre, it can be devastating,” Thite said.

“For example, if their call centre is shut down because of domestic disturbances, such as a terrorist attack, then customers in Australia may suffer despite disaster recovery procedures in place. Companies need to ask, is this a risk worth taking in the long run?”

Most outsourced call centres are based in India, with the country accounting for 25% of global outsourced operations.

Call centres benefit from three million young graduates each year, most of whom are familiar with English and corporate practices in the west, and are eager to work in the IT industry.

But staff turnover in these Indian call centres is very high: between 40-100% in some centres, compared with an average staff turnover of 20% in Western turnover.

Low staff retention rates can often mean clients receive inconsistent customer services levels.

The researchers also say that Australian workers may be at risk of losing their jobs to Indian companies, as outsourcing moves from offering just customer service to professions such as accounting, multimedia and law.

“Unless Australians improve their skills in line with the demands of the knowledge economy, they will face intense competition on all fronts to keep their jobs,” Thite said.