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● Getting the right staff for call centres is becoming more important than building costs ● The growth in call-centre jobs has led to a rapid change in call-centre standards and requirements. They are no longer seen as being just sheds with offices in them ● There will be more consolidation between banks and insurance companies within the sector, and this could lead to fewer call centres |
As the old saying goes, what goes around comes around. After a spell in India, call centres are starting to return to the UK. In the past nine months, there have been several high-profile openings.
The number of staff employed by call centres is also increasing. A report published by Incomes Data Services last month found that most call-centre operators have increased staff numbers by 60%, and most of these expect to continue recruiting.
The picture today stands in contrast to 2000. Then there was an exodus of companies opting to offshore back-office operations in a bid to cut costs. Companies such as Railtrack and HSBC found they could save up to 50% of their costs by locating, primarily, to India, where language, former colonial education and the legal system are similar to the UK’s.
Companies claimed that offshoring was not losing jobs from the UK — it was just not creating them. Only last year, Knight Frank research estimated that, as a result of offshoring so far, around 10m sq ft of office space has been lost to overseas operations. It forecast that, in the next 10 years, the UK would lose another 50m sq ft. It was a time of genuine concern for many industries.
Forward to 2005, and the worm has turned. A GVA Grimley report in May, Offshore business process outsourcing, stated that “there is a small but growing body of evidence that UK companies have been disappointed with the outsourcing of work to India, many to the extent that offshore operations have been scaled back or even cancelled”. Alliance & Leicester, the Co-operative Bank, Nationwide and Royal Bank of Scotland are among those companies now vowing to keep call centre jobs in the UK.
While there has been a change in attitudes, offshoring to India, along with other locations such as eastern Europe, South Africa and most notably China, is still vibrant. After the US, the UK is still India’s second-largest user of offshoring facilities, totalling 20% of the country’s call-centre business. In addition, India’s workforce of IT professionals is expected to increase from around 1m today to around 3m by 2010.
Changing attitudes in the UK coincide with the nation’s call-sector sector finding a more secure niche. Companies are realising that operations that require either voice services or hi-tech procedures are best kept in the UK. And this is reflected in recent lettings.
James Weedon, partner in national office agency at Cushman & Wakefield Healey & Baker, points out: “Customers are voting with their feet. Where customer support is concerned, people don’t feel comfortable talking to people in India. This has started the backlash within companies using telesales, and a lot of banks and others are losing customers, resulting in some companies coming back to the UK.”
Patrick Going, executive director with developer Akeler, says his company is seeing strong demand for space from communications companies. Akeler is, for example, now building a 400,000 sq ft office for banker Northern Rock to house call-centre staff at its Rainton Bridge Business Park, outside Sunderland. “Services in the UK are of a higher standard, whereas in places such as India they can be more basic,” he says.
Getting the right staff is most important
Going says one of the attractions of building at Rainton is the availability of suitable workers. In fact, says Weedon, getting the right staff for call centres is becoming more important than building costs. “Some call centres operate from 6am to 10pm and rely on a staff of students and single mothers,” he says. “For instance, some firms are going to Newcastle because of its demographics. Property costs certainly have a part to play in where companies go, but the real driver is demographic.”
The North East, the Midlands and Scotland are all popular call-centre locations. As well as the Rainton Business Park, Sunderland is also home to Akeler’s 1m sq ft Doxford International Business Park. And Highbridge chose North Tyneside to develop its 2.25m sq ft Cobalt Park, which is already home to Orange, LS Trillium, Procter & Gamble and computer services firm EDS. Highbridge director Guy Marsden says the company has seen “tremendous take-up from very significant requirements in the North East.”
He adds: “We have had a recent enquiry from GE Capital looking for a further 150,000 sq ft. It is still very much focused on the UK because the UK can provide additional value.”
Going also cites Manchester as a place where there is “a good knowledge capital base and a good pool of people”, and Glasgow, where demographics are considered perfect for call centres that need highly skilled workers.
“We put communications firm NCR just outside Glasgow. It wanted to go to where graduates have bilingual skills and to a place that services the euro market. Glasgow proved to be the best location,” says Weedon.
Both O2 and Dell have taken 100,000 sq ft centres in Glasgow, which adds up to the highest level of activity in the sector for several years.
Customer service
Apart from the Dell and O2 deals, Royal Bank of Scotland-owned Direct Line has just taken 80,000 sq ft at 6 Atlantic Quay in Glasgow. “Customer service is at the heart of businesses such as Direct Line so, in terms of customer satisfaction, companies like those have been taking space in Glasgow because language is incredibly important,” says Craig Watson, partner in agency and development at Knight Frank in Glasgow.
Northern Ireland has also become a prime location for call centres. Prime minister Tony Blair last month announced that 600 jobs had been created there by, ironically, Indian IT company HCL.
With the rise in call-centre jobs has come the rise in call-centre standards and requirements. “Call centres are no longer sheds with offices in them,” says Akeler’s Going.
According to Marsden: “High value staff obviously want to work in better surroundings. Seven or eight years ago, call centres were in redundant industrial buildings, and people were hot-desking. Today, companies are using grade A office space because employees demand that they provide the right accommodation.”
Crèches, gyms, attractive architecture and landscaped surroundings have become part and parcel of today’s call centre.
While there is some grade A space being taken up, Jeremy Brooks, head of call centres with GVA Grimley, does not believe huge swaths of office space will be taken up for call centres. He believes instead that there will be more consolidation of companies within the sector, and says: “We have already seen mergers and acquisitions in the insurance sector, and this means that they will also be consolidating their call centres.”
