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Datamonitor Projects Drastic Decline in U.S. Call Center Operations
The majority of the call centers and agent positions will move to nearshore/offshore positions, but others will be lost due to increasing self-service options available to customers and DNC regulations.
Posted Sep 3, 2004
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More than 3,000 call centers will leave the United States by 2008, according to a new report from Datamonitor. The loss of call centers will result in the elimination of 130,000 agent positions, equaling some 175,000 to 200,000 jobs.

The majority of the call centers and agent positions will move to nearshore/offshore positions, but, according to Datamonitor technology analyst and report author Mark Best, others will be lost due to increasing self-service options available to customers and DNC regulations.

Best says the move to nearshore/offshore locations will continue despite promises by political candidates to stem the tide of jobs moving out of the U.S. The reason is simple economics: The typical U.S. call center agent earns $10 an hour, while his counterpart in India earns only $1.20 per hour. Additionally, U.S.-based call centers have higher turnovers--some as high as 100 percent annually--than many overseas locations. The turnover rate in Argentina, for example, is only 10 percent to 15 percent annually.

Lower turnover rates mean lower training expenses, as well as better customer service, Best says. "If you have a higher turnover rate, that means that more experienced senior agents spend more time training junior agents or answering the questions of junior agents," he explains. That time spent training or answering questions can't be devoted to customer service.

The call centers agent positions aren't all going to destinations like Argentina and India. According to the report, Canada is expected to sprout 800 new call centers by 2008, as well as growing its current centers, for an expected 93,000 agent positions in 2008.

Best also expects a continued trend in customer self-service to contribute to the loss of U.S. call center agent positions. Technologies that allow callers to resolve their concern online or via IVR (e.g., a change of address call or balance inquiry) improve agent productivity, and that mean call centers need to employ fewer people. When these "low-value" services are still handled by the call center agents, the calls often go out of the country. "Companies can't afford to handle these low-value calls in the U.S.," Best says.

The federal DNC list has curtailed telemarketing campaigns, striking off yet another of several tasks that would have been executed by the call center agent. Best says that the list will lead to the loss of 5,000 to 10,000 agent positions by 2008.

However, some call center agents are remaining employed in U.S. locations by shifting from lower-value duties, like answering questions about account balances, to added-value responsibilities like making sales. But those agents aren't just shifting to outbound sales calls, according to Best. There's an increasing propensity for these agents to handle inbound sales, as well as cross-selling during service calls.

Related articles:

Making the Right Call

As outsourcing options expand, companies are challenged to find the best mix of call center services.

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