• January 27, 2004
  • By David Myron, Editorial Director, CRM and Speech Technology magazines and SmartCustomerService.com

Report Debunks Outsourcing Exodus Concerns

Despite recent concerns over call center jobs moving offshore, a Datamonitor report maintains that those concerns are exaggerated. The report, "Global Offshore Call Center Outsourcing: Who will be the next India?" forecasts the number of offshore and nearshore agent positions in 22 countries. According to the report, the number of offshore and nearshore agents in 2002 represented a little more than 2 percent (88,000) of the 4.05 million worldwide agents. Datamonitor expects that percentage to only slightly increase to 5 percent (241,000 agents) of approximately 4.78 million overall agent positions worldwide by 2007. Overall agents include offshore, nearshore, domestically outsourced, and internal call center agents. Offshore and nearshore agents represent just a fraction of worldwide call center agents; the job-growth rate of offshore and nearshore agents is still fairly impressive--22 percent compounded annually from 2002 to 2007. This clearly outpaces the growth of domestic outsourcing positions, which is only expected to grow at a 5 percent compounded annually from 442,000 in 2002 to 576,000 in 2007. India and the Philippines are currently leading the offshore revolution, with roughly 70 percent of the market, says Ryan Powell, call center technology analyst with Datamonitor and author of the report. However, one of the biggest surprises of the report, according to Powell, is that percentage is expected to drop to 64 percent in 2007 as more companies are considering other regions for outsourcing. "The shift has moved away from selling the virtue of the specific country and has moved to being much smarter about selling the virtues of outsourcing," Powell says. Driving these global initiatives are increased efforts in follow-the-sun strategies and the ability to generate a local presence in many geographical areas. A follow-the-sun strategy, for a U.S. company, for example, allows the company to provide support around the clock for its U.S. customers at a much lower labor cost than domestically providing the same service. Additionally, he says that companies buying and selling outsourced call center services are getting "smarter about spreading the risk of operations and increasing their geographical footprints for local points of presence from service providers. So the service providers are looking to establish their presence globally." Which country stands to lose the most agents? "The U.S. is the biggest market in call centers and outsourced agents. So, theoretically, it could be the most impacted by the move to offshore outsourcing," Powell says.
CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues