Contact center pricing and attrition levels worrying outsourcing providers globally

The proliferation of new contact center delivery locations globally has done little to allay fears of wide-spread price and attrition increases for outsourcing vendors. In its most recent strategic focus report, “Trends in Global Contact Center Outsourcing Pricing and Attrition”, 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.

UK, Netherlands among the most expensive onshore delivery locations; pricing pressure seen across domestic markets

Among the key domestic markets from where contact center outsourcing services are delivered, Datamonitor estimates that the UK, 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, mark-up 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 that 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 calibre 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.”

Among offshore markets, Canada remains the most expensive, while Colombia, Philippines and India remain low-cost

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, US 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.

Attrition a global problem with local flavors

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.

More information on the customer contact industry can be found at www.supportindustry.com