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India
is home to a large well-educated labor market.
The
effect of the Internet, combined with a push towards higher
value-add application, means that in many cases the average
agent’s job is becoming more complex.
Agents who used to place outbound calls are now asked
to manage and resolve complex customer queries and problems
and to call upon a fuller range of communication skills. In many cases involving technical help desk services, agents
need to have formal training in the sciences or engineering.
The same holds true for sales lead generation projects
involving high technology products or complex financial
services. As the
trend towards high value-add horizontal applications
progresses, highly skilled agents will become less the
exception and more the rule.
Indian
call centers have access to over 200 million English-speakers
and more importantly to a pool of 15 million Indian college
graduates a year. It
is not uncommon for a call center in India to have 100% of
agents holding graduate degrees.
Additionally, most Indians hold the call center
industry in high esteem; therefore, being a call center agent
is a respectable position.
Moreover, in a country where graduate unemployment
rates can reach as high as 20% in certain areas, Indian call
centers (unlike their American counterparts) have no problem
filling seats. It
is also important to note that Indian call centers are not
plagued with the same retention problem that western call
centers face. Indian
call center turnover rates hover at around 10% or less,
whereas American call centers can have turnover as high as
90%.
Moreover,
to support the needs of call centers, an auxiliary call center
training industry has arisen.
Companies such as Fonet work in conjunction with call
centers to educate potential and new agents about the ins and
outs of call center operations.
These centers are often very well equipped with the
latest call center technology, churning out classes of 10-20
agents every 3 months.
India
enjoys relatively lower labor costs compared to Western
countries.
Perhaps
more important than the large available and educated labor
pool is its relatively low cost.
Datamonitor research indicates that 67% of the costs
borne by call centers operating in the US can be directly
linked to labor. This
can reach as high as 72% when the center employs well-educated
agents in metropolitan areas.
The UK has a similar cost structure to the US, while
Canada spends about 62% on labor.
Any reduction in labor cost will have a massive effect
on overall expenditures.
In
addition, these labor cost are cyclical with the economy,
since they tend to escalate when unemployment decreases,
healthcare costs increase (in the US), and new technologies
emerge. In a
field with such high turnover, hiring and retention costs have
also increased over the past few years.
Indian call centers, by contrast, spend only 33-40% of
their budgets on labor. This
figure includes training and other incentives.
American
outsourcers pay an average of $2,084 per month for full-time
employees. The average cost per agent in India is $400 per month.
Outsourcers in the US must have to pay more than five
times as much, for often less dedicated and less well-educated
labor.
India
fits well into a follow-the-sun approach
The
costs of running a 24-hour operation can be quite high.
In order to attract late shift agents, call center
managers must offer added benefits such as high wages,
additional vacation time, and a casual work environment.
Advanced
call routing and networking technologies now allow companies
to pursue a follow-the-sun approach to call center operations.
This is where companies link two or more call centers
that are only open from 8-12 hours a day.
When one center closes for the night, all inquiries are
routed to another center in another part of the world.
India
is located four to five hours ahead of Western Europe and
10-13 hours ahead of North America, making it an ideal
location for companies wishing to pursue such a strategy.
In fact, currently the vast majority of Indian
outsourcers operate during the evening in order to handle the
load of European and American calls.
Companies
that already have web-enabled call centers should consider
India as a –cost-saving strategy
Having
a web-enabled call center already provides benefits such as
reduced phone inquiries and more productive agents.
As more people turn to the web as an alternate method
for customer service, call centers must train agents so they
have writing skills to complement their telephone expertise.
Rather than spending to train and hire agents, call
centers can outsource to India – India’s agents are
already armed with competent writing skills and at a fraction
of the salary that US and UK agents require.
In fact, Datamonitor estimates that savings of up to
40% can be obtained by outsourcing web contract media to India
rather than answering emails and web chats in-house.
The
Indian Government is acting to drive growth in the call center
industry
India’s
Prime Minister, Shri Atal Bihari Vajpayee, has established
significant initiatives to ensure India’s status as a
technology leader into the next millennium.
In a speech given earlier this year, he reaffirmed his
dedication to outsourcing technologies from India.
Among his initiatives, the task force he set up
enforces laws that allow duty-free import of capital goods.
Outsourcers investing in computers, switches and other
needs for a call center can bring goods into the country
without paying the normal 25-45% tax.
Similarly,
current tax rates for Indian-majority owned companies are up
to 30%, and outsourcers of technology and call centers are
allowed a full tax exemption on the export of their services.
The
government has also been responsible for the creation of
technology parks. These parks provide firms with low rental costs compared to
the West, though by Indian standards the $1-$3 per square foot
is expensive. While
the parks are probably most suitable for technology
outsourcers because of their IT infrastructure and ability to
provide companies with an easy way to access tax incentives,
technology parks are also located in suburbs that are rich
with well-educated labor.
The government’s dedication to ample and relatively
high-quality telecommunication lines in these parks provides
yet another benefit.
In
addition, the government is expected to repeal several
regulations that have been restrictive to Indian call centers
including:
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Restriction on multi-point to multi-point communications.
Currently in India call centers are only allowed to
engage in point to multi-point communications.
This means that even though a call center operation may
have several call centers networked together, an international
call must come in through one designated call center, then be
distributed from there into the network to the call center
that is most appropriate to handle the interaction.
The Indian government is expected to relax this
restriction within the next year.
The effect will be that international calls will be
directly routed to the appropriate call center upon hitting
India’s network, shortening the customer’s time to
service.
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Prohibition of simultaneous domestic and international
servicing. Indian
call centers cannot operate domestic and international
activity in the same call center. This restriction results from the disjoint between the
control of domestic and international telephony networks in
India. The
eventual privatization of the international network is
expected to lead to the repeal of this restriction.
Finally,
to address bandwidth issues, the government has initiated a
massive telephony infrastructure project that involves the
laying of fiber optics around the country.
The primary location of this project in the first phase
is within the country’s major technology hubs (e.g.
Bangalore, New Delhi). Once
that stage is completed, the company will work to connect
these hubs together. India is currently laying 230,000 kilometers of fiber optics.
More than 1000,000 additional kilometers are expected
to be added by the end of the year.
Source: DATAMONITOR
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