Why do Australian call centre jobs go offshore?
The simple answer is cost. Salaries account for approximately 80% of the running costs for a contact centre so anywhere you can find cheaper labour is going to have a big overall impact on your costs.
The minimum award salary for a full time contact centre agent (working 38 hours) in Australia with no penalty rates is $39, 934* (if you can find anyone willing to work for it but that’s another story!) compared to the average $5,148 a customer service agent working up to 47 hours including penalty rates in the Phillipines would receive*. Just based on a 30 seat contact centre that’s an annual saving of over $1 Million for every year of operations.
When you consider the average cost to outsource one call centre agent in Australia is around $100k then the gap is even wider.
So whilst the Finance Manager/CFO takes great delight in moving the contact centre offshore, not all customers love the Phillipines experience. In fact by law all mid to large size contact centres must have a doctor or nurse on site in part due to the acoustic shock injuries caused by screaming customers.
Offshore options for Australian businesses also now extend beyond the Phillipines with South Africa, Malaysia and Fiji all investing significantly in the call centre industry and providing another cheap alternative for contact centre labour.
In an age where the world seems to get smaller by the minute and products can be sourced from all over the world, progressive organisations are starting to realise that customer experience, not the product, is their key differentiator in the marketplace.
Over the past few years Telstra has moved thousands of their call centre roles to the Phillipines and based on my experience talking to Telstra customers, its an experience that is largely not enjoyable. Vodafone have taken a different approach, recently opening their state of the art contact centre in Hobart and after significantly investing in local (Australian based) contact centres, they have reduced of complaints raised to the Telecommunications Industry Ombudsman by over 65% over the last 2.5 years.
Vodafone’s General Manager for Customer Care Matt Paterson said in August 2014 Australian-based customer service sets us apart from our competitors. Were putting service ahead of profits thats what our customers want. They want to be able to speak to an Australian, and they want to help create jobs in Australia. Thats important to us too. To perhaps further illustrate the point, both Telstra and Optus who both heavily use offshore call centres, have nearly twice as many complaints escalated to the TIO as Vodafone.
Of course the decision to keep jobs in Australia or move them offshore is not as simplistic as looking just at salaries. Additional training, travel and high turnover mean a Philippines centre is more likely to be approximately 60% cheaper than an Australian one.
And those costs ignore the elephant in the room, the impact having a poor customer experience ultimately costs the organisation. But with 60% savings and a lag before any real negative customer feedback hits (making it potentially the next CEO or CFO’s problem) there are still significant savings that can be realised immediately to satisfy shareholders and thats why offshoring companies look set to continue to grow in the short term.
The big challenge for Australian businesses is to determine if they can afford to give customers what that want – a local customer experience or a cheaper product. A number of Australian organisations are now proudly advertising their Australian call centre as a point of difference.
Commonwealth Bank and Budget Direct are two examples that proudly promote their “Australian based contact centre” as a point of difference to their competitors. The local contact centre outsourcing industry in Australia is also more buoyant than its been in a number of years so its clear that for some organisations, there is a direct correlation in giving the customers what they want and the resulting increase in profit.
And spare a thought for the CEO or Customer Experience Manager – as well as onshore versus offshore debate you can also add to the mix the increasing preference to self serve, the ageing population in Australia, increased difficulty in finding quality recruits, Chat Bots, the continuing rising costs of overseas labour and the fluctuating Australian dollar (potentially reducing the effectiveness of offshore solutions) and you start to get a feel for some of the strategic customer experience challenges facing organisations today.
- *Contract Call Centre Award, Contact Customer contact officer 1, 1 July 2017
- **Based on an average salary of 16,000 PHP (Philippine Peso’s) per month
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- The real reason why Aussie call centre jobs are going overseas
- The real truth about working in the Australian call centre industry
- Call Centre Outsourcing guide