Are Government incentives for local call centres a waste of money?

Government incentives for local call centres are failing to make a difference

With jobs becoming an increasingly scarce commodity its not surprising that any government is keen to offer some incentives to companies promising more local jobs to Aussies.

Over the past few years, there have been several ‘deals’ that have been struck with local and offshore call centre companies all promising to deliver local call centre jobs.

We’ve reported several times about Vodafone’s commitment to Australian jobs and to their new centre in Tasmania as one shining example.

Current information, however, would suggest that the call centre only employs about 800 call centre agents which whilst it’s a decent size, it’s well short of the 1,500 jobs promised back in 2013 with a $4.3 million hand out as Matt Smith from the Sunday Tasmania has reported in his recent article.

Vodafone isn’t the first company though to promise lots and deliver little.

Lots of broken promises with call centre jobs failing to materialise

Back in 2014, it was announced by the then Premier of Victoria, Denis Napthine, that BPO Aegis was going to create an additional 550 jobs as Victoria becomes its Asia-Pacific Hub.

That too has failed to materialise with Aegis in early 2016 deciding to invest further in Malaysia. Their current operations are believed to be under 200 FTE in total and well short of the 550 new jobs promised.

Both governments in this instance are no longer in power and potentially millions of dollars in taxpayers money has gone down the drain with unfulfilled promises.

Should there be Government incentives for local call centres?

Now don’t get me wrong, I’m all for offering incentives to keep call centre jobs in Australia.

There is a range of industries that receive government support and incentives that employ far less than the estimated 250k that work in call centres in Australia.

So why not the call centre industry?

As well as the immediate benefits of local jobs (and salaries) remaining in the Australian economy, call centres are often the first job for many Australians providing them with valuable employment skills that translate well into any industry.

Governments from other countries are climbing over each other to get a slice of the contact centre industry that is believed to be valued in excess of $300 billion worldwide each year.

You don’t have to look far to realise how contact centres have transformed countries like the Philippines and South Africa and they are both aggressively targeting the call centre industry here to generate even more jobs.

No Government help has been forthcoming for struggling local call centre operators 

So while Government overseas are throwing money around to secure call centre jobs, our State and Federal governments appear to be completely ignorant to the issue and have so far failed to provide any coordinated focus or support in helping companies keep their call centre jobs in Australia.

Over the past few years, several local call centre outsourcing companies have gone into liquidation and thousands of call centre jobs have been ‘relocated’ offshore although there is currently no reliable data to suggest just how many.

Telstra alone has sent over 10,000 call centre jobs to the Philippines according to the Communications, Electrical and Plumbing Union (CEPU) and that number continues to increase.

From an economics perspective, you can’t begrudge companies for sending jobs offshore.

As we’ve explored in previous articles (Why do Australian call centre jobs go offshore?), with approximately 80% of a contact centre costs absorbed in labour, anywhere you can find cheaper labour is going to deliver significant cost savings.

And despite the threats of self-service and automated speech bots all apparently signalling the demise of the contact centre industry, things have never been more buoyant.

Companies are realising that customer service is the market differentiator and accordingly they are investing in their contact centre workforce and infrastructure to make sure it delivers.

And despite popular belief, not all contact centre investment is going offshore.

Several local companies are continuing to grow their Australian contact centre operations and even some of the global Outsourcers such as Teleperformance have recently opened up Australian operations to capitalise on companies wanting to deliver a local experience for their customers (editors note, add this to the failed list as Teleperformance exited Australia within 3 years of starting and the promised jobs also never materialised).

So should it just be left for market forces to determine the ongoing viability of the local contact centre industry or is it time for our Government to provide some well needed industry-wide support, structure and focus for companies wanting to keep call centre jobs in Australia?

With a united industry body in the Auscontact Association representing the entire call centre industry, there has never been a better time for the government to engage with our industry and together, develop a coordinated strategy to grow our industry rather than continue to throw taxpayer dollars at isolated companies that to date have not amounted to anything.

What are your thoughts?

Recommended further reading: Do customers really care about the call centre location?

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