More Australian call centre jobs heading offshore

More Australian call centre jobs heading offshore

News is filtering in that insurance Australia Group (IAG), the owners of brands such as NRMA, RACV, SGIC, SGIO, Lumley Insurance, Swann Insurance, WFI and CGU is starting to move their call centre jobs offshore. A Change.org petition started by a NRMA Call Centre agent claims that staff have been told that Australian call centre jobs will be heading offshore in January 2017. As at the time of publishing this article the petition has attracted over 10k signatures and based on number of the comments, IAG look sure to lose a number of customers as a result of the decision.

I have four policies with NRMA and have always thought that a distinguishing feature of the company was the fact that they maintained ONSHORE call centres. If this changes, so will I. David Macalpine, Australia

It wasn’t that long ago that rival insurance company Suncorp sent a number of their call centre jobs overseas so the revelation by the NRMA Call Centre agent that IAG are following suit shouldn’t really come as a surprise.

Peter Harmer
Peter Harmer, current CEO of Insurance Australia Group is leading the move to send Australian call centre jobs offshore.

In a press release on 19 August 2016 where IAG reported a FY16 profit of $1.18 billion the warning signs were clearly there:

“The company also outlined activities being undertaken to drive greater operational efficiencies that will reduce its cost base in ways that actively improve the customer experience.

This includes a technology simplification program which will reduce 32 policy and claims platforms down to two, the consolidation of its insurance licences from nine to two, and operational partnering with offshore-based global service suppliers to access their specific expertise and economies of scale.”

In the same press release IAG stated their new company structure has been designed around “enhancing the customer experience and leveraging new technologies”. I’m not sure if sending hundreds of call centre jobs offshore is the ideal way to enhance the customer experience. Profit, sure. Customer Experience? Not a chance.

An IAG spokeswoman said employees have been told the insurer needs to be more efficient for customers, but refused to put a number on potential job losses, saying it was “to early” to say.

“As part of this we will automate and outsource some of our processes and activities,” she said. “We’ve engaged specialist partners with local and global insurance experience to help with this and they are based off-shore. 

 

So when is the decision being made?

For customers and staff it looks like they are going to have to wait until January when IAG releases further details to find out how it will impact them. Peter Khoury, spokesman for NRMA Motoring, however has said the roadside operation’s call centre would not be moved overseas from western Sydney and Gosford. “Our call centres are not being off-shored,” he said.

Customer research has shown that 86% of customers are prepared to pay up to 25% more for a better customer experience, and even shareholders are prepared to accept a lower profit to support keeping jobs here:

I’m signing this because as a small shareholder, I would rather earn less money and keep Australians in jobs as well as ensuring greater security here than going off-shore. An Australian company, insuring Australians MUST be kept on Australian soil! Denise Fulton, Australia

The continuing trend in sending call centres offshore doesn’t look like its about to end anytime soon. With contact centre wages representing about 80% of the expenses of running a call centre, moving a call centre to a lower wages country can deliver significant savings. Moving a 500 seat call centre from Australia to the Philippines for example can save a company in excess of $20 million per year – a very tempting proposition. And if that wasn’t enough to rattle the Australian contact centre industry, self-service, Chatbots and the “automation of everything” is putting even more local jobs at risk.

Our local call centre industry has been the breeding ground/entry level position for hundreds of thousands of employees teaching them valuable work skills or like myself, its served as a great career in its own right [The 15 best things about working in a call centre] so to potentially losing this industry will hurt us in more ways than just the immediate job losses.  But its not all bad news. Some companies have tuned into the customer sentiment and have taken a stand – and actively promote their ‘Australian Based call centre’ as a point of difference.

 

bankwest contact us page
Bankwest Contact Us page proudly highlighting their Australian based call centre.

 

So the battle lines are being clearly drawn – move contact centres offshore to chase higher profits in the short term or focus on delivering a great customer experience to retain and build your customer base.  Perhaps its a touch altruistic or appealing to a sense of National pride but if the recent US Presidential election is anything to go by, protecting local jobs is a concern a lot of us share.

In IAG’s instance, by my rough numbers the move to send their call centres offshore would eat into their profit by a measly 1.69% reducing their profit from $1.18 billion to $1.16 billion but in the process putting hundreds of locals (and the associated impact to their families) out of work.  Is it really worth it?

Thankfully customers still have the ultimate power of which is the smarter strategy – choice.

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Justin Tippett
About Justin Tippett 78 Articles

I'm the founder of CX Group Australia - helping businesses and customer experience professionals to source, deliver and optimise customer experience solutions to drive business outcomes and I'm available for consulting and training services.


I'm also the person responsible for the terrible memes on the Call Centre Legends page😮


When I'm not working, I enjoy pretending that 40 something isn't that old and it's still not too late for a professional sporting career.

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