Economics and customer service sees offshoring losing some appeal

An interesting story appeared on NPR last week which was in keeping with an earlier post that I had written about the gradual return of call-center positions to North America which had previously been outsourced to overseas call centers. The story itself looks a broad cross-section of reasons as to why this trend is beginning to accelerate and while outsourcing is by no means coming to an end for IT positions and manufacturing it does seem that the evaluation of call-center offshoring is now happening more and more frequently.

Some of the reasons given in the article include simple economics; India for example has seen year-over-year double-digit inflation which in turn leads to higher salaries and naturally overheads. Costs that were extremely attractive a decade ago to a company looking to offshore are now providing a much smaller return in savings. The magic ingredient that is seeing some positions returning to North America seems to be the overall level of customer service. A recent poll (on the left) of more than 1500 adult consumers who had spoken with a contact center in the previous month shows a disparity in customer satisfaction or more specifically ease-of-use for the consumer. When comparing overseas call centers with US call centers those polled indicated they were twice as likely to speak to more than one representative, marginally less likely to have their inquiry resolved, and nearly 20% less likely to resolve the matter during the initial call if the person had spoken with a contact center that was overseas.

While these are not huge variations knowing that the most efficient call-center relies upon reducing the numbers of callbacks and the overall time spent on the phone. If an inquiry is not resolved during the first call, or takes numerous representatives to handle the matter the overheads continue to increase with each individual call and the length that calls take to complete. While many in the media have portrayed the barrier in service being language based/language skills I don’t subscribe to that. What this article suggests and what makes more sense is that having a call-center that operates in the same market or very similar market results in better understanding of needs and applications between the caller and the representative who is assisting them. The efforts of large companies to improve the customer service experience coupled with the closing margin of costs due to economic conditions is seeing more positions returning to the US and Canada in 2010. As I’ve written before companies have to evaluate the price or the cost of stellar customer service, it would seem that the desire for excellence in customer service will continue to fuel the return of call-center jobs that had previously been moved offshore.

I highly recommend visiting the website for the NPR story which also contains an audio feature on the topic.