Talking Heads

In the same way that mail order catalogues are considered part of the fabric of the North of England, so are the growing number of call centres presumed to be based in the North-east.

The truth, however, is that London and the South-east are home to more than half the call centres in this country. In research conducted by Datamonitor, it was found that 58 per cent of call centres which responded to a survey were based in London or the South-east “rather against the conventional belief that call centres are a Northern phenomenon”, says the report.

Nevertheless, competition between the different UK and Irish regions to be seen as the call centre location of choice is strong. Not only that, the UK competes against locations across Europe for the increasing numbers of US companies which are setting up call centres to handle pan-European expansion.

And although commentators in the UK could be accused of bias, it does seem as if this country is winning the race. This year alone, both Air France and Delta Air Lines have centralised their pan-European reservations into call centres in the UK, more specifically London.

Datamonitor consultant Stephen Morrell says: “The UK is easily the largest call centre market in Europe. About 38 per cent of all call centres across Europe are located in the UK. This is followed by Germany with about 20 per cent and then France with about 15 per cent.”

Datamonitor predicts that by the end of this year there will be 12,600 call centres across Europe, rising to almost 19,000 by 2003.

The maturity of the UK market also means that it is not growing as fast as it was, and not as fast as some European countries. According to Morrell, call centre growth in the UK is now between 15 and 20 per cent a year – compared with Italy which is growing at about 80 per cent a year. “At a point in the not-too-distant future, growth will level out,” he says.

But the infrastructure in this country does make it an attractive option. Director of The Customer Contact Company Tony Collins adds: “We’ve been doing it for years here. We can get a call centre built, staffed and launched within four months – and that’s very appealing.”

The more liberal labour laws in the UK also give it the edge. According to Neil Perring, sales and marketing director at BPS Teleperformance: “We are in a league of our own – because of Margaret Thatcher. She ensured the opt out, which means there is less legislation, less red tape and lower labour costs. The general ability to take people on and lay them off is much more flexible here than in France or Germany.”

One country that the UK does have to compete against quite strongly, however, is Ireland. The efforts of the Irish government, in the guise of incentives and tax breaks to lure business there, has been paying off.

Eamonn O’Brien, president of international research and telemarketing agency International Marketing Solutions, says IMS reviewed 14 European Union locations before deciding on Dublin. London and Edinburgh were on the final shortlist of three.

Surprisingly, one of IMS’ needs is a multilingual facility, which O’Brien believes is easily fulfilled in Dublin. He says: “Ireland doesn’t have that many call centres, but it is good at attracting multilingual people. We found the linguistic skills were quite good among the young people here, but it is also easy to attract native speakers.”

Labour costs take up about 65 per cent of call centre overheads and O’Brien says the cost of hiring a Dutch or German speaker in Ireland is about 50 per cent the cost of hiring the same in either the Netherlands or Germany.

O’Brien says London lost out to Dublin because “although as a multi-lingual location London is stronger, we found the labour costs were too high and the staff turnover rates in London are tragic”. Edinburgh ran a very close second to London, but O’Brien claims it would have been more difficult to attract native language speakers to the city.

However, the attraction to Ireland is not shared by everyone.

BPS’s Perring says: “I hope they have done their homework and not just swallowed everything the Irish government has told them. I went to Ireland 18 months ago and there are call centres everywhere. There is no unemployment and my impression was that it was difficult to get multilingual people to work there.”

The Irish government is targeting Irish Americans either to invest, or in the case of those needing call centre facilities, to locate them in Ireland.

But Ireland is not the only region working hard to cash in on this rapidly expanding industry.

The North of England and Scotland are still considered to be the best for supplying a combination of labour resources and also, importantly for telephone work, good accents. Although London and the South-east scored highest in the Datamonitor research in terms of number of call centres, Scotland, the North-east and Yorkshire accounted for 21 per cent of large call centres (more than 100). First Direct and all the major mail order companies have based their call centres in Yorkshire, and, on the other side of the Pennines, Air Miles has just opened a second call centre in Warrington, adding to its first in Crawley.

Bradford Council has a particularly good reputation for developing an infrastructure that encourages businesses to set up their call centres in West Yorkshire.

The IMS Group, the UK’s largest automated call handler, has recently opened a £2m call centre in West Yorkshire. Tony Moss, marketing director of the IMS Group, says a major influencing factor was the effort made by Bradford Council. “We had huge support from the council, who are very influential in setting up schemes to create pools of ready trained telemarketing staff. The council was very energetic and handled recruitment advertising as well as conducting the first round of interviews for us.”

London is also working particularly hard at attracting call centre clients through inward investment agency London First centre. In May, London First launched a business taskforce to concentrate its efforts after attracting 11 major call centre operations during the previous year.

Sara Barclay-Hudson, director of customer care consultancy 7C, says: “London is the multilingual capital of the world. There is no other city in the world that provides such a wealth of highly intelligent, ambitious, long-term native speakers as London.”

7C was originally the pan-European customer care division of AT&T before a management buyout last year. Barclay-Hudson says that when AT&T was setting up the call centre in 1993, London was “without a shadow of a doubt” the best location for the people they needed to recruit. “AT&T had other locations in France and Germany, but soon consolidated all its call centre work in London,” she says.

Michael Charlton, managing director of London First, adds: “When Delta Airlines wanted to consolidate its call centres across Europe into one or two locations it was particularly interested in looking at densities of native linguists in London. It didn’t want people who had a second language, it wanted natives. Delta discovered that London was the ideal place for that. So, when people pick up the phone in Portugal to make a reservation, they come through to London and are routed automatically to a native Portuguese.

“Delta also looked at other costs like labour and space – and compared with Glasgow, Amsterdam and London, there was not a major disadvantage.”

But maybe location costs should not really be part of a customer service debate. As Collins of The Customer Contact Company says: “Forget locating call centres based on wages and space costs. This is outmoded. The most important thing is that the call centre should be aligned with the integrity of the client company.

“Your location needs must be based on the kind of person you want to staff your call centre. The Internet is going to start mopping up the basics of what call centres do. Increasingly, these centres will become quality contact centres.”

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