Posted by : trraju on Nov 29, 2003 - 05:34 AM General

SCOTLAND'S call centres could see a "flood" of jobs shipped overseas in the next few years - but equally the industry could expand at a healthy pace, a major new report has claimed.
Dr Phil Taylor at the University of Stirling and Dr Peter Bain of the University of Strathclyde have spent the past 18 months studying call centres in Scotland and India. Their research, unveiled yesterday, identifies several big attractions in sending jobs overseas, but also unearths a slew of hidden costs that could discourage further "offshoring" of Scots work.

The authors highlight two key findings of their survey. Of the 22 Scottish call centre firms that have already transferred jobs to India, an unnerving 50 per cent expect to outsource further posts in the next two years. But 72 per cent of Scotland's 290 call centres also expect to increase their employment at home by 2006.

The authors conclude: "The trickle of companies abroad may become a flood, or the extent of outsourcing may remain relatively limited. Powerful forces are driving the trend offshore but, equally, there are countervailing factors inhibiting this migration."

Dr Taylor, who presented his research to the Call Centre Association annual convention in Edinburgh yesterday, told The Scotsman: "One of our most startling findings is that - contrary to the conventional wisdom - the call centre industry in Scotland is alive and well. Employment has risen by 10,000 in the past three years, and 34 more centres have opened than closed."

However, Dr Taylor added that "offshoring" jobs to India was a tempting option for many firms. The Asian giant offers labour cost savings of up to 80 per cent, with a ready availability of skills and a willingness among staff to work longer hours - factors that have driven Scottish Widows to export 50 jobs to India in a pilot project, and led Clydesdale Bank to consider similar plans.

Paul Darling, head of call centre supplier Avaya in Scotland, added that the industry "is going through one of its most challenging periods" in the face of competition from overseas.

But the Taylor-Bain report also argued that further offshoring of jobs could be muted by the rising costs of operating in India. It presented a long list of expenses that call centre firms are starting to discover.

These include the cost of improving workers' language and accents, the difficulties of controlling overseas operations from Scotland, India's frequent power outages, the high turnover of local staff and the rising trend in Indian wages.

And even if jobs continue to be created by Scottish firms in India, the report stressed this could go hand in hand with a rise in employment at home.

Dr Taylor said: "Profound doubts exist as to whether the Indian industry can cope with anything more than the most routinised and simplified elements of call centre work. That's notwithstanding their attempts at better training to handle more complex calls and tasks."

He suggested that all but the most basic call centre functions may remain in Scotland. He pointed to a large Scottish bank that is simultaneously expanding its operations at home and in India. And he noted that five of the 22 Scottish firms that are already outsourcing abroad have explicitly ruled out more transfers over the next two years. They include two of Scotland's largest employers.

There are growing signs the Indian call centre industry is "overheating", the report said. The experience of firms that have already moved jobs abroad, and their feedback to others in the industry, may prove pivotal in deciding whether further posts are transferred overseas. India is the most prominent location, but South Africa is also emerging as a hub for the industry.

Dr Taylor said: "It appears the contact centre industry is on a cusp ... Firms don't know whether to transfer jobs or not, because it is not clear that the benefits outweigh the disadvantages And the assumption cannot be made that [creating posts in India] will automatically lead to the devastation of Scottish jobs."