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Barclays set to join jobs exodus |
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Business
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Written by Peter Warren
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Tuesday, 02 May 2006 |
By Peter Warren and Michael Streeter
Bought and published by The London Evening Standard
BARCLAYS Bank looks set to be the next big institution to move its call centre operations overseas.
Up to 5,000 British re jobs could be affected in the planned transfer
of about half the bank's call centre activities in a move that reflects
a growing trend among UK firms to take advantage of lower salaries in
other countries.
The most likely destination for the outsourced Barclays call centre is
India although it is understood that South Africa may also have been
considered as an option.
A source said: 'Barclays is moving part of its call centre operations offshore and as many as 5,000 jobs could be involved.'
A spokeswoman for Barclays, which is headed by chief executive Matt
Barrett, denied such a plan was imminent. 'We have no precise plans at
this moment in time,' she said.
However, she refused to rule it out for the future. 'Offshoring is
something everyone is looking into at the moment. It is a very complex
issue,' she said.
British companies have been slower than their American counterparts to
take advantage of the lower costs that call centres in the developing
world can give. Fewer than 15% of Footsie companies have taken the
plunge so far, against 35% of leading US firms.
But this situation is now changing fast. With average salaries in
Indian centres about a tenth of those in Britain - around £1,200
against £12,000 - companies know they can make huge savings by
transferring centres and making use of modern telecoms links.
Some 50,000 British jobs have been transferred to Indian centres in the
past two years. The industry, which still employs nearly 600,000 people
in Britain, is expected to shed 100,000 more jobs in the next five
years.
The National Rail Enquiries service recently announced that it is moving 600 jobs abroad.
However, the transfer of call centre jobs to India, South Africa,
Eastern Europe or the Philippines could backfire on British companies.
Such moves are sparking concern in the Government and among bank
customers, who worry about security.
Trade and Industry Secretary Patricia Hewitt has ordered an independent
study of the phenomenon. The study starts in January and is expected to
last three months. Hewitt has said, however, that she believes concerns
that the UK call centre industry is in terminal decline are misplaced.
The issue is especially sensitive to the Government as the industry is
concentrated in low-wage areas that are Labour-voting heartlands.
Customers unhappy with offshore shift
THERE IS growing evidence of a consumer revolt against being forced to
talk to operators and call centre staff half way round the world.
In one recent survey some 60% of the public said they did not want call centres based abroad.
Even more strikingly, some nine out of 10 customers of financial
institutions said they would consider changing companies if their
organisation moved calls offshore.
There is evidence of declining call centre quality due to high staff
turnover - the attrition rate which it is claimed could be increasing
significantly in overseas centres.
A spokeswoman for Transversal, which produces technology for call
centres, said: 'In some Indian call centres we are seeing attrition
rates in the region of 30% - similar rates to those in the UK, but they
seem to be hitting those attrition rates earlier on in their
development.'
Mike Allen, of call centre research specialist Mitial, said: 'The
customer attitude to this is absolutely clear - they don't want it to
happen - and it is being ignored.'
Some 160,000 Indians already work in call centres and Deloitte expects
a further two million jobs will be created in the subcontinent within
five years.
UK customers have reported that staff at Indian call centres, despite
'cultural training', do not always appreciate the nuances of life in
British society, and have also experienced difficulty in understanding
some staff.
Allen said: 'We have seen the recruitment of the really high-quality
Asian staff tailing off. They are now recruiting poorer quality
applicants - which means that they will offer a poorer service.
'Our research indicates that there definitely is a diction problem with Indian call centre staff.'
There have now been reports of some American firms, including Dell and
Lehman Brothers, responding to customer demand and reversing the trend
by taking call centre jobs back to the US.
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