How do you fix the brand 'Indian Call Centres'?
In 2013, Indian call centre companies employed a huge number of people to deal with their growth. However, the majority of these were in The Philippines. For the first time, Indian companies recruited more Filipinos than Indians. It's a staggering statistic considering the relative populations of the 2 countries. The fact is that Indian call centres are no longer a particularly attractive option for companies looking to outsource to a low cost country.
During the boom of offshoring in the early part of the 20th century, India ruled the offshore marketplace. During these days, huge queues of highly qualified, well-spoken Indian graduates wanted a career in the call centre industry due to its relatively high salaries and progressive career structures. However, India became a victim of its own success. With demand for agents outstripping supply, recruitment standards slipped and attrition soared as agents jumped ship for extra money. At the same time, India's economy was booming even outside of the call centre space and call centres were no longer such an attractive option for Indian graduates. Smaller countries across Asia, Latin America, Africa and Eastern Europe seized on this opportunity to grow their own offshore call centre industries with differing degrees of success.
The fact is that many of the clients of these Indian outsourcing companies made some pretty big mistakes. They underestimated the additional effort required to train overseas call centre agents compared with their domestic equivalents. They grew too big too fast with the wrong vendors. This led to a poor customer experience for the British or American consumer. Add on to this, there was a massive 'land-grab' in many industries in western countries who would use offshore telemarketing to achieve this. All of a sudden, British consumers were swamped with low quality telemarketing calls originating from India. These and other factors seriously tarnished the image of Indian call centres. The growing dissatisfaction led many companies to come up with an 'anywhere but India' strategy and this led to a boom in The Philippines.
The industry in India is now very different to what it once promised to be. Growth is negligible and during some periods, it has even contracted. Many call centres have gone bankrupt and many more have decided that their expansion plans should be outside of India. Increasingly, these call centre companies have moved into non-voice BPO work. However, despite the general perception that Indian call centres are bad, the companies I speak with who use the services of these companies give a very different opinion. The slowdown in growth has allowed Indian call centres to focus on the development of their staff. Added to this, the industry has reached a level of maturity meaning that Indian call centres have some of the most experienced and talented middle management in the world. Indian call centres are slightly cheaper than their Philippine equivalents but despite this, the industry in The Philippines continues to grow faster than India's. The Philippines too has experienced exactly the same issues as India. Its rapid growth led to high attrition, high wage inflation and rising costs of leasing real estate but this hasn't put off potential clients for its huge call centre industry. It just seems that India is unable to shake off its negative image.
I've recently been advising a client on its offshore strategy and at the beginning of August, they will be visiting Mumbai and Manila. None of the party have visited either India or The Philippines before and I look forward to hearing their feedback. If experience is anything to go by, their opinion of The Philippines will be far better than India. For 6 years, I was based in Manila and whenever a client visited India & The Philippines, they always chose The Philippines. The sheer number of clients I worked with over that time means that this wasn't just a coincidence. In contrast to the opinion of some, it is not simply a case of all call centres in India are bad and all call centres in The Philippines are good. It's far more complex than that. There are many good call centres in India who are performing very well for their clients.
So, how do you get companies looking at India for their call centres on a comparable level with those in The Philippines? Well, you need to copy what The Philippines has done. Let's not forget that The Philippines call centre industry grew after that of India and copied some of their ideas and improved on them. Firstly, it needs the Indian Government to get serious about kick-starting its industry. I am not convinced that this is a priority for them but given the competitive landscape they operate in, they need to be if they are ever to retake the offshore crown. They need to look at the model of The Philippines Roadmap. This was a public-private partnership which laid out the infrastructure (both physical and people) needed to develop the industry. One of the most important aspects for this was to grow the call centre industry outside of the key metropolitan areas. This meant that there needed to be suitable office space, telecommunications infrastructure and colleges who would produce high quality English speaking graduates. Real estate prices have boomed in India's key cities making them less attractive for call centres where margins are increasingly tight. Property prices have also boomed in Manila & Cebu but the lower-tiered cities in The Philippines are still cheap and their infrastructure has been improving. Secondly, the country needs to be 'tax-friendly' to outsourcing companies. The case involving Convergys and the Indian tax authorities has made international outsourcing companies very wary of India. In contrasts, The Philippines has basically allowed most call centre companies to operate on zero or very low corporation tax as long as they are creating jobs. It is therefore little surprise that outsourced vendors increasingly look to expand in The Philippines over India. There also needs to be further clampdowns on fraud. The number of cases of call centres involved in illegal or unethical activity is very low but it makes big news. The Philippines has enacted a law specifically around this which has dramatically improved the reputation of the country's outsourcing sector. More importantly, India needs to be open to suggestions from the people who run its own industry. Of course, this is easier to do in a smaller country like The Philippines but the industry there has proven that when it acts together, it can get laws changed which can help advance the country's industry.
The truth is that I don't see any of the changes I've mentioned happening in India and I see a slide where The Philippines will continue to grow its market share over India. Other countries too will also take part of India's share. It's just a shame as this doesn't reflect the quality of call centres which exist within India.