Selections from the GSC October 2011 Newsletter

Alison Owens, Associate Professor, Director, CQUniversity International Education Research Centre, Sydney

Australian Organisations Test Offshore Waters

The Australian economy continues to enjoy modest annual growth and unemployment of less than 5% against the economic trends of US and European slumped economies. In this context, however, it is almost impossible for organisations with large customer-facing service commitments to recruit and retain quality staff for contact centre work, traditionally considered low-value, temporary and non-career employment by Australians.

In the current market, an Australian agent will cost approximately AUD$8,500 per month with on-costs included, compared to a US agent at AUD$3,600 or a Filipino agent at AUD$1,900. For such reasons, Australian organisations are looking abroad for their contact centre talent and exploiting American experience and expertise in rolling out their offshore business solutions.

Over 70% of offshoring of contact centre work remains US or UK derived but Australian business is cautiously growing offshore delivery of business processes, both back and front of office. Given the costs of scarce onshore labour, there is a developing view that there is no alternative if Australian organisations are to remain competitive.

Recent research conducted in collaboration between CQUniversity Australia and Sykes Enterprises sought the views of C-level executive staff in a selection of Australian telecommunication, media-entertainment and financial services organisations on their offshore contact centre ventures. Cost savings of between 30% and 60% were reported by participant organisations but the benefits of offshoring contact centre work were considered far more comprehensive. The capacity to offshore after hours’ work of a 24/7 service is popular with domestic staff and can be spread across time zones to minimise the disruptions of shift work and expensive overtime payrolls. Indeed, Australian customer service has helped populate US managed contact centres in Manila which were empty over the day as American customers slept but Australians worked. Further to this, offshoring has provided Australian organisations with critical flexibility for seasonal spikes in demand precluding the hiring and firing scramble associated with short term, intense demands and delivering inexpert services.

Sending a business process offshore is a decision that needs careful consideration of cultural alignment and empathy, language proficiency, local infrastructure and labour market characteristics and trends, as well as consideration of which processes to migrate; well-defined, repeatable and robust tasks preferred. Offshoring such processes can actually improve quality metrics and also provide a powerful benchmarking activity for organisations that invest in adequate training, proper remuneration and customer care.

For a wide range of reasons, including high Australian tolerance for the US influenced Filipino accent, the strong customer service focus of Filipino culture and friendly time zone proximities, Australian organisations are finding the Philippines a successful offshore extension to their contact centre services.