Canada to gain from U.S. call centre loss

Call centre numbers and agent positions in the United States will plunge over the next four years and Canada will benefit from some of that loss, according to a research report by market analysis firm Datamonitor.

According to the report, entitled The Vertical Guide to Contact Centres in North America to 2008, the U.S. will have 3,000 fewer call centres in 2008 than it does today.

Call centre agent positions in the U.S. will also suffer a hit. Mark Best, Datamonitor call centre analyst and author of the report, told IT World Canada that there are 2.86 million agent positions there today. By 2008, Datamonitor expects numbers will be 133,000 down on current levels — a total decrease of about 4.65 per cent, or a 0.9 per cent decrease compounded each year, Best said.

Meanwhile Canada, currently host to 4,500 call centres, will see its numbers increase by 800 between now and 2008. “The majority of growth in the Canadian market will be due to organic growth out of the market,” Best said, noting that most of Canada’s growth will still be in call centres serving domestic customers.

Other growth factors in Canada will include newly-built call centres and nearshore outsourcing from the U.S., the report added. Agent positions in Canada will see a 93,000 increase on today’s levels, which currently total 212,000, for a compound annual growth rate of 7.6 per cent, according to the study.

“Canada is a slightly less mature market than is the U.S. and [this growth rate] is in line with other slightly less mature call centre markets,” Best said.

Best emphasized that agent positions should not be confused with jobs. He said the term “agent position” actually refers to the terminal from which call centre agents make and/or receive telephone calls to internal or external customers. In call centres with different shifts, multiple agents might use the same agent position — so if two agents sit at that same desk on two different shifts, that’s two jobs but one agent position.

“It’s much more accurate to talk about agent positions than jobs, because at different times call centres might add or leave off capacity” according to how many calls are expected to come in, he said.

Best said the U.S. call centre job loss will occur for three main reasons. First, the majority of shrinkage is expected to result from both offshore and nearshore outsourcing. Some of the work will be nearshored to Canada, but other popular offshore destinations such as India, Mexico and the Philippines will also benefit from the loss, he said.

Second on the list is the increasing use of self-service technologies that allow callers to resolve their call automatically — for instance, a change of address call or balance inquiry — which improves agent productivity and means that call centres need to employ fewer people to handle the calls.

“These lower value calls tend to be outsourced,” Best pointed out. “It is not economical for a company in North America to service calls like a change of address or a balance inquiry because the turnover rate and wages are high. That’s why this type of work is sent offshore.”

Canadian companies are also jumping on board the self-service bandwagon — but one firm says it is doing it to increase efficiency and customer satisfaction, rather than cut jobs.

Nine months ago The Shopping Channel, a Mississauga, Ont.-based broadcast retailer, implemented a customized automated voice recognition ordering system nicknamed Susan. The system was built from scratch by Dallas-based Intervoice Inc., which embeds speech recognition, voice authentication, and text-to-speech software components from Nuance, a voice recognition vendor in Menlo Park, Calif.

According to the Shopping Channel’s vice-president of customer service, Graham Kingma, the retailer implemented Susan in order to give customers more ordering options and help deal with the flood of calls when a really popular item is being sold.

“We have extremely volatile call volumes, and it all depends on what (product) is on air,” Kingma said. “There are times that there is an extremely high demand for a product, and we don’t have the staff to answer (the incoming calls). So we established an automated way where customers could order items quickly. It also reduces the on-hold and wait times for customers.”

When customers call in to order, they can still choose to speak to a live representative, or they can opt to use Susan, which prompts the customer for various bits of information. It asks the caller to select the item number, give their credit card number and decide on a method of delivery. At the end of the call the order is placed and if the customer has provided their e-mail address, Susan e-mails them a secondary confirmation indicating that the order has been placed, he said.

On an average day, The Shopping Channel receives 10,000 calls and Susan is now handling 20,000 orders a month. Kingma said the system has “significantly reduced” the wait time for customers to order products, thereby enhancing their experience.

“If a customer is waiting on hold for live representative there is always the option to order with Susan….It can also be of some advantage to actually getting the product before it’s sold out — the system can help you get in (and) order the product quicker when the hot products are there,” he said.

As customers have gotten used to the technology over the last few months, The Shopping Channel has seen a steady increase in orders being taken by Susan, he added. That’s because “if the customer has had a successful experience, they are more apt to try it again.”

Despite the efficiencies gained, Kingma stressed that no call centre job losses have resulted from the implementation of Susan. “That was not the purpose of putting it in,” he said. “There is no replacing of customer care representative interaction. We are just enhancing our offering — it gives customers more options which can enhance the customer relationship overall.”

Montreal-based airline Jetsgo Inc. also recently implemented voice recognition technology to help handle repetitive calls regarding flight information, including status and changes, and to help increase customer satisfaction. The company hopes to eventually offer flight booking through voice recognition.

In a previous interview with IT World Canada, Michael Granshaw, Jetsgo’s vice-president of corporate planning and development, said 50 people manage his firm’s call centre operations and the airline receives 3,000 to 4,000 calls a day, depending on the season and what promotions are being offered.

After implementing voice recognition technology, the airline has experienced a 30 per cent reduction in calls coming in to live call centre agents on certain weeks, he said. Jetsgo has also seen a nine per cent improvement in service levels and a seven per cent reduction in the abandonment rate of calls.

“What’s happening there is that many calls are now being managed automatically, which means much better service levels internally (when we’re) resolving customers issues outside of flight information,” Granshaw said.

Although self-service technologies are making call centres much more efficient, Best said Canadian call centres need not worry about extensive position loss due to automation.

“The (number of) agent positions lost to self service technology is not the majority of agent position losses,” he explained. “Whereas we do see [adoption of self-service technologies] a little bit in Canada as well, the technologies [are adopted] on a slightly smaller scale,” simply because Canadian call centres tend to be smaller than those in the U.S. “The efficiencies gained by those technologies are not as great (in Canada) as in large American call centres, and that doesn’t lead to as much loss of agent positions,” he said.

In addition, the rate of organic growth out of the Canadian call centre market and the rate of outsourcing call centre work from the U.S. to Canada will offset the number positions lots due to self-service technologies, he said.

The third reason for American call centre job loss is the federal Do Not Call List in the U.S., which Best said will do its part to help reduce telemarketing activities.

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