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An article relating to this blog post on Finextra:

HSBC creates 250 call centre jobs

UK banking group HSBC is creating 250 call centre jobs over the next two years at its operations in Newport, Wales, but will outsource work currently handled by the unit to outside firms.

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HSBC creates 250 UK call centre jobs as offshore declines

After a week off sick there's been a lot to blog on.

I was interested in the Finextra story "HSBC creates 250 call centre jobs". The interesting thing for me is that these are onshore jobs. HSBC has always had onshore operations but has also been one of the firms that has pushed call centre jobs to India. The onshore operations have tended to focus on high quality customer service (see past posts like: "The contact centre agent experience - First Direct") whereas it's always been my suspicion that cost is the primary motivation for the Indian operation.

I'm not against either cost saving or offshore, I just have strong reservations that India for lowest possible cost is a sensible customer service strategy. If offshore is an appropriate option, I've tended to look at South Africa ("Offshore - why I would go for South Africa over India"). I know there are issues with South Africa as well (SA Telecom and crime being two of the big ones), but the cost savings and availability of English are strong factors in that locations favour.

HSBC is also just part of a larger trend back onshore. Earlier this month Orange announced that it was moving 500 call centre jobs back to the UK from India, but at the same time was shedding 450 onshore administrative jobs. This is very similar to what Lloyds TSB did last month, when it decided to offshore its IT rather than its customer facing operations (I covered the story here on the blog or here on Finextra).

In short, I think the trend for customer service to go offshore has almost come to an end but administration, back-office and IT might all go offshore to a much greater extent.


Comments: (2)

Steve Ellis
Steve Ellis - Finextra Research - London 26 June, 2008, 07:44Be the first to give this comment the thumbs up 0 likes

It's an isolated consumer experience, rather than trendspotting but... I recently dealt with Admiral Insurance - the UK insurance company coincidentally mentioned in this article - I called late in the evening and got put through to a US-based call centre. I had a complicated, time consuming issue to resolve but it was a great 'consumer experience'. No language or understanding issues. The CSR exuded the best of US service culture.

Is the US considered a viable offshoring destination in these decisions? Presumably costs wouldn't compare to India (yet), but if service quality is an important factor...

Alex Noble
Alex Noble - McAfee - London 02 July, 2008, 16:16Be the first to give this comment the thumbs up 0 likes

Hi Steve,

I think that's a really intesting example and thank you for providing it. To me it highlights two things, firstly the importance of customer experience and secondly that labour cost is not the be all and end all of the contact centre business. A good experience means not only that you're likely to do business with them again (& they've saved on customer acquisition costs) but we're also writing about them and publicising it.

I think labour arbitrage is probably going to decline as a reason for offshore anyway. It's likely to be less atractive in dollar terms as the dollar weakens and India becomes more expensive but it also is now recognised as not addressing the problem in the first place. 

Interested to hear as well that Admiral are using a 'follow the sun' model for the contact centre, previously that's only been an option for the very largest firms.

Best wishes,



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