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n an economic downturn, inexpensive, capable labor becomes even more important. India has both and offers call center site selectors the added bonus of a workforce dedicated to making a career within the call center industry.
“India offers a workforce of highly-dedicated, well-educated, English-speaking professionals, and the infrastructure needed to deliver world-class customer care,” says Ron Schultz, president of Convergys Customer Management Group, a Cincinnati, Oh. -based outsourcing group. Convergys opened its first customer contact center in India. The 1,900-seat facility is located in Gurgaon, a suburb of New Delhi. The new Convergys facility is strategically located neat other multi-national facilities, including operations run by Coca-Cola, Nestle, Motorola, and GE. Besides its workforce attributes, India gives foreign investors the additional advantage of an affordable location.
“You save considerably setting up an operation in India,” says Keith Fiveson, managing director of IT Enabled Services Alliance (www.itesalliance.com), a New York-based consulting firm that helps foreign investors set up sites in India. “Generally, you can save anywhere from 30 to 50 percent on administrative costs setting up an operation in India.”
India intends to be a major player in the call center arena, as indicated by the current construction of a telecommunications network. Restrictions have been removed for foreign direct investment into business-to-business e-commerce and telecom and teleservices.
“Up until a year ago, in order to do any business in India, you could not have a 100-percent stake in your investment,” notes Fiveson. “You had to have a 49 percent stake with an Indian firm.”
Many foreign firms are also partnering with Indian companies to set up centers, among them firms such as The Godrej Group and The Hiranandani Group. The latter firm, a construction giant, launched call centers at Powai in Mumbai for automobile export firms.
“With the awareness increasing for greater customer service, the demand for call centers is bound to grow,” notes Priya Hiranandani, a director with his namesake group.
Fiveson also notes the Indian government is offering incentives for call center jobs, approximately $1,000 per job per year. While that doesn’t sound like an enormous amount of money, it amounts to a substantial sum in a country where most call center employees only make $3,000 per year. Fiveson notes that the supply of highly educated workers and a low demand creates these low wages, but he hastens to add that this is not subsistence pay.
Supply-and-Demand Economics
“It is not because they are treating people badly. It is due to supply and demand economics,” he says. “You’re talking about a country where you can feed a family of four for about $5 to $10 dollars a day.”
The Indian government has also established tax-free zones. These areas allow foreign firms setting up new locations to bring into the country without penalty goods such as computers and furniture. Local Indian governments are also helping establish technology parks near areas such as Goha, with telecom infrastructure in place.
Mumbai, formerly known as Bombay and within the Indian province of Maharashtra, has been the site of numerous major back office investments. U.S. companies such as GE Capital, Dell Computers, Oracle and Citicorp have located in the area. Some of these firms have retained outsource partners, while others are maintained by the companies themselves.
“We want American companies to know they are welcome additions to our broad-based economy,” says Vilasrao Deshmukh, Chief Minister of the province. “Maharashtra is determined to create a knowledge-based economy.”
India also offers firms a huge pool of well-educated workers without preconceived notions about working in a call center. Companies have discovered Indian employees do not associate working within the call center industry with a negative stigma and are committed to building a career within the business. The salary costs for skilled workers are among the lowest in the world, and it is not uncommon to find supervisors with advanced degrees.
“This is still one of the largest English-speaking populations in the world,” notes Fiveson. “The quality and ethic of the workforce is much higher and you have a six day work week here.”
Call center service providers are also offering American English courses to their employees, to allow them to be more familiar with American terminology. Service providers are also aware of quality issues and many offer certification programs to their employees.
“You will see in India more certification than nearly anywhere else in the world and more adherence to call center practice standards,” adds Fiveson.
Many firms have begun to expand into some of India’s second tier cities such as Aurangabad and Pune.
“This second tier of Indian cities is the future,” says Dennis Smith, president of PacTac advisors, a call center consulting group located in New York. “These operations do not need to be in major cities, any more than they are in the major cities in America.”
World Bank, headquartered in Washington D.C., announced it will establish a call center in Chennai. The new facility represents World Bank’s effort to put its operations where its money is so to speak, as World Bank has been investing in infrastructure and development assistance within India. The 27,000-sq.-ft. (2,508-sq.-m.) site will house 200 employees. The new facility will handle desk support of the bank’s budget policies and processes. New Jersey-based TCG Software is in discussion with various U.S. companies to set up centers in Hyderabad and Delhi. The firm currently operates four centers in Calcutta, Delhi, Mumbai and Hyderabad. The new facilities will be expansions at some of these sites. Company officials expect to double their current staff of 400 workers.
