Hi everyone,

Following on from this topic which discussed recession and how it might impact us all, I felt it was time to resurrect the discussion.

Topical subject, I know, but now that we're six months past September 11th, and the world is picking itself up, I thought I'd see how the last six months of global uncertainty has affected you and your company.

Has the world's enforced optimism (adversity in the face of danger?) impacted your company in a positive or a negative way? Do you think things will improve, or degenerate?

John

PS. You might also wish to read:
    Seasonal Ebb and Flow of Call Center business?

Hi everyone.

It's now a year and a bit on from when I originally started this topic, though at that point the silence from you all was deafening (perhaps you were all digging in in preparation for the tough times ahead?).

Anyway, a short war in the Middle East later, and amidst signs of growing optimism in the financial sector, I wanted to resurrect this topic to see if your situation is on the up, and if things are looking better now than they were a year ago.

To start, I can certainly perceive an element of optimism within the industry, though it isn't plain sailing yet. Some of that optimism is doused by uncertainty, and many companies are now playing their cards far closer than before.

So, is your call centre thriving, or would you say we're still in the depths of recession?

Do you think things will improve in the next three months? What about the next six months or year?

John

Hello John,

I can only speak from a South African perspective and base my views on what I have heard and seen in the industry. Things seem to be turning around in South Africa. The economy seems to be improving with reduced tax rates, gasoline prices coming down and increased potential for international business. There is a buzz in the air about some really large corporates outsourcing their contact centres to South Africa. We are still awaiting final decisions on these matters, but they do look promising. It appears that as a result of the stability of our infrastructure, telecoms, education level and competitive costing we are becoming a more attractive option for international business. This can only improve the economy and reduce the unemployment rate. In addition our local telecoms company (Telkom)and the government in the form of the Department of Trade and Industry have also come to the party offering competitive and negotiable rates for companies looking to come to SA.

In saying that I still believe we have a lot to learn about the contact centre environment and often rely on the international expertise of others, including forums such as this one. Yet we strive to excel and absorb all the information we can to ensure that we are globally competitive. I have saw a companies logo that said "Local Access, Global Reach", and I think that we are achieving that.

Lets hope my optimism is not wrong.

Regards
Christopher Mills

Hi John,
I find this topic really good to discuss though it just not applies to our call center industry, but it’s in every business globally. As you have asked the members to put their views on the same, I would like to share some of my views on the topic and am sorry if you feel I am going a little off track. Well according to me I feel that the situation that we are going through right now is much better than what it was after Sep 11th. And it is expected that the economy will grow and will be much more progressive in the forthcoming years if we don’t face any political drama’s leading to short time wars that really destabilizes the economy globally. Automatically then we will be out of the much stressed recession scene of now!

I see that the post condition of this world after all those tremble waves in the past two years has given the corporations an option of discovering the third world and developing countries talent that is cheap and really worth. In my view the people from the developed countries had never faced this trouble for a long time if the option of developing nations were not discovered. Jobs were not at all sufficient in these countries. Now these nations are coming up many betters in providing with the jobs, which are mostly outsource or related to international market. And so the recession is moving towards the western part. As in this age of communication there are no boundaries and only the fittest will survive. Also the number of people in these developing countries are now been educated and technically skilled and at par with the global learning. And when anyone will get the cheap labor, why they would pay more for the near same quality, unless some law bound them. So anyway in India, the condition is improving though there is an uncertainty but still hopes are there  and so Government is also taking the full advantage of the time by reducing the tax rates for the business that is related to IT. As because this is the only fastest way this largest software exporter have with skilled and talented people to improve its economy. And so is the condition with other developing nations, I guess!

There was a time around a year back when the lay-offs were at the peak in most of the industries. At that time people were just keeping an optimistic view that soon the situation will improve (optimism) and it does. As you can see today the openings are coming out again though not as much as they were before Sep 11th, but yes the condition is improving and that’s what actually matters. And you are right John that “many companies are now playing their cards far closer than before.” Because they have to as even if we are optimistic there are some uncertainties, due to global political scene that directly affect the economy, that a player has to keep in mind so that instead of losing the full game he can withdraw at a minimum loss. Take an example of a latest scene of recession in call center industry in USA, some of the states are trying to pass a resolution that will abandon the outsourcing and who knows that tomorrow whole country will move on the same steps. Offshore company invest a huge amount in putting up a center, and that investment is useless if they don’t have a international client so just by keeping an optimistic view they cant survive, they need business. So they have to play safe while recruiting, now a days everyone wants to employ less. What USA based call centers are facing today will be the scene of many countries tomorrow as they are in recession because their jobs have been outsourced. Business is limited due to poor economy and communication is so better that the number of people available for doing the same job is now countable just not from one country but from the whole world. Blaming the management of the companies who are outsourcing is also not right, as they need to stand and save as much they can to make up their revenue inflow better. Afterall, that’s the final aim of private corporate. So finally there is not a visible solution for this problem. The only thing, which is handy over here, is to keep an optimistic view that the situation will improve, the business will improve while playing the safe game!

So my conclusion right now is that the condition in developing nations is much better than from anytime back in the past and it will improve in the next coming year/ years. Though the inflation rate is going high according to surveys, I guess the inflow will improve accordingly (again optimistic:)). And about the developed nations its like the business is going to flourish if there is a political stability and the jobs will be available may be nearly twice the number they are today in about two years time. May be not in the service industry, unless and until a law would be passed to maintain the equilibrium and restrict the recession. I think instead of completely banning the outsourcing, they should put a limit so that everyone would be happy! And world grows at a greater pace with cooperation and mutual understandings.
Thanks,
Tarun

John -

A couple of observations on my part regarding the recession issue. As you know, we work with a number of call centers here in the US and a few abroad. The effects of the recession still linger, but not all of them are necessarily negative.

1. Technology - three to five years ago, most call centers were tripping over themselves to buy really, really cool software and hardware, at really, really over-inflated prices. As their advisor, my job was to help determine whether a product was even necessary, develop an ROI model, assist with vendor selection, price negotiation and implementation. Some clients were so eager to spend their money, though, that I could barely contain them. It was a frenzy to spend, with no thought toward good business process.

Today, however, call center companies are back to the basics when it comes to technology spending. Hard lessons were learned, and the companies that are still in business are the better for it. After about a two-year freeze in spending anything, they are starting to thaw out the pocketbooks, and they are willing to make good business decisions (sometimes that means they buy nothing, and that's fine). While this isn't necessarily good news for Slick the CRM Salesguy, it's good news overall.

2. Outsourcing - The recession has caused a number of businesses to consider changing their outsource vendor to an offshore or nearshore solution. I think the topic has been covered quite well in other strings, but suffice to say that companies are making poor business decisions based on a single factor: price. Price is a major factor, but should not be the only factor. The frenzy that we saw in *spending* money five years ago has evolved into a desperation on the part of many companies to "save" money.

The good news is that the need for cost savings has forced companies that do not have call center expertise as a core competency, to begin to learn more about this end of the business. The smart ones, anyway. This can only be good for the industry, as C-level people in the organization begin to recognize the importance of their customer contacts centers.

3. Operations and Training - good news, bad news here as well. As is the trend in most call center organizations, when the budget needs to be cut, ops and training are the first stops. The ops guys are told to shave some handling time, and cancel/reduce off-line paid time. Training is simply put on hold, or cut. "See?", says the guy in the tie. "It's not hard running a call center."

Doesn't work, does it? Turnover goes up (even in a recession), quality goes down, and the straight-line math doesn't jive. Here comes the good part, though: call centers have had to learn to take care of costs *and* their people. Force-fed, perhaps. But they've had to learn it. C-level folks now have a better respect for HR/training value, agents are more aware of the impact of their non-productive time, and we now have more trainers who can put together a business case for their programs.

As for our business, this will be our best year in the six we've been in business, and that's just on projects we've already closed. Even during the past two years, we've not had a decline in business, we've just been hired to do different things than when people were flush with cash. Call centers are beginning to spend money again - they're just spending it more intelligently.

What we have left in the call center business, I think, are veterans, survivors. They (we) have ridden the big wave, made mistakes and had to learn some things the hard way, or move on. The product of this is that the businesses and people that remain are better for having been thru a recession, and will only serve to create a more intelligent business community.

Brent