Trends in Global Contact Center Outsourcing Pricing and Attrition (Strategic Focus)

An overview of the ongoing shifts in global contact center outsourcing attrition trends, as well as an analysis of pricing and cost issues.

Report Highlights
Outsourced contact centers face considerable challenges from agent turnover, which results in lost profitability Agent related costs form the largest problem for outsourcers seeking to maintain margin, but challenges related to organic inflation and foreign exchange are also proving to be at issue for vendors of these services. Clients of outsourcers need to be conscious of the challenges that their vendor partners are facing in regard to escalating costs and agent churn, as it can lead to increased prices as well as quality erosion.
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Overview 1
Catalyst 1
Summary 1
Key Messages 2
Agent attrition and price increases are becoming more interdependent 2
Attrition is hurting contact centers globally 2
Outsourced pricing is being impacted by operational and exogenous factors 2
Agent attrition and cost rises have the potential to hurt outsourcing business 2
3
Table of figures 4
Table of tables 4
Market Opportunity 5
Why are we writing about pricing and attrition? 5
Agent attrition is rising globally 5
Contact center prices continue to rise 5
Pricing and attrition pressures are interconnected 5
Client satisfaction is affected by agent churn and price increases 5
What is causing agent attrition? 6
Organic inflation 6
Inter-vertical competition for talent 6
Overheated contact center sectors 6
Poor management and supervision 7
Contact center functions 7
Lack of career progression opportunities 8
Regional attrition discussion 9
Onshore markets 9
US and Western Europe 9
Mature offshore markets 10
Canada 10
India 10
Philippines 10
Mexico 11
Emerging offshore locations 12
European nearshore 12
South Africa 12
Outsourced contact center pricing 13
Rising prices 13
Agent-related costs 14
Foreign Exchange Volatility 15
Pricing survey 15
Domestic outsourced pricing 16
Mature offshore markets 16
Emerging offshore markets 17
Customer Impact: how pricing and attrition affects outsourcing clients 18
Attrition and price hikes are already affecting clients and prospects 18
Higher price points 19
Quality concerns 20
The possibility of alternative business models 20
Go to Market 22
Recommendations 22
Understand issues in the local market affecting pricing and attrition 22
Culture 22
Local economic issues 22
Macro-level challenges 23
Develop clear career paths for agents 23
Ensure realistic and value-added benefit packages 23
Fulfilling work atmosphere 24
Preventative recruitment measures 25
Frequent feedback sessions 26
Augment supervisor training 26
Explore blended business models 26
Mitigate cost rise risks through financial instruments 27
APPENDIX 28
Methodology 28
Further reading 28
Ask the analyst 28
Datamonitor consulting 28
Disclaimer 28
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Table 1: Onshore inbound customer care hourly fully-loaded pricing: 2008 16
Table 2: Onshore inbound customer care hourly fully-loaded pricing: 2008 16
Table 3: Emerging offshore inbound customer care hourly fully-loaded pricing: 2008 17
Figure 1: Factors leading to attrition in outsourced contact centers 9
Figure 2: Inflation rises across selected offshore delivery locations: 2007 13
Figure 3: USD versus Euro: 2004 - 2008 15
Figure 4: Major contact center headaches among in-house providers 19
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