The Decline of “Voice” Outsourcing in India – A Realistic Perspective (2023)

The Decline of “Voice” Outsourcing in India – A Realistic Perspective (1)ThroughNick soul

As an outsourcing industry veteran of 20+ years, I recommend call center service providers and geographic destinations to our clients. India once dominated the call center market but things have changed. I recently asked a number of colleagues to comment on the state of call center services in India. I asked that everyone provide an experience-based view of the "real world." The answers I received were very interesting. While some believe that certain types of voice call center services will continue to flourish in India, most agree that voice contact center outsourcing is in what was once the largest and most prolific of all BPO outsourcing markets is definitely declining.

ThatThe Philippines now has the largest number of call center workersin the world and has recently surpassed India. To clearly understand how India lost ground in voice-based outsourcing deals, let's go back a few years. Over a decade ago, India established itself as the world's leading destination for contact center services for a number of reasons. The large English speaking population, low costs, educated agents with technical expertise and many other factors. The talent pool of well-trained English speakers has enabled other English-speaking countries such as the US, UK and Australia to tap into India's most important resource - its people. The onslaught of outsourcing deals led to a dramatic expansion of the call center industry across India. Tens of thousands of call center spaces sprout, construction companies were busy putting up business parks, expatriates poured in, bandwidth needed to be increased, infrastructure improved, megacorporations and conglomerates jumped on the bandwagon, VC money poured in, and vendors were unleashed to to spread the message:

Attention Call Center Outsourcing Decision Makers! Enter India! We provide cost effective call center outsourcing services implemented by highly trained English speaking agents.

It was a mantra heard over and over again in countless sales pitches at every outsourcing media company and by every sales and marketing person representing Indian call center companies, including yours. I spent some time in India in its heyday and did a lot of business there. In the beginning, the value proposition was realized. The Mavericks, who were among the first to move businesses to India, benefited greatly from the initial wave of success. We have gained a foothold and created a model for success.

This boom phase lasted several years. And suddenly the tide turned. We were beginning to see signs that the Indian call center industry was facing challenges including quality issues, complaints, high turnover, privacy and security vulnerabilities, and the insane onslaught of "me-too" start-ups with very aggressive sales tactics that are invading the market saturated India. Top BPOs in India, many setting benchmarks and industry standards, faced dramatic competition from a plethora of mid-sized and smaller contact centers that seemed to be popping up everywhere. This second phase of the BPO life cycle in India diluted the market and unified price levels. In part, this wave of not-so-impressive call centers is a very large part of the declining voice quality. The top tier BPOs aren't getting through here. You are also not immune to voice quality issues. To this day we are receiving sales calls from ominous call center companies from across India, many of which are start-ups, asking for a 'process' to fill vacancies.

Through my informal research, I heard from several Indian outsourcers who disagreed with me about the declining voice quality. While I respect everyone's point of view, it's hard to refute what is now an industry-wide fact that India has lost ground to the Philippines for clear reasons centered on voice quality. I am not suggesting that the industry in India will languish. India has been primarily responsible for the dramatic growth of the call center and BPO outsourcing industry. Our team at CustomerServ®would still consider Voice in India for specialized queues if guaranteed to our customers and their customers that the customer experience would not degrade.

Many of our recent client engagements and RFPs clearly spell out what global destinations our clients wish to stay away from. Our sellers were instructed not to bid if the recommended destination was India. Why is this happening? Let's focus on the reasons behind the problems faced by voice based call center deployment in India. Let's outline the specific reasons why India has lost ground to other geographic destinations:

  • The growth of alternative, low-cost geographic outsourcing destinations with limited barriers to entry.
  • The availability of English speaking agents with minimal accent neutralization issues and improved English understanding and conversational skills in other countries.
  • The growing need for multilingual services which are not readily available in India.
  • The over-construction of call center seats in India has resulted in meteoric attrition rates and a sharp decline in performance and quality.
  • Public awareness of “outsourcing to India” and related backlash.
  • The UK and US media and late night TV have satirized the Indian call center experience, creating an extremely negative and sometimes comedic perception. This, coupled with negative real-world customer experiences with Indian call centers, creates a dangerous combination of public views on how to deal with Indian agents.
  • The cultural divide between the Indian agent and the average consumer in English speaking countries, particularly the United States.
  • The costs associated with the training and development of agents and managers for the outsourcer and the client alike, with very high turnover rates in India.
  • The actual cost of outsourcing to India is much higher than the contracted rate. The cost of travel from frequent travel for ongoing training and troubleshooting combined with lost productivity, learning curve issues, the cost of declining service levels and performance, etc.
  • The increasingly young and inexperienced agents and frontline managers.
  • The lack of scalability without sacrificing performance.
  • Given all of the above, first-call resolution is a challenge. This drives decision makers to look for alternative travel destinations.

I want to reiterate that I am not suggesting that India's call center industry will capitulate. Far from it. I am just highlighting an industry trend and all indications are that demand for voice services in India will continue to decline.

Many Indian outsourcing companies have expanded their call center operations outside of India to the Philippines, Eastern Europe and North America and beyond. This is a sign that Indian BPOs are recognizing growing limitations and the declining appeal of the once formidable language destination. Indian companies are looking outside of India to mitigate risk. Many Indian BPOs have been successful in geographic diversification and their delivery centers generally perform very well in outsourcing services.

On the other hand, India's non-voice back office services are growing and will continue to do so. We are using Indian outsourcers for live chat sales and chat customer support with great success. Indian outsourcing continues to see growth in non-voice BPO business (back office, chat, web development, social media applications, medical transcription, etc.). It also appears that collections and claims management is continuing at a steady pace along with certain types of helpdesk and tech support.

We are all big brand customers. Most of us use the phone for customer service, transactions, reservations and much more. Each of us has a story to tell about our customer experience on the phone when an agent is thousands of miles away, working at his desk to solve our problems. I have had good experiences with companies like Sage (contact management software) in India. Every time I have asked for help, Sage's response has been top notch and the solution expertise has been world class. However, for every positive customer service call I had 2 negative ones and most of the time the agent just didn't "get it". The agent wasn't rude, abrupt or unresponsive, and I could tell he/she genuinely wanted to help me, but the knowledge base and cultural gap were obstacles the agent just couldn't overcome. I'm not sure if training is an issue or simply put, maybe the Indian agent is not staying with a call center job long enough to develop the necessary product knowledge and customer interaction skills needed to deliver a positive customer experience.

I've also had bad experiences with call centers in the Philippines and most recently in Mauritius. I've also had bad experiences with call centers in the US, Canada, and the Caribbean. I am not throwing negativity on the Indian call center market. I share real experiences from actual decision makers and people very close to the action.

India remains the second largest call center market in the world. Like Avis for Hertz, India may "try harder". Perhaps we will see a seismic shift in the industry that puts India back on top. We do not know it. But we know that large, scalable English-speaking countries with agent populations like India and the Philippines don't abound. We support emerging destinations and diversify to reduce risk. We have extensive experience in many global geographic markets with growing call center outsourcing markets for English and multilingual services.

The moral of the story is to take the time to review all your options as there are good geographic destinations that specialize in different call center and BPO industries. India remains a powerful force in outsourcing and will continue to lead. Depending on your unique business needs, we can recommend the right global marketplace and best vendors with the right expertise for your sourcing needs.

The Decline of “Voice” Outsourcing in India – A Realistic Perspective (3)

Don't fall into the trap of abandoning certain countries and providers as market saturation is a real problem. Turnover rates are a major concern in both traditional and emerging regions. Make sure you choose a location that meets the tangible and intangible needs of your outsourcing initiatives. Geographic diversification can contribute to a positive customer experience and this could lead to the success of your call center outsourcing campaigns.

The Decline of “Voice” Outsourcing in India – A Realistic Perspective (4)

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