Research

The Call/ Contact Centre Sector in the North West of England

Call centres have developed at an incredibly fast pace in the North West since the early 1990’s. Announcements of call centres becoming established in the North West and, to a lesser extent, leaving the North West have become common place in the Inward Investment newsletters and the business pages of local press. A number of major companies including the AA, Abbey National, BUPA, Barclays, British Airways, Cable & Wireless, US Airways and Co-Operative Bank have established large call centres in the region. The North West also has the largest established regional contact centre support infrastructure: CallNorthWest, which is designed to facilitate communication across a network of operators and suppliers, identify and develop best practice policies and the sharing of ideas as well as the promotion of the Industry to the wider community.

The North West is now home to 680 Contact Centres, an increase of 159 over the last five years. The number of call centres has grown significantly in the past year. In the period 2007 - 2008 the numbers employed within contact centres in the North West has again increased, this time by 7%.This equates to over 22,000 more positions in the region. There are now 172,079 individuals, employed within an estimated 680 contact centres in the region. This growth is consistent across all 5 sub-regions (Cheshire & Warrington, Cumbria, Lancashire, Manchester and Merseyside), when in the past it has been concentrated in certain towns and cities. Significantly, the region has seen growth within small contact centres, under 25 seats, as organisations consolidate activities into a contact centre environment.

The North West’s economy is increasingly reliant upon contact centre employment, more so than any other UK region. Over the past five years contact centre employment has grown in the North West by over 50,000.We now have 5.3% of the working population people working directly in contact centres, an increase of 0.5% in the past year. The North West remains a highly competitive region of the UK for continued inward investment in contact centres. Despite the high demand for staff, salaries are relatively low and skills gaps are minimal. Average contact centre salaries are significantly below the UK averages. Operations Directors within the North West report significantly less skills gaps in management ability than in other UK regions. Although the attrition rate has remained stable at 20%, many Managers feel this is the most pressing concern they have to deal with. Research suggests that whilst recruitment is not an issue, most call centres can, with effort, attract the numbers required. Keeping them is challenging.

A significant proportion of centres reported that they had no retention problems but it’s unclear at what level of retention they operated at. The Financial Service Sector plays a significant role in the North West’s regional economy and has a significant call centre footprint here. The impact of the credit crunch and the wider economy entering a recession, to many observers would be felt hard, in reality the Financial Service Sector has been consolidating departments and services since deregulation and has been following a strategy of a divestiture in low skilled labour and self service for several years. Citigroup, Barclays, Co Operative, Norwich Union and Royal Sun Alliance have all reduced their North West call centre operations in the past 5 years, before anyone was aware of the term credit crunch.

We have already seen the impact of Aviva’s decision to restructure its insurance operations by closing a number of sites and make 1800 redundancies. Manchester was chosen as one of seven ‘centres of excellence’ and has seen growth of services delivered and employment as a result.

In the short term at least, the credit crunch will not be expected to affect call centre employment significantly as anxiety over personal finances will increase call volumes. The impact of mergers and acquisitions are more likely to have an impact as duplication of services is removed. This may create opportunities for existing sites in the region to expand or, on the negative side, sites to close as the work is consolidated outside the North West or even UK. Whilst 2007 and the first two quarters of 2008 have proved a positive period for call centres, the next year could see significant changes. The risks facing the region from the external environment are significant. The response of contact centres in the region to the previous changes and challenges such as Offshoreing by investing in developing the skills of the workforce in particular at agent and team leader level, will need to remain a priority if the employment in the region is to be protected.

In 2007 the North West Regional Development Agency appointed CNW as the lead body for contact centres in the region. due to the significance of the sector to the regional economy. We now report on the effects of the economy of the sector on a monthly basis and produce an annual sector report covering key data, trends and needs and interests of the sector.

The monthly Reports are available to download below: