Up to a million UK contact centre jobs could be wiped out due to a “perfect storm” of market conditions that will put the squeeze on the profit margins of many smaller operators in the industry.
That is the stark warning issued by Reuben Singh, the boss of Salford-based Isher Capital, as well as AlldayPA, MyalldayPA and ADP Call Centres that offer contact centre services to small businesses. He claims that the industry will see costs rise by over £440m when the minimum wage rise takes effect from April 1 this year.
With 4% of UK workers employed in the call centre industry, Singh argues that one million UK jobs are in jeopardy. This threat is acute for Scotland and the North East of England where as much as 6% of the working population rely on the sector.
Singh told Smallbusiness.co.uk: “I support the increase in the minimum wage. Failing to prepare for it, however, means smaller UK-based call centres are now sleepwalking to disaster by not considering these additional costs, alongside the need to invest to modernise and evolve to future-proof their businesses.
“Contact centres are being challenged to form new strategies to meet the evolving requirements of customers or face losing out to either offshore or larger firms. The phone remains the most important communication tools for businesses, the rise of digital has only heightened the need for a professional, personal and proactive communication, which is so crucial for business partnerships.
“The digital age has meant the opportunities for strong growth in this industry lie in multi-channel services, incorporating functions such as web-chat and social media interactions into already existing strategies. The budget needed for this modernisation and training to deliver these offerings to customers is significant.
‘With depleting margins already hitting the smaller call centres, they are going to fall even further behind.”
However, Singh believes there is a strong demand for more regional contact centres, making it critical that they overcome the need for lower margins and higher investments. He added: “Local regional suppliers allow businesses to oversee operations and ensure customer service standards are being maintained throughout, increasing the connection and empathy they have with customers.”
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