APAC drives contact center services growth

Contact center agent seats growth and demand for outsourcing services high in region due to low labor costs and reasonable language skills, but low wages cause higher agent attrition rates, study reveals.
Written by Ellyne Phneah, Contributor

Companies are spending to improve their contact center services, with Asia-Pacific recording a 9.7 percent growth in contact center agent seats to reach 2.5 million in 2011. The region will also show the highest growth in global contact center outsourcing in 2012 and beyond, driven by domestic demand, according to Frost & Sullivan.

The research firm released its findings on Thursday, stating that Asia's contact center industry can expect a rosy future as agent seats are expected to grow by a compound annual growth rate (CAGR) of 8.1 percent to reach 4 million by 2018. All emerging markets in the region are predicted to maintain double-digit growth for the period between 2012 and 2018, it added.

Asia-Pacific will also demonstrate the highest growth in global contact center outsourcing in 2012 and beyond, with much of the growth driven by domestic demand, especially from the telecommunications and banking and finance sector. This is because more domestic enteprises are focusing on providing quality customer service, which will up the level of competition in emerging markets.

"Contact center owners in the Asia-Pacific will credit most of their successes to the region's large and cheap labor pool with considerable English and regional language skills, solid infrastructure, and cultural similarities with Western countries," said Krishna Baidya, industry manager at Frost & Sullivan.

However, this quick growth in the number of contact center outsourcers may lead to market saturation. Already, countries in Singapore, Hong Kong and Taiwan show signs of saturation and are on the higher-end of the growth curve.

Low wages cause high agent attrition
The study also showed that while agent seats are likely to increase across the region, organizations attempts to cut costs by suppressing these agents' wages will lead to higher industry attrition rates compared to other markets. 

Baidya did say that outsourcing companies are now recognizing the importance of having well-trained and well-paid agents, thus bucking the trend of enteprises investing more on system upgrades than equipping their contact center staff.

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