10 Key Challenges Faced By the Call Center Industry in India

1. High Level of Attrition: Attrition rates that hover between 25-40% have been a long-standing bane of the Indian call center industry. Significant attrition rates are highly undesirable situations for any management, since when an employee leaves the organization; it leads to a double whammy. First, the resulting void hampers the quality of customer support being provided. Further, filling up the vacant position with a new agent and their subsequent training have stern cost implications as well.

2. Detrimental Effects on the Health of Employees: Call centers have garnered a bad reputation as being particularly demanding when it comes to employee health concerns. Constant pressure on agents to work at odd times and perform at their peak throughout the day to satisfy customers' rising expectations, literally makes them ready to drop. As a result, their circadian rhythms get disrupted and they become susceptible to panic attacks, hypertension, digestive disorders, blurred vision, insomnia, backache, poor immunity, and so on. Ultimately, these conditions promote absenteeism, reduce employee productivity, and play havoc with their morale.

3. An Industry Which has Outgrown its Peak Growth: This is one of the biggest operational challenges in the call center industry. By now, India is a mature player and taking this fact at face value seems advantageous, but the other side of the coin has something different to tell.

Clients who have outsourced call center operations to India long ago have their finger on the pulse; they know the drawbacks that exist within the market. Hence, sometimes they are wary of making fresh investments that invariably spell slow growth for the sector. Clients are also considering new outsourcing destinations that are cheaper in comparison and are more enthusiastic about growth, and have better native English speakers.

4. Prohibitive Property Costs: In the formative years, when the call center culture had just begun to take root, commercial property was relatively cheaper even in tier 1 cities. But today, as real estate prices have hit the roof throughout the country, it's becoming increasingly difficult to set up and sustain a call center business and still offer the cost advantage that was India's USP in the earlier days.

5. Tougher International Competition: In recent years, countries like China, Malaysia, the Philippines, Brazil, and even Poland are giving the Indian call center industry a run for its money. In 2014, a joint study conducted by ASSOCHAM and KPMG had revealed that competing countries were snatching away almost 70% of India's incremental BPO businesses. Not only that, the study had also highlighted that just one in 10 Indian graduates look for call center jobs.

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6. The Accent-triggered Communication Gap: There's no doubt that Indian call center agents have a good grasp of the English language. But, their accent doesn't go down well with many westerners. They find it feigned and more importantly, unintelligible. Hence, a communication gap becomes inevitable and customers soon get frustrated. Countries like Philippines, where the majority of the population speaks Western-accented English naturally, therefore gain an upper hand.

7. Maintaining Decent First Call Resolution (FCR) Rate: For call centers, FCR is the litmus test of customer satisfaction. Whenever a caller initiates a conversation with an agent, they expect that their grievance will be redressed right away. In case the caller is forced to engage with multiple agents on a single query, their level of satisfaction takes a nosedive. However, it's also true that today's tech-savvy customers hurl more and more tricky questions at agents, which are not easy to solve at one go.

8. The Outsourcing Butterfly Effect: Foreign business clients are the lifeblood of the Indian call center industry. So any change in the Western socioeconomic or political situation generates ripples in India. For instance, if a foreign government enacts a law that restricts companies from outsourcing, then it will definitely not be construed as good news by Indian businesses. Needless to say, India will suffer the loss of business. Additionally, if certain other countries are offering better government policies for setting up offshore call centers then it also impacts call centers in India.

9. Zero Differentiating Factors: A big chunk of Indian call centers are exclusively focused on offering support to English-speaking customers. They are not giving importance to other major languages such as French, German, Spanish, Japanese, etc. By doing this, they are crushing their growth prospects under the wheels of self-imposed restrictions, while being unable to differentiate and grow in other related verticals.

10. Tightening Purse Strings: As our roundup of call center problems in India draws to a close, let's touch upon another problem. It's often found that resources allocated to most Indian call centers are inadequate. In order to maintain profitability and tackle rising global competition, companies are forced to overload employees, offer lower salaries, and cut back on infrastructure and facilities. This is resulting in below standard services offered by some of the call center companies in India.