British energy company sparks concern over Indian outsourcing

India has reaped the benefits of foreign companies switching jobs and resources to the country over the last five years.

But a recent decision by power company Powergen — a British subsidiary of German energy supplier E.ON — has pointed towards a potential backlash.

Powergen announced last week that call centres in India would no longer be answering telephone calls from its customers owing to complaints about the poor standard of staff service.

Trade union Amicus described the move as “a welcome vote of confidence” in British workers and cited rising local wages in India and problems of long-distance management as key reasons behind the announcement.

“We very much hope that Powergen’s decision will help bolster the reputation of UK call centre operations and turn the tide of companies moving their call centre operations to low-wage economies,” said David Fleming, national secretary of Amicus.

“We hope that companies that have offshored will follow by announcing moves back to the UK and other companies contemplating moving their operations abroad will balance the potential impact on their services and brand.”

Powergen’s news marked a significant setback for the offshoring of foreign companies abroad in India, Amicus claimed.

“The union has said that there is evidence of a growing crisis in the Indian call centre and back office industry, including rising labour costs and problems in recruiting experienced middle managers,” Fleming added.

Powergen began using Indian call centres almost five years ago.

Meanwhile, Nick Horler, Powergen managing director, conceded that “offshore call centres may have their place for certain industries”.

“However, we believe that we can best achieve industry-leading customer service by operating solely in the UK.”

In recent years leading foreign companies, including banks and telecoms companies, have switched their call-centre operations to India, across Asia and in eastern European countries in a bid to save costs.

In a move which bucks the international trend, a leading Indian outsourcing company outlined plans last week to create 1,000 call-centre jobs in Northern Ireland.

ICICI OneSource, one of India’s largest business processing outsourcing companies, said that it would set up two contact centres, the first being in Belfast, over the next two years.

British financial institutions Royal Bank of Scotland, Nationwide and Alliance and Leicester have long prided themselves on the fact that they have kept their call centres in Britain.

– AFP /ct