Why Indian Call Centers Fail

In a recent conversation with an executive who is an expert on setting up call centers in India as well as other countries throughout the world, I learned that a major reason call centers in India fail is poor management. And 90% of call centers in India fail. Start-up companies in India do not consider hiring an experienced call center manager to be a critical part of the first years’ budget! This sets up a vicious cycle that harms the business in three ways:

1) Poor skills and poor salary = poor attitude

When a new call center starts up, the company will very often spend money on everything else: office space, furniture, desks, technology (IT), and equipment. To be sure, these are important… but without an experienced manager from the call center industry, a call center in India will not be able to select, train, and retain the right staff. The company will also not know how to build the business and retain good clients without the expertise of a manager who has worked in that industry. Spend money on an experienced call center manager whom the company, callers, and clients can respect.

Frequently, a call center manager in India will earn the equivalent of $4000 a year…or less. It is not a position that commands as much respect as being an IT manager, for example. So finding an experienced call center manager and rewarding that person more than usual can be good for him/her–and good for business. Instead of going out and finding the best managers they can, companies are spending money on brokers to help them get clients. Many of these brokers demand money up front. Better to invest money in the key employee–a good manager–who will make your call center stand out from all the call centers in India!

An inexperienced call center manager may be distant, inefficient, and ineffective. Any of these problems in a call center in India will lead to failure.

2) Poor attitude = poor environment, poor employees, and poor retention

M any call center managers in India don’t care about finding, training, and rewarding good callers. Maybe they just don’t like people. They may even be rude or apathetic. This leads to caller burnout–and high attrition rate for callers and clients. A manager’s inability to create a good work environment predicts the failure of your relationships with clients and your business. Aim to have a manager who can motivate callers to stay–and become managers themselves!

The lack of respect a manager at a call center in India gets filters down from the manager to the callers to the person on the other end of the phone…which is why Indian call centers are currently not competitive with those in other parts of the world. If you run a call center in India– hire an experienced manager who commands respect and respects others!

Since most call centers in India suffer from 20 to 50% turnover in the first year, it is important to hire someone who can recruit and train a reliable group of callers who will make money for the company.
Which is worse–having to pay staff a bit more each year because they are pulling in good clients and establishing a successful business… or finding and training new callers all the time because management just does not know or care how things are done?

Studies show that work environment is as important as–and often more important than–salary…even in a call center in India where people may be desperate for work. A manager with experience in the call center industry will create a system of rewards that makes the place feel like home.

3) Poor environment & results = poor reputation = The End.

When managers do not treat callers well and do not know how to train callers, the company loses both callers and clients: long-term losses that cannot be reversed. According to a Wharton Business School study, call centers that keep more employees –and promote them from within–maintain a better customer focus and keep their clients. Call centers in India that develop a bad reputation with employees and clients fail in the first six months.
Remember: a bad reputation is nearly impossible to reverse…and certainly cannot be repaired as quickly as it is created.

According to the NY Times, as of August, 2013, business growth in India has slowed to 4.4% per year (down from about 8%). A great deal of this reversal is due to poor management.

Call centers in India are often hesitant to spend money on experienced managers. However, the ones that do spend their money on good managers are the ones that succeed in the long run.

(1) Call centers in India are often hesitant to spend money on experienced managers.
(2) Business growth in India has slowed down to 4.4% due to poor management.
(3) Poor skills and poor salary = poor attitude

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