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MBD Market Report Call Centres : May 2005

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Report Scope

The UK call centre market development report analyses market positioning, European positioning, UK economy, market factors and size, market segmentation by sector and function, market trends, outsourcing versus internal supply. Multimedia, employment issues, software and regionality are also examined. The report contains five year historical data, current market conditions and influences, together with a five year sector forecast by MBD analysts. The data is clearly presented and illustrated.

EXECUTIVE SUMMARY

MBD believe that the number of agent places in UK call centres has been increased year-on-year since 2000. In 2004, the number of agent places was increased by an estimated 6% to 512 200. This is in contrast to strong annual growth of 16% recorded in the early part of the review period. The number of agent places understates the total number of employees in the sector as many centres operate a shift system, often operating a 24-hour service, resulting in more than one employee filling an individual workstation.

Throughout the review period the number of agent places in outsourced call centres has demonstrated consistently strong growth. The number of agent places has developed at a more rapid rate than the in-house sector throughout the review period.

The number of places in outsourced call centres is believed to have reached 52 241 (10% of the total) in 2004, representing a highly significant increase of 93%, compared with 2000, when outsourced centres accounted for just 7% of all agent positions.

The number of call centres in the UK is forecast to increase over the next five years, although the rate of growth is expected to be lower than those recorded during the review period. Although the market is showing signs of maturity and despite the continued trend of offshore outsourcing, growth reflects the importance of direct marketing, as the traditional marketing media communication facilities and the integration of technologies can be effectively achieved combined with the continued emphasis on customer relationship management.

An element of the growth is expected to arise from Customer Interaction Centres, with an increase anticipated in companies offering e-mail response services, and web_based interactivity in real time, in support of telephone services. Such services are increasingly regarded as the norm by customers and the trend has been fuelled by the growth in e-commerce. The anticipated further development of e-commerce is m-commerce, where direct marketing opportunities exist for reaching individuals with highly targeted messages electronically to their mobile telephones.

During the five year forecast period up to 2009, the rate of annual growth in percentage terms will slow as the statistical base increases. Between 2004 and 2009, the number of call centres operating in the UK is expected to increase by 10% to a projected 6093 in the latter year. Growth in the call centre market is anticipated to be predominately generated from existing call centres expanding rather than by new start ups.

The number of agent positions in call centres in the UK is anticipated to continue to increase over the five year forecast period, and indeed the rate of growth is expected to exceed growth in the number of call centres, reflecting the continued trend towards larger centres. Annual growth levels in the number of agent positions are forecast to remain relatively consistent at between 5% and 6%, cumulating in an anticipated increase of 31% between 2004 and 2009.

Productivity gains are also expected within call centres, partly due to technology advances in outbound calling. The industry has a reputation for stress and resultant high staff turnover, although this will possibly improve due to the EU charter for employers and workers in the call centre, which was published in 2004. The trend for companies to outsource their call centre operations to lower cost countries is also set to continue, which may take employment away from UK agents.

The trend towards greater provision of outsourced call centres is widely expected to continue. The pace of software change in the call centre industry has effectively increased the perceived risk of investment in the sector by many in-house companies who fear investing in technology which will be superceded by more powerful systems in the short term. This has allowed the opportunity for outsourced suppliers to adopt an added value sector by maintaining state-of-the-art technology. MBD believe that the outsourced industry will increasingly focus on providing added value services.

The number of places in outsourced call centres is forecast to increase during each year of the review period, culminating in a real term increase of 79% compared with 2004. The number of agent positions is anticipated to increase from 52 241 places in 2004 to 93 618 places in 2009, while in-house agent positions are expected to increase by a more moderate 25%. As a result, by the end of the forecast period, outsourced agent positions are expected to account for as much as 14% of the total number of agent places of the UK call centre industry.

TABLE OF CONTENTS

LIST OF TABLES

53	1: Number of Call Centres in the UK, 2000-2004
54	2: Number of Agent Places in Call Centres in the UK, 2000-2004
55	3: Segmentation of Call Centre Agent Places, by Market Sector, 2000-2004
56
57	4: Number of Agent Places in Outsourced Call Centres in the UK, 2000-2004
58	5: Penetration of Internet and Telecommunications Technology in the UK, 1999 and 2003
59	6: Location of Call Centres in the UK, 2004
60	7: Analysis of the Changes in the Structure of the Call Centre Industry, 2003-2004
61	8: Analysis of the Employment Structure of the Call Centre Industry, 2003
62	9: Analysis of the Financial Structure of the Call Centre Industry, 2003 and 2004
63	10: Financial Analysis of Broadsystem, 2000-2004
64	11: Key Financial Ratios for Broadsystem, 2000-2004
65	12: Financial Analysis of Club 24, 2000-2004
66	13: Key Financial Ratios for Club 24, 2000-2004
67	14: Financial Analysis of Inkfish Call Centres, 2000-2004
68	15: Key Financial Ratios for Inkfish Call Centres, 2000-2004
69	16: Financial Analysis of Kingston Communications Contact Centres, 2000-2004
70	17: Key Financial Ratios for Kingston Communications Contact Centres, 2000-2004
71	18: Financial Analysis of MM Group, 1999-2003
72	19: Key Financial Ratios for MM Group, 1999-2003
73	20: Financial Analysis of The Merchants Group, 1999-2003
74	21: Key Financial Ratios for The Merchants Group, 1999-2003
75	22: Financial Analysis of Thus, 2000-2004
76	23: Key Financial Ratios for Thus, 2000-2004
77	24: Financial Analysis of SITEL Europe, 1998-2002
78	25: Key Financial Ratios for SITEL Europe, 1998-2002
79	26: Forecast Number of Call Centres in the UK, 2005-2009
80	27: Forecast Number of Agent Places in Call Centres in the UK, 2005-2009
81	28: Forecast Number of Agent Places in Outsourced Call Centres in the UK, 2005-2009

Text © 2005 MBD

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Last updated by Amanda Porteous 2005