- February 9, 2018
- Posted by: Ryan Strategic Advisory
- Category: Industry commentary
For outsourcers in the UK and the Republic of Ireland, finding new locations from which to deliver quality contact center services remains a challenge. However, in recent years, one of the most successful options has proven to be close at hand: Northern Ireland. This territory has attracted some of the most important names in front-office BPO, and remains one of the more sought-after delivery points within the British Isles. Going into 2018, providers should keep Northern Ireland top of mind for nearshoring opportunities, but will need to remain vigilant around what type of services they provide from this jurisdiction.
Northern Ireland has experienced an economic turnaround since the 1990s, commensurate with its move toward more political stability. These efforts have brought more interest from prospective investors across sectors, looking to take advantage of an advantageous cost base for inputs, a business-friendly commercial climate (driven in large part to the region’s proactive investment agency), as well as relatively easy access by air, water and road. Feedback from providers on the ground suggests that Northern Ireland’s education system has helped in supplying the labor force with agents that can hit the ground running for careers in both front-line and digital aspects of customer management. These elements have attracted some of the biggest brands in contact center services including Firstsource, Teleperformance, Convergys, Concentrix and Tech Mahindra.
Speaking practically, the front-office BPO sector has been wise not to concentrate itself in Belfast, the largest city in the Northern Ireland. Efforts to diversify the industry into Londonderry, Newry and Bangor have been a major reason for Northern Ireland’s relatively stable BPO cost base. It has not run up against the problems of tight labor and real estate markets, a common problem for locations that rely on just one established point of contact center delivery. But, with a population of just under two million, smaller than many other nearshore delivery points in Europe, and an economy powered by a labor that is coveted by finance, aerospace and tourism, sourcing agents may become more difficult and costly.
It is incumbent upon front-office BPO players to ensure the roles they plan to fill in Northern Ireland are focused on high-value functions that concentrate on driving consumer loyalty, high-end technical support and analytics. This likely entails using fewer numbers of agents for longer periods of time. Higher volume transactional work is less suited to a more diversified and developed economy. This blueprint will do much for Northern Ireland’s sustainability as a front-office BPO delivery point, and avoid the attrition problems facing many locations that have chosen to concentrate on lower-value work that leads to spikes in workforce turnover.
BPO investors still need to weigh other issues in the coming months. The impact of any BREXIT deal on the region is unknown, while the Stormont talks have yet to be resolved. As well, there are emerging concerns around inflation in Northern Ireland (especially as it relates to housing), which could impact agent salary requirements. That said, Northern Ireland remains a compelling delivery point for Irish and UK enterprises, and forward-looking BPO providers need to harness the high value that can be derived from its shores.