Aviva call centre case study

Improvements in ICT have enabled large TNC's to relocate their call centres to countries such as India, South Africa and the Philippines where costs (e.g. wages and land rates) are lower are therefore they can make more profit. Due to improvements in education levels, many more in these countries have the ability to speak english and the skills to work computers. They can therefore do the same work for less than British call centre workers. 

Call centres are offices where groups of people answer telephone queries from customers. Employees use a computer to give them information that helps them answer questions. 

Aviva

• 30000 aviva employees currently work in call centres
• Aviva's UK call centres are located in: Perth, Bishopbriggs, Norwich and Sheffield. 
• Aviva also have a call centre in Bangalore, India, employing 1000 workers. 
• Aviva are relocating some call centre jobs to india as it is 40% cheaper to employ call centre workers in India, meaning the company can employ more people to increase efficiency. Operating costs are between 10 and 60% lower than the UK. The new call centre will give the groups UK general insurance business extra flexibility and capacity. 

Advantages of Aviva

• Aviva will bring much needed money into the Indian economy and will create thousands of jobs in Bangalore (1000 workers by the end of the year)
• Aviva will develop Bangalore by bringing in technology and knowledge that it did not already have. For example, improvements in ICT like computers

Disadvantages of Aviva

• A fifth of all call centre jobs in the UK will be outsourced to India by 2010. This will leave tens of thousands of workers in the UK out of work.
• The company will most likely take its profits back to the UK, meaning there will be little benefit to Bangalore's economy. Therefore the company could be seen to be exploiting workers - they are paid low wages of £1200.

Why is India attractive to UK companies?

• It is cheaper to employ call centre workers in India, meaning companies can afford to employ more people and increase efficiency. For example, Estimated costs are 40% cheaper than the UK. Average salaries for Indian call centre staff are £1,200 compared with £12,000 in the UK. 
• Operating costs like land rent and cost of energy are between 10 and 60% lower than the UK. 
• Developments in ICT allows cheaper, quicker and clearer communication from India to the UK.
• About 10% of the population (around 100 million people) speak english fluently. Of the 787 million people living in towns, about 80% are literature and 18% of these are graduates. This provides a relatively skilled workforce for companies wishing to employ a large workforce. 

What are the concerns raised by Amicus about this offshoring of call centre workers? 

Amicus are concerned that too many UK jobs are being lost because companies are moving call centres to areas with low employment costs. They imply that this is because the UK government have imposed tight regulations of the insurance sector, so TNC's now want to move to areas where there are:

• No regulations of the insurance sector
• Low employment costs
• Tax benefits

This promotes maximum profits and minimal cost for the companies.