Burnley: The new Mumbai?

Is the end nigh for Indian tech support? A British telecommunications company is moving one of its call centers from Mumbai to Burnley, 21 miles north of Manchester, to cut costs. New Call Telecom chief executive Nigel Eastwood explains the decision:

Salaries in India aren’t that cheap any more. Add to that the costs of us flying out there, hotels and software, and the costs are at an absolute parity.

In the UK we will pay workers the minimum wage. Given the current economic environment, we will get good "sticky" employees who will also receive bonuses linked to performance.

With rents as low as £4 per square foot, prices for commercial real estate in Burnley are reportedly on par with those in Mumbai. Residential prices are similarly affordable; data from the property website Mouseprice indicates that four of the five most affordable streets in England and Wales are located in Burnley, a former mill town struggling with high unemployment. Meanwhile, salaries in the IT outsourcing industry in India are set to rise 11.9 percent in the upcoming year, and some business process outsourcing leaders in India have already admitted that, with unemployment high throughout the West, India’s competitive advantage in call centers is shrinking.

Eastwood also notes that using British staff should make call handling more efficient as well, because British customers will find compatriots easier to understand. Although the rest of the world may beg to differ on that one.