Can we rely on Geordie charm to save jobs?

Feb 10 2010 by Chris Knox, The Journal

Last month's news that 900 staff at the Shop Direct call centre in Sunderland were being made redundant was a blow to the North East's call centre industry. Christopher Knox assesses the strength of the industry in region.

THE North East has always been well regarded in the call centre industry, with the Geordie accent proving popular among businesses and consumers alike.

As a result, many of the UK’s blue chip companies’ e-retailers have set up operations in the North East over recent years, with the industry supplying work for around 60,000 people in the region, which equates to more than 5% of the working population.

This growth looked set to continue with the announcement last year that Tesco Bank was to create 1,000 jobs at the Quorum Business Park, Longbenton, North Tyneside, while other call centre firms such as Convergys and 2Touch are also looking to bring in additional staff.

Last month also saw one of the UK’s largest contact centre recruitment events take place in Sunderland, which attracted companies such as Barclays, EDF Energy and Lloyds TSB.

One of the biggest reasons why many companies have chosen the North East for their call centre operations is the popularity of the accent, with Geordie seen as more successful than others in sealing the deal or putting in-bound customers at ease.

Research conducted by YouGov shows that, while 52% of British consumers prefer a ‘Queens English’, 26% of consumers rate the Geordie accent within their top five favourites when calling a call centre.

This has been helped along by the rise of celebrity in recent years, with singer Cheryl Cole and double act Ant and Dec doing their bit to ensure that the accent is favoured by the public and in turn call centre operations.

Additional figures from analyst Contact Babel show that the popularity of the accent translates directly into how many businesses have or have considered opening up a call centre in the region over recent years.

Figures for 2008 showed that Newcastle rose one place to the top the table of favoured locations for call centres, followed by Glasgow, Leeds and Sheffield.

It is not only the accent that appeals to call centres, with Contact Babel’s figures also showing the region has the lowest staff turnover of contact centre workers in England.

Leading brand expert and author James Hammond said: “With personalities such as Cheryl Cole and Ant and Dec dominating the media, it’s no surprise consumers have become familiar with the Geordie accent and currently favour it above more traditionally perceived call centre accents.

“However, these accents may only work well in their respective contexts. An effective voice is a consistent and authentic one. The voice that you use to attract footfall must also chime with the customer’s experience of the company.”

However, there is a fear that the economic downturn could have the effect of rocking the North East from its mantle, with the economic downturn and a industry shift towards e-commerce leaving the region’s call centre workers exposed to the threat of job losses.

This was certainly the case last month when 900 staff at the Shop Direct call centre in Hendon, Sunderland, were axed after being given the devastating news that their posts were being made redundant and that the site was to close.

The firm said a total of 1,500 workers would lose their jobs at three of its seven UK call centres with Burnley, Newtown in Wales and Sunderland all closing.

Shop Direct, formerly known as Littlewoods Home Shopping, said that with more customers managing their own accounts online, calls to their contact centres had fallen from 33 million in 2005 to only 19 million today.

Other developments that have asked questions about the health of the region’s call centre industry include worrying trading figures from the region’s biggest independent operator, Hartlepool-based Garlands, with last year’s pre-tax profits plummeting from £2m to £476,000 last year, forcing it to cut over 200 jobs.

Hopes that department store retailer John Lewis would redress the balance by opening a call centre in Newcastle, which would have created hundreds of jobs, were dashed in December when it instead opted for Manchester and Glasgow.

One company boss that is acutely aware of the changing face of the region’s call centre industry is Peter Slee, managing director of contact centre and distribution specialist Spark Response in Gateshead.

The £10.5m firm has enjoyed year-on-year growth despite the recession, with the extension of existing contracts and the winning of new ones putting it on course to increase its turnover by 10%.