Ovum estimates home-based agents to increase to 160,000 by 2017

ovum.logoThe total number of outsourced agents working at home will soon exceed 100,000 globally, and the variety of industries that are availing themselves of this business model is expanding, according to global analyst firm Ovum.

ovum.peter.ryan.image.2014Peter Ryan, principal analyst in Ovum’s IT Services practice and author of the report, comments:

“Outsourced home-based agents are starting to diversify beyond strict customer care functions to managing more complex enquiries across multiple channels. The long-time benefits associated with third- party home agents, such as competitive pricing and labour quality, have been determinants in helping to foster this significant growth.”

Ovum estimates that the total number of home-based agents will increase from just under 84,000 to nearly 160,000 by the end of 2017. This expansion will occur at a compounded annual growth rate (CAGR) of 17.5% through this period, which is approximately twice the rate of the bricks-and-mortar contact centre outsourcing market.

Despite the strides made in growing the outsourced home-based agent sector, this expansion has been limited both in terms of the industries that opt for this business model and the geographies where it is deployed. To a large degree, lingering perception issues (notably data security and supervision concerns), broader cultural concerns, and infrastructure worries surrounding home-working are hampering the ability of outsourcers to grow prospective clients. For the vendors of these services to be successful, they will need to address these matters with non-users, and familiarize themselves with the shifting enterprise expectations of virtualized agents.

Outsourcers providing home-based agents are predominantly performing customer service functions, which have traditionally accounted for the majority of horizontal work supported using this business model. However, the provision of technical support is likely to see pronounced growth over the next four years due to a need to recruit agents that are able to provide assistance for more specialized products/services, and which may otherwise not be attracted to working in contact centre facilities.

The healthcare vertical is slated to be the most aggressive adopter of outsourced home-based agent services between 2013 and 2017, increasing from 8% to 13% of total agents through this period. The overwhelming bulk of this growth will come from the US market, and will be driven in large part by the Affordable Health Care Act (AHCA).

Meanwhile, the financial services sector poses an interesting challenge for outsourced home-based agent vendors, in that anecdotal evidence suggests that firms in this space are already using the virtual platform, but are doing so in-house. It will be difficult for clients to move this work to outsourcers due to the heavy compliance requirements in this sector, which explains why the proportion of total home-based agents associated with financial services is slated to only increase from 11% to 13% between 2013 and 2017. However, vendors should consider the opportunity to use the virtualized model to provide higher-value services to financial services clients, most notably brokerage support for capital markets and policy management functions in the insurance space.

“Ovum’s recommendations from the study encourage enterprises to understand the risks of adopting an outsourced home agent strategy. The use of third-party home agents is an excellent alternative to traditional delivery methods for some firms, but this move requires significant reflection on the part of prospective enterprises.

For vendors on the other hand, one of the successes of home-based agent outsourcing has been the ability to recruit large numbers of high-calibre agents. However, there are signs that attrition within this contact centre segment is starting to creep up. To maintain a sizable pool of available agents, Ovum recommends that outsourcers seek out otherwise unexplored potential pockets of workers,” concludes Ryan.

Peter Ryan – Principal Analyst in Ovum’s global IT Services practice

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