January 1, 2002, heralded a new dawn in most of Europe. There are no more drachmas, escudos, francs, guilders, lire, marks, markkas, pesetas, punts or schillings. Only Euros.

The single currency, in 12 of the 15 European Union countries, may revolutionize customer choice and reduce costs, as companies no longer have a thick veil of exchange rates behind which to hide price differentials.

Europe, the Middle East and Africa are slowly emerging from the gloom of the downturn, greased by the events of September 11th. But as European economies slowly bounce back, a different call center industry is emerging, one similar to the US call center industry.

Gone are the high double-digit growth rates of call centers, workstations and agents experienced in the 1990s. Instead, companies are consolidating call centers into a few larger multimedia "contact centers." To that end, companies are diverting less-valued transactions to IVR and Web self-service. And they're opting for outsourcing and teleworking.

Companies are also opening call centers or partnering with outsourcers in countries outside of Western Europe. These states are in Central and Eastern Europe, Africa, the Caribbean, India and the Philippines.

Some countries (such as South Africa) and regions (notably the Middle East) have growing domestic markets that need call centers to sell and service them.

"The call center site selection picture is vastly more complex than it was a few years ago," says Philip Cohen, teleservices consultant based in Skelleftea, Sweden. "Companies are scrambling to find the most cost-effective sources of labor wherever they are, bearing in mind the need for access to high-quality voice/data infrastructure. It has truly become a global industry."

EUROPEAN REBOUND AND CONSEQUENCES

The International Monetary Fund's (IMF; www.imf.org) spring World Economic Outlook (WEO), published in April 2002, predicts European Union economies will grow by 1.5% in 2002. That's down slightly from 1.7% in 2001, but growth is expected to achieve 2.9% in 2003.

The 12-nation single-currency Euro-zone will expand by 1.4% in 2002 from 1.5% in 2001, and by 2.9% in 2003.

The UK, Europe's second largest country and the largest non-zone European economy, will achieve 2% growth in 2002 (off slightly from 2.2% in 2001), then expand by 2.8% in 2003.

With the upturn, unemployment rates will eventually fall. The WEO reports that the EU jobless rate will rise slightly to 7.9% in 2002, from 7.7% in 2001, but drop back to 7.7% in 2003.

In the Euro-zone, jobless rates will climb to 8.5% in 2002, up from 8.3% in 2001, then dip to 8.2% in 2003.

Out of the zone, the IMF forecasts the UK's unemployment to edge up to 5.4% in 2002 and stay there for 2003, a modest rise from 5.1% in 2001.

But the biggest squeeze on call center labor forces appears to be in Ireland and the Netherlands, despite slight jobless rate increases.

Holland will see jobless rates climb to 2.5% in 2002 from 2% in 2001 and to 2.7% in 2003. Ireland's unemployment rate will climb to 4.7% in 2002 and stay there in 2003, rising from 4% in 2000.

These rates match or fall below the 4% to 5% unemployment rates that most economists consider optimal. Both Ireland and the Netherlands have comparatively small populations: 3.78 million and 16 million, respectively. Both countries and their leading cities (Dublin and Amsterdam) have long been pan-European call center locations.

THE EUROPEAN LABOR MARKET DILEMMAS

Call center consultants say the rebound has tightened labor supply. Cuno de Haas, a senior consultant at BCI (Nijmegan, Netherlands), reports that many major European cities reached saturation levels of 2% of the workforce in call centers throughout Europe.

But like their American counterparts, European call centers are evolving to more sophisticated multimedia contact centers handling high-end calls and e-mail with IVR and Web self-service taking low-value contacts.

For example, Philip Cohen reports that IVR and Web self-service programs deployed at Telia, Sweden's largest telco, are expected to eliminate an estimated 600,000 calls that would have gone to live agents.

That trend may make call centers more attractive places to work, if accompanied by higher pay. But it may also rule out many communities, such as former mill and mine towns with high unemployment rates, and which attract lower-end call centers.

Cohen explains that these workforces often lack the high levels of language and comprehension skills needed to answer e-mail and text chat and handle first- and second-level help desks and high-end sales.

"These communities have gone from coal mining to 'call mining,'" he says. "But are the companies and authorities willing to educate and train these agents further to handle more complex contacts? So far I haven't seen that."

Europe's powerful trade unions continue to try and organize call centers, reports Cohen. But he doesn't think the unions realize that call centers are evolving to high-end centers less vulnerable to being organized from low-end call shops.

"There is an oversupply of low-end agents that has given less bargaining leverage to the unions," says Cohen. "But I do not know, and I suspect few people do know, how this unionization trend is going to play out."

Much of Europe still has a strong social safety net that keeps potential workers reasonably comfortable but out of the workforce.

The IMF praised France and other countries for encouraging part-time work and reducing labor taxes. But the fund stated that much more work needs to be done to make labor markets flexible, such as by strengthening incentives for the unemployed to find work.

Spain approved a decree that said job seekers will lose their unemployment benefits if they refuse three acceptable job offers within 30 kilometers (20 miles) of their homes.

According to the May 26 edition of Province (Vancouver, BC, Canada), which carried the story, the government said the decree was necessary to lower Spain's high unemployment rate. Projected to be at 13% in 2002 and forecasted to drop to 12.4% in 2003, the WEO says the rates are the EU's highest.

European workforces are aging: The countries have low birth rates that threaten to shrink the size of the region's working age population, thereby increasing the tax burden.

Governments that have attempted to address the issue through massive immigration from outside of Europe have faced stiff opposition in the polls. Witness the success of anti-immigration parties in recent French and Dutch elections.

Cohen recommends that European call centers think out-of-the-box by shifting hiring preferences from young people to older and retired individuals.

"You don't need your call center staffed by students," Cohen points out. "If you're running a financial services call center, for example, some of the best agents are retired bank officers."

January 1, 2002, heralded a new dawn in most of Europe. There are no more drachmas, escudos, francs, guilders, lire, marks, markkas, pesetas, punts or schillings. Only Euros.

The single currency, in 12 of the 15 European Union countries, may revolutionize customer choice and reduce costs, as companies no longer have a thick veil of exchange rates behind which to hide price differentials.

Europe, the Middle East and Africa are slowly emerging from the gloom of the downturn, greased by the events of September 11th. But as European economies slowly bounce back, a different call center industry is emerging, one similar to the US call center industry.

Gone are the high double-digit growth rates of call centers, workstations and agents experienced in the 1990s. Instead, companies are consolidating call centers into a few larger multimedia "contact centers." To that end, companies are diverting less-valued transactions to IVR and Web self-service. And they're opting for outsourcing and teleworking.

Companies are also opening call centers or partnering with outsourcers in countries outside of Western Europe. These states are in Central and Eastern Europe, Africa, the Caribbean, India and the Philippines.

Some countries (such as South Africa) and regions (notably the Middle East) have growing domestic markets that need call centers to sell and service them.

"The call center site selection picture is vastly more complex than it was a few years ago," says Philip Cohen, teleservices consultant based in Skelleftea, Sweden. "Companies are scrambling to find the most cost-effective sources of labor wherever they are, bearing in mind the need for access to high-quality voice/data infrastructure. It has truly become a global industry."

EUROPEAN REBOUND AND CONSEQUENCES

The International Monetary Fund's (IMF; www.imf.org) spring World Economic Outlook (WEO), published in April 2002, predicts European Union economies will grow by 1.5% in 2002. That's down slightly from 1.7% in 2001, but growth is expected to achieve 2.9% in 2003.

The 12-nation single-currency Euro-zone will expand by 1.4% in 2002 from 1.5% in 2001, and by 2.9% in 2003.

The UK, Europe's second largest country and the largest non-zone European economy, will achieve 2% growth in 2002 (off slightly from 2.2% in 2001), then expand by 2.8% in 2003.

With the upturn, unemployment rates will eventually fall. The WEO reports that the EU jobless rate will rise slightly to 7.9% in 2002, from 7.7% in 2001, but drop back to 7.7% in 2003.

In the Euro-zone, jobless rates will climb to 8.5% in 2002, up from 8.3% in 2001, then dip to 8.2% in 2003.

Out of the zone, the IMF forecasts the UK's unemployment to edge up to 5.4% in 2002 and stay there for 2003, a modest rise from 5.1% in 2001.

But the biggest squeeze on call center labor forces appears to be in Ireland and the Netherlands, despite slight jobless rate increases.

Holland will see jobless rates climb to 2.5% in 2002 from 2% in 2001 and to 2.7% in 2003. Ireland's unemployment rate will climb to 4.7% in 2002 and stay there in 2003, rising from 4% in 2000.

These rates match or fall below the 4% to 5% unemployment rates that most economists consider optimal. Both Ireland and the Netherlands have comparatively small populations: 3.78 million and 16 million, respectively. Both countries and their leading cities (Dublin and Amsterdam) have long been pan-European call center locations.

THE EUROPEAN LABOR MARKET DILEMMAS

Call center consultants say the rebound has tightened labor supply. Cuno de Haas, a senior consultant at BCI (Nijmegan, Netherlands), reports that many major European cities reached saturation levels of 2% of the workforce in call centers throughout Europe.

But like their American counterparts, European call centers are evolving to more sophisticated multimedia contact centers handling high-end calls and e-mail with IVR and Web self-service taking low-value contacts.

For example, Philip Cohen reports that IVR and Web self-service programs deployed at Telia, Sweden's largest telco, are expected to eliminate an estimated 600,000 calls that would have gone to live agents.

That trend may make call centers more attractive places to work, if accompanied by higher pay. But it may also rule out many communities, such as former mill and mine towns with high unemployment rates, and which attract lower-end call centers.

Cohen explains that these workforces often lack the high levels of language and comprehension skills needed to answer e-mail and text chat and handle first- and second-level help desks and high-end sales.

"These communities have gone from coal mining to 'call mining,'" he says. "But are the companies and authorities willing to educate and train these agents further to handle more complex contacts? So far I haven't seen that."

Europe's powerful trade unions continue to try and organize call centers, reports Cohen. But he doesn't think the unions realize that call centers are evolving to high-end centers less vulnerable to being organized from low-end call shops.

"There is an oversupply of low-end agents that has given less bargaining leverage to the unions," says Cohen. "But I do not know, and I suspect few people do know, how this unionization trend is going to play out."

Much of Europe still has a strong social safety net that keeps potential workers reasonably comfortable but out of the workforce.

The IMF praised France and other countries for encouraging part-time work and reducing labor taxes. But the fund stated that much more work needs to be done to make labor markets flexible, such as by strengthening incentives for the unemployed to find work.

Spain approved a decree that said job seekers will lose their unemployment benefits if they refuse three acceptable job offers within 30 kilometers (20 miles) of their homes.

According to the May 26 edition of Province (Vancouver, BC, Canada), which carried the story, the government said the decree was necessary to lower Spain's high unemployment rate. Projected to be at 13% in 2002 and forecasted to drop to 12.4% in 2003, the WEO says the rates are the EU's highest.

European workforces are aging: The countries have low birth rates that threaten to shrink the size of the region's working age population, thereby increasing the tax burden.

Governments that have attempted to address the issue through massive immigration from outside of Europe have faced stiff opposition in the polls. Witness the success of anti-immigration parties in recent French and Dutch elections.

Cohen recommends that European call centers think out-of-the-box by shifting hiring preferences from young people to older and retired individuals.

"You don't need your call center staffed by students," Cohen points out. "If you're running a financial services call center, for example, some of the best agents are retired bank officers."