Call center agent outsourcing in Europe, the Middle East and Africa (EMEA) will grow significantly over the next five years, as companies look to outsource non-core competencies - that, according to a report from analysts at Datamonitor.

According to their report, Call Center Outsourcing in EMEA, of the nearly 1.2 million agent positions in the region, 150,000 (12%) are currently outsourced to a third party within EMEA.

By 2007, Datamonitor predicts this number will have almost doubled to 290,000 - 16% of all agent positions in the region. Regarding offshore agent outsourcing, the report finds that despite companies remaining averse to risk, the number of offshore-outsourced agent positions will reach 60,000 by 2007. Regions fast becoming popular with companies for offshore agent outsourcing include North Africa, South Africa, Eastern Europe and India and South America. The number of offshore-outsourced agent positions in the Middle East and Africa will grow at a compound annual growth rate of 22% between 2002-2007, significantly above the EMEA average of 14%. By 2007 there will be 40,000 offshore-outsourced agent positions in the region.

For companies looking to significantly reduce call center costs, moving to a location with lower labor costs is becoming increasingly popular, and there are three particular regions in EMEA. For French companies, North Africa, primarily Morocco and Tunisia, are popular locations, while South Africa is popular amongst English and Dutch companies.

The other large growth market for offshore outsourcing within EMEA is Eastern Europe, in particular the Czech Republic, Poland and Hungary. By 2007, there will be 20,000 offshore-outsourced agent positions in Eastern Europe, mostly serving Germany and Austria.

For British and Spanish companies, the main offshore markets are India and South America respectively. The report finds that there will be a shift to these locations, but that the growth in domestic outsourcing markets will continue to drive growth in these countries.

The tendency to look to outsourcing varies greatly by vertical market. Companies in the telecom and technology sectors have a very high propensity to outsource. Pressures to cut costs in these industries will lead companies to outsource even more over the next five years.

Financial services companies are relatively conservative when it comes to outsourcing, but the size of the financial services call centers market makes it also one of the largest outsourcing market.

"More and more companies are looking to outsource their call center operations as they realize that in most cases they are not core to their business." Says Datamonitor's Robin Goad. "Offshore outsourcing is growing rapidly, but from a relatively small base. Although the savings can be significant, the perceived risks are too many for the majority of companies and offshore outsourcing remains a minority interest. Companies can still make significant savings and productivity improvements by outsourcing to a domestic provider. What we are seeing is the emergence of a combines outsourcing model, where companies keep high value call center activities in-house or in the same country, but are increasingly willing to move low-value and labor intensive traffic offshore."