With good English and a keen workforce, the Baltic states have created a booming call center industry. At least that is the mantra.
The reality is the industry is struggling. Many companies are moving away to countries like India and the Phillipines where there are millions who will work for cheaper wages and speak better English. Now call centers are fighting back. We find out how and why in this week's Industry Insider.
TALLINN - Once a hotspot for the call center industry, Tallinn is now experiencing a withdrawal by the foreign companies that so readily outsourced to Estonia only a few years ago.
When foreign companies started feeling the sting from higher local wages at the start of the decade, outsourcing emerged as the logical solution.
With low wages, strong infrastructure, and a linguistically well-versed population, it is hardly surprising that Estonia's capital was viewed as prime territory for establishing international call centers.
A range of companies, predominantly Scandinavian, relocated their operations to Tallinn. Among them was the Hilton hotel group's call centre for Northern Europe. In 2003 a government Web site titled "Invest in Estonia" even featured a spotlight sector review for the call center trade, so strong was the industry's growth.
Today the same sector review is still online, but only as a lone page trapped in digital purgatory 's a neglected thread of the "Invest in Estonia" website, no longer accessible from the home page.
Likewise, there is no longer a Hilton call center to be found in Tallinn; the hotel empire closed its 120-person operation and opted out of the Baltics in September 2007.
So why has foreign investment stagnated?
Martin Kurv, the quality and training manager of Transcom Estonia's call center 's one of Tallinn's largest, employing up to 350 people in the high season 's spoke to The Baltic Times about the issue.
"It was a growing business a few years ago, but in the past few years it has stayed at the same level. At first it was a fast-growing business in Estonia because our salaries were much lower than Finland, for example, so then lots of Finnish companies moved their call center business to Estonia," said Kurv.
"But now, after joining the EU, our salaries have also grown, and the difference between salaries in Estonia and Finland is still there, but it's not as big as it was, say, five or six years ago, and this is the reason why the call-center business is not growing," he said.
When the Hilton group pulled out of Estonia, they cited "low language skills of the staff" as one of the deciding factors. With the lure of low wages rendered irrelevant, it would seem that Tallinn has lost its trump card, bringing scrutiny to the standard of service provided by call center staff.
Kurv suggests that call center jobs are often seen as stop-gap employment rather than career prospects, despite good wages and flexible hours.
"The call center staff agents are usually people who are studying at university; in their free time they're working in call centers to earn some extra money. Most of our agents are very young and because they are studying, after they graduate they'll leave the company and find some other job," he said.
While this might suggest reasons for a low standard of service, it certainly does not account for all cases.
"The pay is good, so it's a good job; if you know languages, it is easy work. Recently there is less work available, so we want to keep our jobs. I think people are not changing jobs the same, like before," a call center operative, who wished to remain anonymous, told The Baltic Times.
"As work becomes less available and more competitive, I think levels of service will naturally get better," the operative said.
