G'day caller: Aussie firms offshore jobs to 'little brother' NZ

Tue Sep 17, 2013 4:32pm EDT
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By Jackie Range and Naomi Tajitsu

SYDNEY/WELLINGTON (Reuters) - When Australian customers of Quickflix ring the online video rental and streaming service's support center, the voice at the other end of the line sounds reassuringly familiar.

That's because the person speaking is not in Manila or Bangalore, but Auckland, New Zealand, where call centers have been steadily gaining clients from neighboring Australia.

While it costs more to operate in the South Pacific island nation than the Asian centers that dominate the industry, Australian firms hurt by a slowing economy can still save some 30 percent by moving roles across the Tasman Sea.

"A few years ago Australian companies wouldn't even consider outsourcing work to New Zealand," said John Chetwynd, managing director of Telnet, which operates Quickflix's call center.

"This is a window of opportunity to grow our business based in Australia."

Telnet's work from Australia has doubled this year to roughly 20 percent of its total business, as more firms shift support center operations to New Zealand, attracted by lower costs, a convenient time zone and a shared culture.

The trend highlights one of the risks facing Australia's economy, where firms are increasingly finding that rising wages during a long boom, inflexible labor laws and red tape have blunted their competitive edge on the global stage.

Figures from the Organization of Economic Co-operation and Development show unit labor costs in both Australia and New Zealand rank in the top five among OECD countries, but costs in Australia climbed 7.8 percent between the first quarters of 2009 and 2011, much faster than 4.4 percent growth over the same period in New Zealand.   Continued...

A general view of Queenstown is seen in this September 14, 2011 file photo. REUTERS/Stefan Wermuth/Files