Call centres in the UK will recruit an extra 200,000 workers over the next three years, taking the number of people employed in the sector to more than one million, a government report has predicted.
A study by the Department of Trade and Industry (DTI) said that the sector has grown by 250 per cent since 1995 and would employ four times as many call centre workers as India by 2007.
The research, which follows widespread concern from unions about the 'offshoring' of call centre jobs, comes just days after market analysts Datamonitor predicted that UK call centre jobs would rise by more than 100,000 over the next four years with the public sector leading the expansion.
The number of call centres is expected to rise from 5,980 to 7,320 over the same period, Datamonitor said.
Secretary of State for Trade and Industry Patricia Hewitt said: "This report shows that we have a vibrant call centre industry in the UK, with some of the best customer service professionals in the world - and in fact it predicts a growth in call centre jobs.
"But we do need to position ourselves according to our strengths. Others are unbeatable on cost, but we are unbeatable on quality."
But David Fleming, national officer of the union Amicus, which has been leading opposition to 'offshoring', said the report missed the point. "Offshoring is not just about call centres, the vast bulk of the 15,000 jobs offshored last year were things like accounting, human resources and IT," he said.
"It does not show how offshoring will result in reinvestment in areas like Newcastle and it doesn't explain why companies that are making massive profits have to chase short term cost cutting at the expense of long term global stability."
Reflecting these concerns, the report called on firms to consult unions and customers before moving call centre work abroad and advised them not to compete solely on the basis of low costs.
The quality of service in UK call centres was high, it claimed, but perceptions of the industry could be better. Workers' skills need to improve, particularly in communication and customer service, and call-centres need to develop existing training and qualifications from pre-job training level up to senior management.
Despite the fact that lower wages in India and elsewhere meant that firms could save up to 40 per cent in operating costs by sending work overseas, the DTi stressed that there were significant hidden costs associated with sending work offshore. These included relocating senior management and losing business due to customers' discontent.
Indeed the report found that a "significant minority" of UK consumers had already moved or planned to move their custom away from firms that had switched work overseas and that the overall perception of offshoring was a negative one.
"Others are unbeatable on cost, but we are unbeatable on quality," Patricia Hewitt said.
"The best British call-centres are the best in the world, offering high value businesses, high skill professionals, but we need to bring the quality of the rest up to that of the best."