October 1998

Opportunity Calls in Wales

BY PAUL STILL, WELSH DEVELOPMENT AGENCY

When Dallas-based FIRSTPLUS Financial Group decided to take its uniquely American home equity loan program to Europe, it faced major challenges:

• It had to establish a state-of-the-art call center from scratch to handle inquiries from across the U.K.
• It had to hire skilled, resourceful staff to quickly process loan applications - without the comprehensive credit-checking systems available in the U.S.
• It had to sell U.K. consumers on the idea of secured borrowing, something that is largely foreign to their culture.

Today, just months into its first international foray, FIRSTPLUS Financial Group plc is already planning to double its U.K. loan processing capability by year's end. And it expects to have a call center staff of 500 within five years. Contributing significantly to the company's success is its decision to locate in Wales, says a company spokesperson.

"We looked at a number of different areas, including North East England, Dublin and Wales," said Neil Patrick, marketing director for FIRSTPLUS. "Because we're developing a full-fledged financing company, we needed outsourcing suppliers … and we needed to recruit people who have a variety of skills."

Cardiff, Wales, about two hours west of London, offered both, he said.

"Certain types of call center operations you can run on a totally scripted basis," said Patrick. "But we cannot automate the credit decision process in the U.K. the same way you can in the U.S. because no U.K. credit service offers the depth of credit information that is readily available in North America.

"Our business requires intelligent questioning … and understanding," he said. "We need to draw a lot of information from applicants. We're looking for people who can talk to a potential borrower and best match FIRSTPLUS products to their needs."

Wales is currently home to 34 call centers, employing more than 7,000 people. While the region's centers serve several major financial institutions, they are operated by a broad range of businesses - from Admiral Insurance to British Telecom, Chartered Trust to Kays Catalogue (similar to L.L. Bean here), Laura Ashley to Mitel, Lloyds/TSB Bank to NatWest Bank.

All are drawn to Wales by the U.K.'s most productive work force, reasonable wage rates and the availability of flexible, cooperative, well-trained workers, said Paul Gorin, call center project manager with the Welsh Development Agency, which is the region's economic development organization.

"Wales offers every advantage of areas that have heavy concentrations of call centers - without the disadvantages of those overheated markets," Gorin said. "We offer three major telecommunications carriers, custom training assistance, financial assistance and ongoing support to make sure these businesses do well. In a few months, a new satellite center will enable companies to more efficiently call worldwide, while reducing long-distance charges by 25 to 35 percent.

"And, there is less competition for talented people here," he said. "One executive looking to move his call center operations to Wales recently told me he is tired of spending months training new people - only to lose them to a headhunter randomly dialing into the call center to recruit staff for a competitor. We still have a good pool of qualified people."

To ensure that qualified employees are available, a special training facility has opened at Coleg Glan Hafren in Cardiff, where students undergo a five-week program taught by former call center managers. The program, begun as a pilot effort this year, is expanding and will likely be available across Wales soon. And the training is so good that all the students who completed the program had received job offers before they graduated.

That is another reason why companies currently operating call centers in Europe have recently begun to investigate Wales.

'We're getting a lot of calls from companies that have established operations elsewhere, which are looking to expand their operations," Gorin said. "Once they see what we have to offer, they talk about relocating their operations here."

Meanwhile, companies with long-standing operations continue to expand in Wales. For example, NTL CableTel Wales and West provides cable television and telecommunications services in Wales. Five years ago this division of New York-based NTL (formerly International CableTel) was drawn to Wales because of its history of cable television transmission and because the U.K. permitted cable companies to also provide communications services.

It acquired several small cable operations and dramatically upgraded their service. Today, the company dominates cable service in the U.K.'s Celtic regions, including Northern Ireland and Scotland, and is currently expanding in England. NTL has one of only five national communications networks in the U.K. By the end of the year, NTL will have the first resilient synchronous digital hierarchy (SDH) network - a self-healing system - throughout the British Isles, which include Ireland.

The company focused on customer service as one way to differentiate itself from other providers. The front lines for customer service are NTL's three call centers, currently staffed by nearly 400 employees.

"Our business model is to hire good people and deliver extraordinary customer service," said Terry Ryan, managing director of NTL CableTel in Cardiff, Wales. "I've been able to attract very bright, energetic, trainable and flexible people. They have open minds. They want to please. They're as good as anyone I've ever worked with anywhere, including the U.S."

They're so good, in fact, that NTL sometimes promotes call center employees to other positions within the organization.

"Being a new industry that combines cable television with telephone and Internet service, we're still writing the book of rules to run the business," said Ryan. "Our staff is helping us accomplish that by providing the highest-quality service and giving our customers the best support. The vast majority of our customers' problems are fixed within 10 working hours."

That explains why NTL's customer retention rate is about 90 percent - one of the highest in the U.K. and one of the best within its own industry, which averages a customer churn rate of up to 35 percent. It also explains why the company - and dozens of others - see Wales as a key to continued growth in Europe.

Paul Still, currently a North American vice president of the Welsh Development Agency, has helped companies set up overseas call centers, including NTL CableTel. Based in Boston, Still has worked with many U.S. companies seeking to establish operations in Europe. The Welsh Development Agency has a team dedicated to call center operations, to help companies with financial assistance, real estate advice, regulatory counsel and ongoing support.