Who you gonna call?: The take-off of business process outsourcing in Turkey

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As the private sector increasingly focuses on customer service as a way to retain business, Turkey’s call centre and business process outsourcing (BPO) sector has gained considerable traction in recent years. Already home to thousands of BPO centres covering operations for telecoms operators, airlines and financial institutions, the industry will continue expanding in 2015, fed by a young and educated workforce, strategic geographic positioning and government incentives aiming to increase growth in underdeveloped regions.

RECENT GROWTH: Since opening its first call centres in the 1990s, Turkey’s BPO sector has seen enormous growth. The Investment Support and Promotion Agency of Turkey reports that the industry hit an annual growth rate of 20% in 2010, with 1000 companies, 40,000 employees and a worth of TL1.2bn (€422.5m). According to a 2014 report by the Turkish Call Centres Association (ÇMD), the industry was worth $1.6bn (€1.2bn) and employed 80,000 people, up from 2013 figures of $1.4bn (€1.1bn) and 70,200 employees at some 1100 centres. “A lot of companies are outsourcing their business, and it is not limited to call centres,” Barı managing partner at Globalturk Capital, told OBG. “BPO activities in Turkey also include telesales and customer upselling, and banks are increasingly outsourcing some services to specialised BPO centres.”

The chief focus of these centres is customer service and technical support, especially in telecoms, retail, finance, health care, IT and transport. Major companies with BPO units in Turkey include Turkcell, Türk Telekom, Vodafone, Lufthansa, ING Bank and DHL, and recent developments indicate sustained medium-term demand: in May 2013, London-based data centre firm TelecityGroup bought Turkish BPO operator SadeceHosting for an undisclosed sum, while Vodafone announced plans in November 2013 to invest TL40m (€14.1m) in a new call centre in Anatolia, adding to the TL20m (€7m) facility it opened in Elazı ğ in 2011.

SKILL SETS: These centres are also a source of employment for thousands of young, educated Turks. The ÇMD estimates that half of call-centre employees are high school graduates and half are post-secondary graduates. Most of them are 24-26 years old, and many are struggling to enter an increasingly tight workforce while developing professional skillsets. Women in particular have flocked to these positions as they seek to build careers or boost household income: the ÇMD estimates that 65% of them are female. “Call centres provide great entry-level employment opportunities for youngsters,” said Öney. “It’s like going into the military: you learn the basic skills for professional life that you can adapt to any workplace. You’re trying to sell something or solve someone’s problem over the phone, which is quite difficult, thus you are able to build skills enormously. Call centres are great developers of human capital.”

REGIONS: They are also critical economic drivers for the less-developed regions of Turkey’s south and east. Though most of the country’s call centres are in Istanbul (58.6%), followed by Ankara (9.5%) and Izmir (3.6%), the remaining 28.3% are scattered across the country in cities like Antalya, Diyarbakır, Erzurum, Erzincan, Gümü şhane, Malatya, Sivas, Uşak, Kayseri, Bursa, Düzce, Afyon, Eski şehir and Yalova. ÇMD aims to see at least one call centre open in each province over the next several years, according to its president, Metin Tarakçı.

State incentives like tax breaks and land grants make Anatolia an especially attractive option. Teleperformance Turkey, a firm with call centres in Istanbul and U şak, recorded cumulative growth of 120% in the 2009-14 period, according to its general manager, Engin Utkan. In January 2013, Globalturk Capital partnered with Japanese conglomerate Mitsui to invest in Tempo, a locally owned BPO firm with 1500 employees in Istanbul, Urfa and Afyon, and plans to expand further. Öney said he expects continuous demand in the sector over the long term. As Tarakçı told OBG, “Companies are looking into their internal cost structures, and while BPO is not a cheap solution, if you can outsource some of your non-core services to someone else’s core services, it will help grow your business in the long term.”

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The Report: Turkey 2015

Telecoms & IT chapter from The Report: Turkey 2015

The Report: Turkey 2015

The Report

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