An educated, multilingual work force and relatively low wages, particularly among skilled workers, has enticed several teleservices companies to select Sweden as a site for pan-European call centers.
Approximately 27 percent of the adult work force in Sweden has benefited from post-secondary education, a higher percentage than England, Germany, France, Ireland and the Netherlands. Many of the country’s universities have global reputations.
“If you are looking to build a low-end call center, it may not be as cost effective, but if you are looking to build a call center that requires skilled labor, we are very, very competitive,” said Magnus Moliteus, executive director of the United States Invest in Sweden Agency.
“Particularly because companies are finding that to reach all of Europe they need more than one call center. We can cover Scandinavia, Poland, the Baltic States and Germany. There are relatively large Finnish, Danish, German and Polish populations.”
Convergys Corp., Cincinnati, opened a call center in Linkoping, Sweden, last September; Sykes Enterprises Inc., Tampa, FL, expanded a 70-seat center in Sveg, Sweden, to 324 seats last August; and Hewlett-Packard, Palo Alto, CA, which previously handled the entire European market from Amsterdam, now divides technical support and customer assistance between Amsterdam and a center it opened in February in Vaxjo, Sweden.
In an international adult literacy study conducted by the Organization for Economic Cooperation and Development, Swedish adults scored highest in terms of knowledge and skills required to locate and use information in various formats among all investigated countries.
The Swedish government subsidizes consumer purchases of personal home computers at favorable terms, creating a high level of PC penetration and making Swedes among the most advanced users of the Internet in Europe. By December, half of all households are expected to have a personal computer, with most linked to the Internet.
Because of narrow wage differentials, pay scales for skilled workers in Sweden are very attractive. Systems analysts and IT specialists generally cost about the same as in the United Kingdom, but about 25 percent less than in France, the United States or Germany.
“The total labor cost is 30 percent lower than Germany, and that includes start-up costs, labor and taxes,” said Moliteus.
The wage level for skilled workers has a historic background in the country. Trade unions have traditionally aimed to raise wages of the lowest paid workers, while restraining the wages of the highest paid. Trade unions en-compass about 85 percent of blue-collar workers and 75 percent of white-collar workers in the country, however the amount of strikes and lockouts remains relatively low. Sweden lost 61 workdays per 1,000 employees due to labor disputes compared to 4,889 lost in the United States, 1,303 lost in England, and 521 lost in France, according to the World Economic Forum’s 1998 Global Competitiveness Report.
Meanwhile, telecommunications costs are competitive due to Sweden’s advanced stage of deregulation.
“While many European countries have recently deregulated, Sweden has been deregulated since 1993, so competition is a bit father along,” said Moliteus. The country of 9 million has 15 telecom companies, he noted.
Electricity was deregulated in 1996, helping the country achieve the lowest electricity rates in the European Union.
Financial assistance incentives, including grants, loans and credit guarantees, can be obtained for technology procurement, employee education, new employee training and construction projects. Specific regions, known as grant areas, are designated for grants and subsidies to create jobs, and the types and amount of subsidies may vary depending on location.
Incentives should be negotiated with local authorities, said Moliteus, noting that several call center companies have received strong packages to locate in the country. Sykes received incentives on training, rent and equipment, he said.
Several areas, including Gottenburg – the second largest metropolitan area after Stockholm, have relatively large populations and remain unsaturated from the presence of other call centers, Moliteus said.