When VodafoneThree announced in early January that it would bring more than 400 customer contact roles back to the UK from India, the move was framed as a commitment to better customer service.
Investment Minister Lord Stockwood called it a “major boost” for regional economies, while company leadership talked about having “care teams where our customers are.”
However, when you strip away the press release language, a more complicated question emerges: does geography actually matter when it comes to customer service quality? And if so, when?
The answer is far more nuanced than the traditional ‘onshore good, offshore bad’ narrative suggests.
Local contact centers can deliver measurable improvements in customer satisfaction and resolution rates. But they only make financial sense when matched with the right types of interactions and customer segments.
Get that balance wrong, and companies risk paying premium labor costs for minimal CX gains.
Indeed, in a recent discussion with CX Today, Adrian Swinscoe, a Customer Experience Consultant, Author, and the Founder of Punk CX, claimed that “the onshore versus offshore debate often gets very black and white.”
“But what’s missing is that we’re dealing with a toolbox. Some people go, ‘I want a tool, and I’m just going to try and apply it everywhere.’”
“But then you’ve got some people that are more master craftsmen who go, ‘It’s a toolbox. I’ve got offshore, I’ve got nearshore, I’ve got onshore, I’ve got digital, I’ve got automation,’ and they’re going to, in a very considered and deliberate way, plan out what they want and how they want it.”
The Data Behind the Decision
The business case for local contact centers has measurable support.
Offshore call centers experience staff turnover as high as 75% annually, according to Call Criteria’s 2024 industry analysis, compared to approximately 12% in UK operations.
With recruitment and training costs ranging from $10,000 to $15,000 per agent, that difference compounds quickly.
Customer switching behavior tells an even starker story. According to Zendesk, more than half of consumers will switch to a competitor after only one bad experience, while 73% will switch after multiple bad experiences.
While that applies broadly to service quality rather than location specifically, it underscores how little margin for error exists when customer interactions are already strained by language barriers, cultural misalignment, or extended resolution times.
There are also practical examples that organizations can point to, with BT and EE’s commitment to handling all consumer calls from the UK and Ireland appearing to have paid dividends. EE now resolves 59% of complaints within 24 hours and maintains a 90% mobile customer satisfaction rate, among the highest in the UK market.
Yet the financial gap remains substantial. According to the 2025 ContactBabel U.S. Contact Center Guide, fully loaded onshore call center costs in the United States average $28-$35 per hour per agent, while offshore locations in Asia and Eastern Europe range from $8-$14 per hour.
That’s a cost delta that demands careful justification.
When Geography Actually Matters
Swinscoe points to a specific example that illustrates where local agents deliver disproportionate value: complex, context-heavy interactions that require lived experience.
“If you think about it, it’s like housing in the UK,” he explains. “The housing in the UK is just different. It might be old, or pre-war, or ex-local authority.
“Understanding some of that contextual stuff with an onshore approach, you can see where that contextual intelligence, that contextual knowledge, can really add value.”
In expounding on this example, he describes a scenario where a customer is purchasing a fitted kitchen for a period property with stone foundations and irregular dimensions.
An offshore agent equipped with product knowledge can handle the transaction. But a UK-based agent who understands the quirks of British housing stock can proactively flag potential installation challenges, recommend appropriate contractors, and manage expectations around delivery timelines.
“That becomes more about a white glove, budget management, concierge type of service, where there’s a contextual element which you can’t really learn,” Swinscoe says.
This principle extends beyond retail. Financial services firms dealing with vulnerable customers, complex complaints, or regulatory inquiries increasingly keep those interactions onshore.
The UK Financial Conduct Authority’s Consumer Duty, which came into force in July 2023, requires firms to deliver good outcomes for all customers, including those in vulnerable circumstances.
That’s significantly easier to manage and audit when agents are local, share cultural context, and operate under the same regulatory framework
The AI Wild Card
Unsurprisingly, the economics of the onshore-offshore debate are being heavily impacted by the advances made in AI.
However, the exact way in which the technology is affecting things may raise an eyebrow or two.
Although Swinscoe does acknowledge that AI could theoretically close the gap between offshore and local agents, he is skeptical about whether the tech is currently able to deliver in practice.
He outlines a future scenario where an offshore agent, equipped with advanced AI tools, augmented reality, and rich knowledge bases, could match the contextual intelligence of a local agent.
“You get on a call with somebody, and they go, ‘Let me send you a link, which is going to be a video link. I want you to walk me around your kitchen, and I’m going to use AR technology and image recognition.’
“That’s mind-blowing. But you look at it and go, ‘Is that economically viable right now?’ Maybe it is, but maybe not.”
The more immediate impact of AI is in deflecting simple, repetitive interactions entirely.
If AI chatbots and self-service tools handle routine inquiries, the remaining queue skews toward complex, emotional, or high-value interactions where local context and empathy matter most.
That’s precisely the scenario where investing in higher-cost local agents makes financial sense.
The Hybrid Reality
Few large organizations operate purely onshore or purely offshore contact centers.
The mature approach is a deliberate hybrid model that routes interactions based on complexity, customer value, and brand sensitivity.
Swinscoe explains that “onshoring is more expensive, and therefore providing that service onshore has to be matched up with accounts or customer value that match that cost.
“It might be that they’re able to do it because they’ve got all their digital architecture and automation in place, and they’ve been able to automate all of those things super efficiently.
“Therefore, having an onshore team that can handle those more complaint-led, escalation-led, complex problems generally might make more sense if they’ve got all this other stuff taken care of.”
The strategy laid out by Swinscoe can be seen across the customer service space, with many major BPO providers now offering multi-geography delivery models, with nearshore options in Latin America or Eastern Europe that split the difference between offshore cost savings and onshore cultural alignment.
Culture Before Geography
While offshore versus onshore is clearly an important aspect of running a successful contact center, it is not the only aspect.
Indeed, when asked whether location matters more than how agents are trained, empowered, and supported, Swinscoe is unequivocal:
“I think regardless of where you are in the world, empowering your agents and giving them the right tools is essential.”
He points to a persistent problem that he has seen in recent times: agents navigating more than 10 systems simultaneously to handle standard customer queries.
“The cognitive load of that becomes a bit of a grind. We’re expecting people to train on it and have mastery of all these different things, while being quick, efficient, and empathetic.
“It doesn’t feel like we’re setting people up for success.”
Research from Forrester’s 2025 US Customer Experience Index supports this view.
Customer experience quality in the US hit an all-time low in 2025, declining for the fourth consecutive year.
The study revealed that 25% of American brands saw statistically significant losses in their CX score for the second year in a row, while only 7% improved.
Amongst the root causes of the decline identified, Forrester pointed to declining employee experience, and disappointing technology implementations – reinforcing Swinscoe’s point around agents not being given the best opportunity to thrive in their roles.
Designing the Right Mix
For CX leaders considering whether to bring contact center operations onshore, Swinscoe recommends starting not with technology or geography, but with customer stories.
“Tell me what are the four or five customer archetypes that you have for your products and services,” he suggests.
“Then tell me a story about the experience that you want your customers to have, maybe not now, but in a year’s time. Try not to talk about technology. Talk about it from their perspective.”
Only after mapping those desired experiences should teams work backwards to determine the right balance of local, nearshore, offshore, digital, and automated touchpoints.
“That’s going to help them facilitate better decision making around what do we do and where and why,” he explains.
“But I also think we have to educate ourselves on what the art of the possible and the probable is around the use of technology and digital infrastructure.
“I do think that what happens is that many firms get caught up in buying technology and then trying to figure out what they can do with it, rather than being experience-led.”
The VodafoneThree announcement, viewed through this lens, raises as many questions as it answers.
The company hasn’t specified which types of customer interactions will be handled by the repatriated roles.
If they’re routing complex technical issues, business accounts, or vulnerable customer segments to Sheffield and Belfast while maintaining offshore operations for routine inquiries, the move makes strategic sense.
If it’s a blanket shift driven more by optics than operational design, the economics are harder to justify.
What’s clear is that the onshore-offshore debate has moved beyond simple cost arbitrage.
In a world where AI handles the simple stuff, and customers expect seamless, empathetic support for everything else, the question becomes whether organizations are sophisticated enough to deploy them where they actually matter.
