Rising personnel costs and a poor perception of customer service are reducing the attractiveness of offshore call centres, according to a new study.

Wage inflation of up to 15% per year in places like India is restricting the amount of money that companies can save by outsourcing, according to research by Compass Consulting.

The report also finds that language difficulties can lower productivity by lengthening call times.

Simon Scarrot, head of business development and marketing at Compass, said: “As companies confront this reality, we are seeing an appetite for repatriation of call centre activities to the home country by many high street brands.”

Chris Gentle, associate partner and author of Deloitte’s global financial services offshoring report, said: “There has been a repatriation of some call centres, but it is a small percentage of the total amount of work going offshore.”

According to Deloitte’s report, published last week, there are 50,000 UK financial services jobs offshore, a figure which is expected to rise to 87,500 by 2012.

Gentle said service standards are a major concern for insurers, meaning the majority of offshored work is non-customer facing.