My company, TransUnion, is a global credit information services provider which operates in dozens of countries around the world.
TransUnion provides both regulatory-defined and fee-oriented services to consumers in those markets. We are a company of over 10,000 associates providing services in over 40 countries.
To support the billion-plus consumers in those markets, TransUnion leverages a globally-based enterprise team of nearly 1,500 people composed of associates and multiple strategic partners.
Improving the Consumer Experience
In 2020, TransUnion commenced an effort to modernize and enhance its engagement and experience with consumers globally.
The belief was that achieving the goal of better consumer experiences would further improve the level of trust consumers have with the credit reporting industry as well as increase the brand value of the company overall.
Across many industries, consumer experience has moved to the forefront of how companies differentiate their services.
TransUnion is not alone in this pursuit as nearly half of organizations globally view customer experience (CX) as a key competitive differentiator (Statista Research Department).
Our intuition was backed by data from our consumers that indicated their experience with our outsourced operators was impacted by difficulties in consistently communicating complex financial topics.
When we looked at our contact center strategy for engaging consumers, we had both a wide number of vendors globally and were outsourcing to business process outsourcers (BPOs) over 90% of our contacts.
The vulnerabilities of this strategy were both continuity and quality. Continuity risk was quickly revealed in the first months of the COVID-19 pandemic when most of our third-party locations paused providing services with nearly no notice.
In addition to those global challenges, we experienced inconsistency with quality, adherence, and retention across our providers: which made it difficult to provide the premium experience we wanted for our consumer base.
Consumer contact service insourcing is just the continuation of many other core service types starting with areas like legal counsel (Harvard Law) three decades ago. IT insourcing more recently has been and continues to a more insource centric focus (PAConsulting).
As we looked to insource our non-strategic third-party arrangements, we evaluated different models on how to approach.
One model was to engage the third-party/vendor and request for rebadging of their employee base working on our account and move them to being TransUnion employees with associated management resources.
The belief was that with insourcing we would retain process knowledge and continuity of service, while limiting risk to just the environment change (from third-party to internal laptops, headsets, etc.).
For two of our process transitions from vendor to in-house we had geographic alignment, which would allow us to try this approach.
However, for two other third parties, their locations did not align with our geographic strategy, hence we would be forced to hire new teams. The full replacement transitions were believed to be of high risk because of the complete change out of the team.
While in both types of cases the net associate costs were less as the vendor margin and redundant overhead costs were removed, the primary driver for this movement was to improve consumer experience.
The focus of this discussion contrasts two methods of insourcing: rebadging the vendor associates and switching out/replacement of vendor resources with an entirely new team.
While the sizes of transition and geographies were modestly different, the similarities and complexity of processes being moved were consistent. The analysis will not delve into additional related topic areas as to needed scale to facilitate insourcing of a function, process maturity prerequisites, or the relative cost feasibility or arbitrage of insourcing based on source and destination geography.
The two rebadged movements (named Rebadge A and Rebadge B in Charts 1 and 2) consisted of 40 (Rebadge A) and 134 (Rebadge B) associates.
The charts illustrate the number of associates who stayed and left by category. The replacement insourcing movements (named Switch Out A and Switch Out B in Charts 3 and 4) were for agent pool sizes of 42 (Switch Out A) and 122 (Switch Out B).
The four transitions were each completed during a period of approximately six months, with all four completed over a calendar period of approximately 15 months during 2021 and early 2022.
Many of the same team members were involved in the transitions with multiple movements occurring in parallel. Those dynamics eliminated concerns around the skills/talents of supporting teams as an area of potential variation of outcome.
By setting up a separate program management team for the transitions, we were able to both successfully negotiate with the two partners for the transfer of their employees as well as prepare for the arrival of the different teams (rebadge and new hire) for the places they would be arriving.
We successfully moved the processes without any major loss of fidelity or quality. In the case of the rebadging, in nearly every case, the associate received a larger compensation package due to the pay grade differences between the BPOs and our company.
As the first months progressed post-transition, we saw a divergence in attrition emerge between the four groups which had migrated.
In the case of Rebadge A, we lost 12 of our 40 associates for a variety of reasons (Chart 1) or 30%. For Rebadge B, we lost 40 of 134 associates (Chart 2), or 29% remarkably consistent given these groups were rebadged on different continents.
For the transitions where we replaced the teams with new hires (in a couple of instances existing employees applied for the roles in question, but not a meaningful number) we lost 5 of 42 with Switch Out A or 12% (Chart 3), and 19 of 122 or 15% (Chart 4) for Switch Out B. Statistically they are also very similar in the amount of change.
When digging into the causes of movement, we saw a substantial number of rebadged associates either self-selecting out or being exited (6 of 40 – 15% for Rebadge A and 27 of 134 – 20% for Rebadge B). This compared with a much lower rate of self-select/exit for the replacement transitioned teams (5 of 42 – 12% for Switch Out A and 12 of 122 – 10% for Switch Out B).
The difference accounted for the majority of the delta between the rates of associate attrition between the sets of migrations. In both approaches, self-selecting out and forced exit losses accounted for over half of the total losses. Internal transfer (associates taking other jobs within the company) was the other driver of talent loss from the team.
In the rebadging transitions, we saw 7% of the combined teams take new roles in the company versus 4% for the replaced teams.
We believe this difference was due to the rebadged associates already having some network in the company and a greater awareness of potential opportunities. A 3% difference is not overly meaningful statistically given the population size.
More generally, we believe that the culture shift in moving from a BPO to a corporate environment was a large part of the delta in the amount of team members lost.
The incentive structure around building a career within a corporation versus the heads-down task oriented job of a BPO was not a change which was comfortable for every individual in the transition.
While the core salary for nearly every individual increased as the associates moved between the BPOs and the Enterprise team, the incentive structure for going above and beyond was (and continues to be) different: often less immediate in nature.
This was further seen in the lowered adherence levels from pre to post transition for the rebadged teams. The level of trust and maturity needed within the corporate environment is higher, which can often trip up less disciplined individuals. That increased level of self-management for an associate is critical.
Our conclusion...was that replacement hiring was a superior strategy compared to rebadging associates when migrating from a vendor.
Overall, both the rebadged teams and the new hire insourced teams were able to achieve the performance metrics and now lead our remaining vendors in nearly every significant contact metric (Speed of Answer, Abandonment, Handle Time, Transfer Rate, Quality Score, etc.).
This improvement has since translated to the start of a lift in our experience measures (ex. CSAT, FCR, etc.). Given the seasonality of our contact traffic, we will be measuring a full year cycle before declaring the size of the positive shift. The combined improved experience and reduced cost to serve has translated to a double win for the business.
Our conclusion after quantitatively and qualitatively analyzing the data from the insourcing was that replacement hiring was a superior strategy compared to rebadging associates when migrating from a vendor.
Rebadged teams suffered from higher rates of associate loss in the six months post-transition than replacement staffing. At 30%, nearly a third of the human investment vanishes before you have developed the operating cadence in your newly insourced process.
The difference in culture between a corporation and a BPO was significant. The shift in motivations, success factors, and career drivers was enough to lead many “performers” in the BPOs to drop off and either leave or be released. This was in spite of having an increased compensation structure for rebadged associates.
Set cultural expectations up front. Your corporate culture is different than the BPO associate experience...
The hypothesis of interruption in the process of moving to an entirely new team was not valid and likely mitigated with robust documentation and a well-planned migration project. As a result, when looking to our next set of transitions we will not likely be pursuing a rebadge approach.
As part of the insourcing transformations, the following standard set of best practices were critical to our success of the transition and should minimize the risk of operational impact for others looking to transition from third-party to insourced associate-based centers.
1. Dedicate a separate program team. Your operations management team has a daily job to do to ensure excellence in process execution and management of contact.
Transition from a vendor to an associate-based team has many facets including legal, financial, facilities, etc. which are usually beyond the scope of the day job you need your team to perform. A separate team needs to manage these other aspects so that the “extra” work put on your contact team is minimized.
2. Detail process documentation. Detailed process requirements are crucial for maintaining a process, let alone transferring it.
Often institutional knowledge grows outside of process documents: which is its own risk for continuity when facing large waves of attrition, whether with a third-party or in-house.
Maintaining accurate process documentation requires continual attention and focus and is not a one off activity. The better your documentation, the easier it is to train new team members on that process.
3. Migrate processes in waves and budget for resource overlap to mitigate continuity risk. By hiring in discrete waves, you manage multiple risks in your strategy. Service level and continuity impacts can be managed as discovered process gaps are corrected between waves. Additionally, the peak stress placed on finite supporting teams like recruiting and IT can be reduced through multiple hiring/training/equipment cycles.
A four-to-six week overlap in cost budgeting will give you the operational space to solve issues before they impact your service. The high risk of loss of process continuity/service level usually justifies the one time additional cost in your business case.
4. Set culture expectations up front. Your corporate culture is different than the BPO associate experience, so ensure your employee base (rebadged or net new) understands the related values and beliefs important to your organization.
Not everyone that works well in one culture works well in another. Selecting a higher performing resource for that reason can be valid. We did not do this explicitly enough early in the project with the teams which were to be rebadged.
5. In-house management team needs to change as well. The team responsible for the insourced process/service will need to change its approach when working with an associate team versus a third-party team.
The top-down vendor management responsibility needs to be replaced with associate engagement and career development frameworks with supporting structures.
The “us and them” pronoun usage needs to be replaced with “we” as everyone top to bottom needs to believe and act as a singular team. These transitions are complicated and require significant focus as they often impact organizational structures.
Further Study Needed
We plan to expand our study of the insourced groups as the teams and processes mature over the next couple of years.
We would like to evaluate if the different approaches impacted overall process performance or quality in the long term.
While the immediate additional losses create additional work for other recruiting and other support teams, are there other long terms benefits or impacts which were not obvious in the first six months of operation post-transition?
Do we see any difference in career growth over two years with rebadged associates versus new hires into the same processes? Are there additional experience points we can use to improve future transitions?